Mozambique campaigners launch scathing criticism of UK regulator

Leading civil society organisations in Mozambique have launched a scathing attack on the UK’s Financial Conduct Authority for dropping its criminal investigation into Credit Suisse over secret loans given in 2013.

The organisations, which include the Budget Monitoring Forum (FMO) and Centre for Public Integrity (CIP), regard the loans as unconstitutional and illegal because they were not agreed by the parliament of Mozambique. The loans were given by the London branches of Credit Suisse and VTB and were issued under English law.

Earlier this week it was reported that the Financial Conduct Authority had dropped their investigation into Credit Suisse. The civil society organisations say in their statement released today this is “further evidence that the international community will not hold accountable its own banks which are responsible for the debt”.

They go on to criticise the UK government and wider donor community, saying:

“We now question the sincerity of the UK and other donors and doubt their real commitment to good governance in Mozambique. The decision taken by the UK watchdog is in line with various international organisations and donor agencies that have stopped demanding transparency on the secret debts affair. Our understanding is that there is a clear intention of green washing the debt scandal, as a means of securing benefits for the creditors and condemning the people of Mozambique to perpetuated misery.”

Last week it was announced that a restructuring deal had been agreed for one portion of the loans. Jubilee Debt Campaign’s analysis shows that this will lead to $1.7 billion to $2.2 billion being repaid by the people of Mozambique on an original loan of $760 million, which was of no benefit to those same people.

Small-scale traditional fishing boats in Maputo, capital of Mozambique, with the city rising behind (Cordelia Persen / Flickr)

The civil society organisations say “Clearly the Mozambican leadership was party to the debt, but it was instigated and only made possible by lenders in donor countries” and that these lenders are not being “challenged by international agencies and donors who only blame Mozambicans”.

In a further criticism the statement says the FCA conducted its investigation in secret and did not speak to Mozambique civil society and the Mozambique parliament. The FCA have also refused to speak to Jubilee Debt Campaign about the matter.

The statement concludes by saying that civil society organisations will continue to seek to get the loans declared illegal in Mozambique and warns people in other developing countries about the “predatory lending practices” of private companies.

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