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Mozambique: Manuel Chang’s extradition over ‘hidden debt’ once again halted

By Jeune Afrique
Posted on Friday, 27 August 2021 17:57

Former Mozambican finance minister, Manuel Chang, appears in court in Kempton Park, Johannesburg, South Africa on 16 October 2019. (AP Photo/Phill Magakoe, File)

South Africa's Johannesburg High Court has ordered Justice Minister Ronald Lamola not to extradite Manuel Chang to his home country of Mozambique. It follows from an announcement earlier this week that the former Mozambican finance minister was to be extradited back to Maputo, where he is facing prosecution in a case where 20 politicians are currently on trial for allegedly embezzling $2bn.

This week provided a new judicial twist in the trial of Mozambique’s ‘hidden debt’. Initially, in December 2018, he was arrested in South Africa at the request of the US government. However, in 2019, his extradition was cancelled.

Then this week, on 23 August, at a hearing in Maputo, the South African Department of Justice finally promised to extradite him, but only days later, that was once again reversed after The Mozambique Budget Monitoring Forum (FMO), a group of civil society organisations, reportedly halted the extradition until arguments against it can be heard.

Chang, who served as a minister from 2005 to 2015, denies any responsibility in the case. He and 19 others, including security officials and the son of former president Armando Guebuza (2005-2015), are accused of blackmail and embezzlement of hundreds of millions of dollars in state-guaranteed loans.

The former finance minister is alleged to have signed and finalised around $2bn in loans, mainly from Credit Suisse and the Russian bank VTB, to state-owned companies to finance several maritime projects, including the purchase of ships.

The actions of the defendants have left the country in a serious financial situation and have discredited it internationally.

Ronald Lamola, South Africa’s justice minister, had given assurances that “the accused will be handed over to the Mozambican authorities for trial”. Following a report titled “High Court orders Justice Minister Lamola to halt extradition of Manuel Chang to Mozambique”, the Mozambican anti-corruption watchdog, Forum de Monitoria do Orçamento (FMO), launched an application at the Johannesburg High Court on 24 August for an order to prevent his extradition. On 27 August Pretoria reversed its decision.

Ana Sheila, representing Mozambique’s national prosecutor, said the prosecution is seeking stiff prison sentences for the 19 defendants and compensation of $2.9bn, including interest. “The actions of the defendants have left the country in a serious financial situation and have discredited it internationally,” she told the makeshift court that has been set up in a canvas tent on the grounds of the Machava High Security Prison, outside the capital Maputo.

Lawyers for six of the 19 defendants – including Ndambi Guebuza, who will testify later – said their clients denied the charges. The remaining lawyers, who have not yet had the opportunity to speak, had previously pleaded for their clients’ release, claiming that they had acted on behalf of the state.

A crisis with lasting consequences

In 2016, the government admitted that it had taken out loans without the approval of parliament and donors. This announcement shocked the markets and caused the metical – the national currency – to fall by 70% against the dollar. The US rating agency Standard & Poor’s then downgraded the country’s debt from “highly speculative” to “in default with little prospect of recovery”.

Mozambique, which in 2019 was ranked 181st out of 189 on the Human Development Index (HDI), still owes this amount.

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