Killing the goose that laid the golden eggs (Part 3)
Commercial and central banking sectors of Banco de Moçambique (BdM) began to be separated in 1987. Adriano Afonso Maleiane became Vice-governor of BdM in 1990. In 1991, Eneas Comiche was promoted to be Finance Minister and Maleiane replaced him as Governor of BdM. Within two months of his appointment, Maleiane issued regulations and named directors for the commercial banking sector of BdM. On 25 February 1992 this was formally split into a new bank, Banco Comercial de Moçambique (BCM, Commercial Bank of Mozambique).
Maleiane and senior BdM officials refused to talk to us. But in interviews, senior banking officials all made clear that Maleiane's priority was transforming BdM into an effective and honest central bank. BCM was given what was left. Some BCM staff were good and honest, but Maleiane knew about corruption in BdM and he moved the corrupt, incompetent and lazy staff over to BCM.
The initial key figures in BCM were Augusto Cândida (PCA, Presidente do Conselho de Administração, Chairman of the Board), Alberto Calú and Eneas Comiche's brother Teotónio Comiche.
A 1991 World bank study suggested that BCM and BPD were such a mess that they should simply be closed. This was never a serious option, but Magid Osman as Minister of Finance wanted them privatised - he felt they were simply too corrupted to continue as state banks and could not be controlled. Others opposed privatisation and wanted them cleaned up. Finance Minister Comiche and BdM Governor Maleiane took political instructions on this matter, and initially aimed at improving the efficiency of the banking sector and the regulatory capacity of BdM. Only in March 1995 did Maleiane announce that BCM and BPD would be privatised.
Privatisation of BCM was one of seven "necessary conditions" of the World Bank's 7 November 1995 Country Assistance Strategy, meaning that if BCM was not privatised, the World Bank would end its programme, which would cut off all aid to Mozambique. (Ending cashew industry protection was a much more controversial "necessary condition" of that same notorious CAS.) The 11 April 1996 joint IMF-World Bank Policy Framework Paper, which set conditions that the government must meet, required privatisation of both banks in 1996.
The World Bank was convinced that international banks would be interested in BCM and BPD. In both cases, there was initial interest, but prospective buyers dropped out as soon as they had a look at the books. There were too many bad loans and chaotic accounting systems.
Relations between BdM and the World Bank were poor on the privatisation issue. Tension between Fermino Santos, the BdM person coordinating the privatisation process, and Simon Bell, the World Bank's economist in Maputo, grew. Eventually, BCM staff were told they could not talk to Bell directly, and that he would have to deal with them via BdM.
But the IMF and World Bank kept up the pressure. BCM was finally privatised in mid 1996, but no foreign bank wanted BPD. In early 1997; the IMF said that aid to Mozambique would be cut off if BPD was not privatised by the end of June.
As we will show in the next two parts, both privatisations were extremely dubious. But Mozambique had no choice. The IMF and World Bank demanded privatisation even if
it was corrupt; parts of the Mozambican elite joined with foreign partners to take advantage of that pressure.
metical - archives 2001