Mozambique remained the only African central bank this year to reduce borrowing costs at each of its rate-setting meetings and signaled more easing to come, Bloomberg News reported. The Banco de Moçambique on Monday lowered its benchmark rate, known by its Portuguese acronym Mimo, to 13.5% from 14.25%, Governor Rogerio Zandamela said, matching the scale of its four prior cuts in 2024. “The assessment of risks and uncertainties associated with inflation projections remains favorable,” Zandamela said.
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Mozambique
Former Mozambican Finance Minister Manuel Chang was convicted Thursday in a financial conspiracy case that welled up from from his country's “ tuna bond ” scandal and swept into a U.S. court, the Associated Press reported. A federal jury in New York delivered the verdict. Chang was accused of accepting payoffs to put his African nation secretly on the hook for big loans to government-controlled companies for tuna fishing ships and other maritime projects.
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Mozambique won a fraud case over a $2 billion bond scandal that embroiled Credit Suisse and created a financial crisis for the southern African nation, Bloomberg News reported. After a three month trial, a London judge ruled that Mozambique was defrauded in a controversial maritime project meant to finance the construction of a new coastal patrol and a tuna fishing fleet. The government-backed fundraising was plagued by corrupt deals, with hundreds of millions of dollars looted, while much of the debt was kept hidden from bondholders and other lenders.
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Credit Suisse Group AG has agreed to pay nearly $475 million to American and British authorities to resolve charges in connection with Mozambican bond offerings, the U.S. Securities and Exchange Commission said on Tuesday, Reuters reported. The charges centered on the Zurich-based bank's role in a $2 billion scandal involving government-guaranteed loans. The SEC said Credit Suisse fraudulently misled investors and violated U.S. bribery laws in a scheme involving two bond offerings and a syndicated loan that raised funds on behalf of state-owned entities in Mozambique.
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Sasol Ltd. agreed to sell a 30% stake in a natural gas pipeline running from Mozambique to South Africa for as much as 5.1 billion rand ($361 million) in order to pay down debt, Bloomberg News reported. The deal rounds out an accelerated asset-sale program that has helped Sasol reduce borrowings that ballooned amid cost overruns at a giant U.S. chemicals project and call off a proposed $2 billion share sale. The company started hunting for a buyer for its pipeline shares last year as it examined ways to bolster its finances amid mounting pressure from creditors.
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A U.S. judge on Wednesday quashed a bid to widen the scope of a civil lawsuit by the U.S. Securities and Exchange Commission that accused miner Rio Tinto of fraud at its Mozambican coal business, a court filing showed, Reuters reported. The SEC filed a complaint against Rio in 2017 with allegations that it had fraudulently concealed the decline in value of the business. Rio had acquired Riversdale mining for $3.7 billion in 2011, on the premise it would be able to barge 30 million tonnes of coal per year down the Zambezi river, and rail a further 12-15 million tonnes of coal per year to port.
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Fitch Ratings has affirmed Mozambique's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'CCC'. The 'CCC' rating reflects limited financing options combined with high fiscal and external financing needs that have been exacerbated by the coronavirus shock, high general government (GG) debt and ongoing unresolved public-sector debt liabilities, Fitch Ratings reported. Fitch expects real GDP to contract by 1% in 2020, after muted GDP growth in 2019 of 2.2% due to the damage caused by two cyclones.
Mozambique's Attorney General's Office said on Wednesday it will seek the extradition of three former Credit Suisse bankers implicated in a $2 billion debt scandal that sent the country's economy into crisis, Reuters reported. Andrew Pearse, Detelina Subeva and Surjan Singh, who helped arrange the loans to Mozambique, all pleaded guilty in the United States last year to charges including conspiracy to violate U.S. anti-bribery laws and to commit money laundering and securities fraud in relation to their role in the affair.
Switzerland has opened a probe related to $2 billion of loans to Mozambique that were organized by banks including Credit Suisse Group AG and VTB Bank PJSC, in a scandal that has already attracted the attention of prosecutors in the U.S, Bloomberg News reported. The criminal probe started in February against “persons unknown” on suspicion of money laundering in connection with the credit, the Office of the Attorney General said on Friday. The target of the proceedings is not any specific person or entity, the office said.
Mozambique on Monday withdrew appeals against a South African court decision not to extradite its former finance minister, Manuel Chang, wanted in relation to a $2 billion debt scandal that plunged his country’s economy into crisis, Reuters reported. Chang, who denies wrongdoing, was arrested in South Africa in December at the request of the United States while Mozambique also requested his extradition, sparking a legal battle over where he should be sent.