A DECISION this week by Moody’s, a ratings agency, to downgrade Mozambique from a lowly B2 to a dismal B3 has cast a pall over one of the world’s poorest countries. What makes the picture glummer still is that only a few years ago a much-heralded bonanza of offshore gas had made Mozambique one of Africa’s favoured recipients of foreign investment.
No longer. A scandal has mired the country and its government in the reek of incompetence and corruption. Two-and-a-half years ago, Credit Suisse raised $500m on behalf of Empresa Mocambicana de Atum (EMATUM), a newly created state-owned tuna-fishing company. A Russian bank, VTB, raised another $350m. The cash was supposed to pay mainly for a fleet of fishing boats. Instead, it was diverted into an array of other purchases, including security equipment. The company said it hoped to catch 200,000 tonnes of tuna a year, but is catching barely any fish at all. A rescue plan has been proposed, involving the issuing of a new government bond.
Explaining its decision, Moody’s notes Mozambique’s “deteriorating balance of payments position and reduced capacity for the government to service...Continue reading
Source: Middle East and Africa http://ift.tt/1psKBsM
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