Mozambique’s constitutional court declared on Tuesday that hundreds of millions of dollars in secret government loans were void, signalling that they did not need to be repaid in a ruling hailed by civil society campaigners.
The court ruling focused on one of the secret loans – which combined totalled around $2 billion – taken out by the government between 2013 and 2015 for supposed financing for a tuna-fishing fleet and a maritime surveillance project.
Mozambique has arrested several senior former officials linked to the scandal, which has been described as a vast fraud and money laundering scheme.
Civil society groups say the loans from international banks were illegal and that Mozambicans must not be burdened with years of hefty repayments.
The constitutional court declared “the nullity of the acts inherent to the loan” – voiding an $850 million debt contracted by the state tuna-fishing company Ematum.
“This decision represents a great victory for the Mozambican citizen,” said Denise Namburete of the Budget Monitoring Forum, an organisation that brought the case.
“It means that any action by the government regarding this debt will be a violation of the country’s highest lawmaking body.”
An independent audit found that $500 million of the loans, which were deliberately hidden from the country’s parliament as well as international donors, was diverted and remains unaccounted for.
When the debt was revealed, Mozambique was plunged into the worst financial crisis in its history.
The international bodies allege that at least $200 million was spent on bribes and kickbacks, including $12 million for former finance minister Manuel Chang.
Mozambique defaulted on the debt, and repayments could swallow up future revenue from natural gas deposits discovered in the north of the country.