Mozambique “tuna-bond” Scandal and Lessons for Africa in the Fight against Corruption

(FILES) In this file photo taken on January 08, 2019 Manuel Chang, former finance minister of Mozambique, appears at the Kempton Park Magistrates court to fight extradition to the United states in Kempton Park, South Africa. – When former Mozambican finance minister Manuel Chang was arrested at Johannesburg airport over the Christmas holidays, it triggered a political crisis ahead of the country’s elections later this year. Chang was detained over alleged secret loans to state companies totaling $2 billion in a widening scandal that is set to shake the Frelimo party that has ruled since 1975. (Photo by Wikus DE WET / AFP)

February 11, 2019//-Five individuals have finally been arrested in connection with Mozambique’s long-running “tuna bond” scandal, but the authority making the indictment was the US rather than Mozambique itself.

Report by Dianna Games

Truth is stranger than fiction, people often say. Mozambique’s long running $2bn “tuna bond” scandal reads like a thriller, but more juicy details could be forthcoming after the recent international arrests of several people related to the saga.

Among them was Manuel Chang, (pictured above), Mozambique’s finance minister between 2005 and 2015 under former president Armando Guebuza. Chang was arrested in Johannesburg in transit to Dubai in December 2018 and now faces charges of conspiracy to commit money laundering as well as wire and securities fraud.

The authority that had him arrested was the US justice department, which drew up the indictment – not Mozambican crime fighters. The indictment claims that Chang and his alleged co-conspirators arranged more than $2bn in fraudulent loans from international investment banks for “front” projects including the development of a tuna fishing boat fleet. Around $500m remains unaccounted for, and the indictment alleges that $200m was spent in bribes and kickbacks.

The government of Mozambique only disclosed the debt in 2016, triggering a crisis. External funding, on which Mozambique still relies for about a quarter of its budget, dried up as international organisations stepped away in the wake of the scandal.

Given the severe implications of this saga, it would be expected that the state itself would have tried to bring to book those responsible, but it was only once the US authorities stepped in that action was taken.

The conspiracy of silence is nothing new, even when the alleged incident potentially threatens the interest of the state itself. No high-profile arrests have been made in relation to allegations of “state capture” in South Africa surrounding Jacob Zuma and the Gupta business family.

Over time, enthusiasm for justice wanes and few, if any, big fish are caught. Judicial authorities become undermined and compromised. But it is not just African governments that are to blame. By seemingly accepting graft as a necessary evil, citizens must also take responsibility for poor development outcomes.

But the international net is closing, particularly regarding the flow of US dollars – the favoured currency for illicit deals. Crime has increasingly become transnational, both into and out of Africa. The move of the US authorities in the tuna bond case shows that wrongdoing is noticed abroad.

Western governments are more exercised now about money laundering through or into their jurisdictions and have become responsive to those African governments seeking justice for crimes committed by those who have found safe havens abroad. International banks are making it much harder to open accounts across the world and more vigorous about checking sources of wealth of potential customers.

But Africa should not rely on the international system only to address the problem. Notwithstanding efforts to fight this scourge in other parts of the world, until such behaviour becomes unacceptable to the electorates in Africa, it will continue.

This article was originally published on africanbusinessmagazine.com.

Photo Gallery

Log in | Designed by Village Pixels