Killing the goose that laid the golden eggs (Part 11)
Concluding thoughts

It is admitted that more than $400 mn disappeared from the banking system in the 1990s: $100 mn cash injections to BCM during 1992-96, $162 mn BCM bad debt provisions, 2000 & 2001, and $150 mn needed for Banco Austral recapitalisation. The losses are probably much larger.

Corruption in the banking system has been pervasive and high level. One banker that we interviewed told us that a notoriously corrupt banker had told him "If I sink, a lot of people sink with me. I keep all my notes in a safe and I can prove that the highest level people took money. This protects me."

But information can also be dangerous. The assassinations of José Alberto de Lima Félix in 1997, Carlos Cardoso in 2000, and António Siba-Siba Macuácua in 2001 all seem to have occurred because they knew too much about fraud and corruption in the Mozambican banking system.

As we noted earlier in this series, all banking systems support preferred entrepreneurs. It is not surprising that banks were used to support a new national bourgeoisie, and the line between this and "corruption" may not be well defined. What is clear, however, is that whoever ordered the killings of Cardoso and Siba-Siba knew that their own actions, if exposed, would be seen within Mozambique as corrupt. This is not a case of foreigners defining what constitutes "corruption", but rather of Mozambicans themselves knowing that their activities would be considered so unacceptable by their colleagues and compatriots that they had to kill to prevent the knowledge becoming public.

This is not simply loans that will not be repaid, but outright theft, money laundering, and illegal foreign exchange dealings. Many people had their hands in the honey pot. Others decided not to look too closely, and are guilty of not carrying out their jobs in the banks.

With the privatisation of the state banks in 1996 and 1997, misappropriation of funds seems to have reached an unsustainable level. Faced with the insistence of the international financial institutions that the two state banks be privatised at a time when there were no takers, a part of the Mozambican elite opted for a tacit deal - the only possible privatisations are going to be corrupt, so let us ensure that we obtain our share. For both banks, in the two years after privatisation money poured out to both foreign and domestic partners.

The banks were both privatised to groups that involved important families linked to high party and state officials. But by 2001 they had lost control of both banks. Was their greed excessive; did they kill the goose that laid the golden eggs? Or did they realise that the window of opportunity was short and they had to grab as much as they could as quickly as they could?

Now, however, their only concern is to cover their tracks, and to hide what they have done. And some people are prepared to kill to ensure that the secrets are kept.
(Joseph Hanlon)

Abbreviations

ABSA, Amalgamated Banks of South Africa
BCI, Banco Comercial e de Investimentos, Commercial and Investment Bank
BCM, Banco Comercial de Moçambique, Commercial Bank of Mozambique
BCP, Banco Comercial Português, Portuguese Commercial Bank
BdM, Banco de Moçambique, Bank of Mozambique
bn, billion, 1 000 000 000
BIM, Banco Internacional de Moçambique, International Bank of Mozambique
BPD, Banco Popular de Desenvolvimento, People's Development Bank
BPI, Banco Português de Investimento, Portuguese Investment Bank
BSTM, Banco Standard Totta de Moçambique
CAS, World Bank Country Assistance Strategy
CCADR, Caixa de Crédito Agrario e de Desenvolvimento Rural, Agricultural Credit and Rural Development Fund
CEO, chief executive officer
CSM, Companhia Siderúrgica de Moçambique, Mozambique Iron & Steel Company
EMOSE, Empresa Moçambicana de Seguros, Mozambique Insurance Company
EMM, Empresa Metalúrgica de Moçambique, Mozambique Metalworking Company
FDC, Fundação para o Desenvolvimento da Comunidade, Community Development Fund
IMF, International Monetary Fund
Impar, Companhia de Seguros de Moçambique, Mozambique Insurance Company
INSS, Instituto Nacional de Segurança Social, National Social Security Institute
mn, million, 1 000 000
PCA, Presidente do Conselho de Administração, Chairman of the Board
PRE, Programa da Reabilitação Económica, Economic Rehabilitation Programme
SBB, Southern Bank Berhad
Trefil, Companhia Moçambicana de Trefilarias, Mozambican Wire-drawing Company
UCB, União Comercial de Bancos, Commercial Banks Union

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metical - archives 2001