In view of the flood disaster in Mozambique, several Swiss NGOs have issued an open letter calling on Credit Suisse to waive repayment of a billion-euro loan to this crisis-ridden country. The loan is a hidden debt of two billion US dollars, which is the result of fraudulent illegal agreements between Credit Suisse, the Russian bank VTB, international contractors and Mozambican government representatives. The illegally obtained loans plunged Mozambique in 2016 into a financial crisis that continues to this day and is now making the country's reconstruction considerably more difficult.
A financial scandal has been causing a stir in Mozambique for almost three years: At the beginning of 2016 it came to light that the government of Armando Guebuza had granted three semi-public companies permission to take out loans amounting to two billion US dollars between 2013 and 2014. The parliament, which should have approved the loans, was bypassed. The Swiss bank Credit Suisse was one of the main lenders. Allegedly the money was to be used, among other things, to purchase tuna cutters, but a large part of the billions trickled away in opaque channels. In December last year, at the instigation of the US Department of Justice, three former CS bankers were arrested, along with the former Mozambique Finance Minister and other parties involved.
Swiss NGOs had already called on Credit Suisse to cancel the debt in 2018, in accordance with corresponding demands from Mozambican civil society. However, there was no reaction from the major bank. In view of the dramatic devastation caused by Hurricane Idai, there is now acute pressure to act to resolve the debt crisis. The humanitarian disaster has reached an unprecedented scale for Southern Africa: Five million people are directly affected, 1.8 million people are in acute need of aid, including one million children. In the flooded areas in the centre of the country, the risk of epidemics is increasing due to the lack of drinking water supplies, and the first cases of cholera have been reported.
Against this backdrop, KEESA, terre des hommes schweiz, Helvetas and Solidar Suisse have issued an open letter (see appendix) calling on Credit Suisse to write off its illegal loan of around one billion US dollars and to repay the 100 million US dollars in fees received in connection with the loan. This would help the severely affected country to cope with the consequences of the natural disaster.
International organizations have already taken a clear stand in this direction. The Secretary-General of the United Nations, António Guterres, called for generosity from the international community at the UN General Assembly in New York last week. Now Mozambique's national debt must be dealt with generously, said Guterres. The UN expert on foreign debt and human rights, Juan Pablo Bohoslavsky, demands in a Statement: "The devastating effects of Cyclone Idai must be taken into account in debt talks. (...) Repayment of the debt should not restrict the necessary financial leeway for reconstruction (...) In short, the secret loans should not and cannot be repaid." The IMF also recently announced stressesthat Mozambique must be granted substantial debt relief.
The signatory organizations expect Credit Suisse to face up to its responsibilities and draw the consequences of illegal lending.
For more detailed information on the situation, we are at your disposal at any time. We can also offer you direct contacts in the crisis area.
Contacts:
KEESA - Barbara Müller, +41 79 601 74 17
Helvetas - Martin Fischler, Regional Coordinator East Africa, +41 79 656 64 83
Terre des hommes switzerland - Gabriela Wichser, Head of Programmes, + 41 78 806 30 03
Solidar Suisse - Joachim Merz, +41 44 444 19 86
