For 10 years, from the beginning 2005 until the end of 2014, Armando Guebuza was the most powerful man in Mozambique. He controlled the levers of power as president of both the republic and of the governing Frelimo party.
But for two days, more than a week ago, Guebuza was treated like an ordinary citizen and subjected to gruelling questioning in a courtroom in Maputo. He was forced to explain his role in the $2.2-billion “hidden debt” scandal that plunged the country into a severe financial crisis — and took place under his watch.
Although his appearance may, for some, have dented the former president’s reputation, it was also an opportunity for him to address the Mozambican public — and to attack his successor, Filipe Nyusi.
And as Frelimo gears up for a congress in September to choose Nyusi’s successor, this battle between the party’s two biggest beasts has a significance beyond the corruption trial itself.
A fishy business
Guebuza was the last of 67 witnesses called by the attorney general’s office to testify at the televised hearings. For the past six months, the court — sitting in a tent in the courtyard of a maximum-security prison outside the capital, Maputo — has heard evidence that has implicated his inner circle in serious financial irregularities.
Although the former president has not himself been prosecuted, the accused include his private secretary and his chief political advisor, as well as his son, Ndambi. The defendants have been charged with assorted crimes including money-laundering, forgery, embezzlement, blackmail, criminal association and influence peddling.
The accusations centre around $2.2-billion that was borrowed by companies set up by the Mozambican intelligence service, backed by state guarantees. Infamously, some of this money was used to purchase tuna fishing boats that were allegedly vastly overpriced and unfit for purpose, and are currently rusting — unused — in Maputo’s harbour.
Under Mozambican law, debts of that size should never have been taken on without the approval of parliament and the administrative court. But parliament was never consulted, until after the scandal broke when it retroactively approved the loans.
In 2019, under pressure from civil society, the Constitutional Council ended up declaring the debts null and void. Mozambique has refused to honour two of the loans, but is slowly repaying one of them, which was worth $850-million, but will cost the country as much as $2.4-billion by the time it is paid off.
The man who signed the guarantees, the then finance minister Manuel Chang, has been languishing in a South African prison since December 2018, stuck in an extradition tug-of-war between Mozambique and the US.
Credit Suisse, the bank that financed part of the fraudulent deal, was fined $547-million by regulators in the US and UK. But no one has yet been brought to justice in Mozambique. And Guebuza, in his testimony, did his best to convince prosecutors – and the Mozambican public – that his hands are clean.
Passing the buck
Although Guebuza accepted responsibility for creating the companies in question, he pointed the finger of blame for the fraudulent activity at none other than Nyusi, who was his minister of defence at the time, and who chaired a group of senior officials that Guebuza set up and, he says, put in charge of the project.
“I trusted them. I delegated because I trusted the people I was working with,” Guebuza told the court.
But Nyusi has denied any involvement. Nyusi’s testimony, given to state prosecutors in 2018 and read aloud by the judge in court on Friday, said that he knew nothing about the dodgy companies at the heart of the scandal — and found out about their existence only when the scandal broke in 2016. Video footage currently doing the rounds in Mozambique casts doubt on this account, because it shows Nyusi discussing them in 2014 and 2015.
The two presidents’ contradictory accounts will make it difficult for prosecutors and judges to get to the bottom of what happened. But they may not be the final arbiters. Instead, all eyes turn now to the Frelimo party congress in September, at which Nyusi and Guebuza are vying to have the final say on who will be the candidate to succeed as president. They will each be hoping that their favoured candidate wins the nomination — and can keep them out of jail.
This article first appeared in The Continent, the award-winning pan-African weekly newspaper designed to be read and shared on WhatsApp. Download your free copy here