Members of the Frelimo elite have been siphoning off increasing amounts of money for two decades. The dollar signs have flashed in their eyes since the discovery of huge gas reserves. The notorious $2 billion (about R35 billion) secret debt was a way in which elite bank accounts received hundreds of millions of dollars five years ago – and they spent some on property in South Africa. Sons of then president Armando Guebuza have been charged and arrested, but it is not clear if the case will ever go to trial. Former finance minister Manuel Chang is still in a South African jail awaiting extradition.
Although a few strong sectors of the civil service survive, notably the health sector, there has been little economic development in years. All the statistics show growing poverty, inequality and child malnutrition. Cabo Delgado has become a flashpoint, with thousands of families stripped of their livelihoods after being displaced by ruby and graphite mines and the gas project. Young people see a few gaining from the mineral wealth and well-paid outsiders coming in to work on the gas, and most local people not benefitting.
Islamic militants are attracting willing recruits in exactly the same way Frelimo attracted its recruits when it started in the same places fifty years ago, with both promising a fairer sharing of the wealth of the province. Too many young people now view Frelimo in the same way that their grandparents saw the colonial administration, and the new civil war is the result.
Levels of patronage
Opposition to Frelimo was already growing in 2018’s municipal elections. President Filipe Nyusi’s dubious landslide re-election last year was made possible by strengthening the party’s patronage network, created by Guebuza when he was president. This can be seen at three levels. At the top is a group of mini-oligarchs who control land, contracts, the illegal trade in heroin and timber, and shares of international loans.
At the next level, officials earn smaller but still significant rewards that come from servicing the big beasts by facilitating their land concessions and contracts. And these officials can give smaller contracts to their families and friends. Construction quality is notoriously poor, but it has to be gross to be noticed. Nyusi walked out of a school inauguration on 24 July because the school was so badly built.
And at a lower level, all civil service jobs now depend on Frelimo membership. Teachers can impregnate schoolgirls, demand money for exam passes and not show up to teach if they work hard enough on the elections. The police and others assume bribes are part of their salary.
Liberation parties across southern Africa are trying to deal with similar problems. In South Africa and Zimbabwe, entrenched and corrupt liberation leaders were pushed out by their comrades. But corruption is now so embedded that they are having serious problems cleaning up the mess. Inflation of more than 250 per cent has returned to Zimbabwe because President Emmerson Mnangagwa cannot control arbitrage: privileged people are allowed to buy United States dollars at official rates, which they sell on the parallel market to buy more dollars and so on, and that is enough to drive hyperinflation. Mnangagwa built a coalition to overthrow Robert Mugabe, but it contains those able to drive inflation and he cannot control them.
As in the countries neighbouring his, Mozambican liberation general Guebuza was pushed out, albeit more gently, by being prevented from standing again. He was replaced by Nyusi, a son of the liberation, who seems unable to control his Frelimo party, which is dazzled by the coming billion-dollar gas bonanza.
As well as the civil war, Mozambique is still dealing with the severe economic backlash of the secret debt, which led to cuts in infrastructure upkeep and limited government ability to respond to two cyclones in 2019. Growing greed and the impact of the secret debt are increasing discontent in Mozambique.
Fraud on a grand scale
Internationally, the two biggest government-involved bank scandals are Malaysia’s $4.5 billion (R78.5 billion) 1Malaysia Development Berhad scandal and Mozambique’s $2 billion secret debt. The sentencing to jail last month of former Malaysian prime minister Najib Razak for his involvement in the fraud should provoke some deep thinking by Frelimo, Mozambique’s international partners and those who want to choose sides in the new war.
There are important similarities. Like Nyusi, Razak was the son of a liberation leader and himself became defence minister and then prime minister. Razak personally stole huge amounts of money. He was voted out in 2018. Because of the scandal, the government realised it needed high-level trials to demonstrate change. Nyusi is at least tainted by the secret debt, but he was re-elected in a dubious election and his government seems to be avoiding Malaysia-style trials.
The international community is now choosing sides. As well as international banks, eight export credit agencies, including the US and United Kingdom, on 17 July backed a $4.9 billion (R85.5 billion) loan for the gas project. The International Monetary Fund’s representative in Maputo, Ari Anson, said on 29 July that it was ‘very positive’ that such strong support came despite the Cabo Delgado insurgency and the secret debt scandal. Profits from gas contracts are more important; international finance is now firmly backing the Frelimo leadership.
Now there is a growing wave of support for foreign military intervention in the Cabo Delgado war. If the grievances remain unresolved, this will not end the war. The most likely outcome is that, as in Afghanistan and elsewhere, private security companies will be paid to guard the economic installations – gas, rubies and other minerals – and cities like provincial capital Pemba. In rural areas the war will continue, and the more than 250 000 refugees will increase as the government tries to drain the ‘sea’ the guerrillas swim in.
Mozambique’s young people, Frelimo and the international community face a difficult choice. Will they accept a failed state where a ruling party elite and international companies can be walled off from the chaos and continue to profit, at least for a few more years? Will a comfortable Maputo middle class feel it can ignore what happens in faraway Cabo Delgado, and that the urgent priority is to earn enough for private school fees and other essentials? Will the ANC send in troops to back old friends now profiting from a failing state? Or is there a will to stop the headlong rush to a failed state?
South Africa and Zimbabwe show how difficult it is. Malaysia shows it is possible.
* Joseph Hanlon has been writing about Mozambique since 1978 and is the editor of the newsletter ‘Mozambique News Reports and Clippings’. He is a visiting senior fellow in international development at the London School of Economics.
** This article was first published by New Frame