The former finance minister of Mozambique is currently undergoing trial in a US court for his involvement in the infamous “tuna bond” scandal, purportedly responsible for precipitating a significant debt crisis in the African nation. Manuel Chang, who occupied a prominent financial position in Mozambique from 2005 to 2015, is confronting charges of bribery, fraud, and money laundering. Prosecutors allege that he accepted bribes to secure substantial loans for the country, a notable portion of which was subsequently misappropriated.
The loans, amounting to $2 billion, were intended to finance diverse projects, including investments in tuna fishing vessels and infrastructure to safeguard natural gas fields. Nevertheless, it is asserted that a considerable sum of the funds was diverted towards gratuities for bankers and government officials, with allegations that some of the money ended up in Chang’s personal accounts. Notwithstanding these grave allegations, Chang has steadfastly maintained his innocence, pleading not guilty to the conspiracy charges levelled against him.
The trial, currently underway in a federal court in Brooklyn, has elicited testimony from critical prosecution witness Andrew Pearse, a former Credit Suisse banker who acknowledged receiving substantial kickbacks from the loans. He divulged that the government guarantees provided by Chang were pivotal in securing the loans, as the companies involved were perceived as high-risk by the banks. Pearse’s testimony has provided further insight into the convoluted web of corruption and malfeasance that typified the scandal, unveiling its far-reaching ramifications on Mozambique’s economy and populace.
The aftermath of the “tuna bond” scandal has been catastrophic for Mozambique, which witnessed its once burgeoning economy descend into turmoil subsequent to the unearthing of the concealed debt. The crisis had extensive repercussions, resulting in stagnated growth, currency devaluation, steep inflation, and a loss of confidence from foreign investors. The withdrawal of support from the International Monetary Fund exacerbated the country’s financial predicament.
In accordance with a 2021 report by the Chr. Michelsen Institute, the loans may ultimately extract a toll of approximately $11 billion from Mozambique, equivalent to around 60% of its current GDP. The institute also underscored that the crisis had driven almost 2 million Mozambicans into poverty, as international investment and aid dwindled, compelling the government to implement substantial cutbacks to vital services.
Despite the substantial challenges posed by the scandal, Mozambique’s government has endeavoured to mitigate the impact by procuring out-of-court settlements with creditors. It has disbursed substantial sums to international banks such as Credit Suisse and VTB Bank in an endeavour to address the remaining debts. Moreover, Credit Suisse consented to a significant settlement with British and US authorities to resolve the bribery and kickback allegations linked to the scandal.
The trial of Manuel Chang in the US constitutes a constituent component of a broader legal endeavour to hold individuals accountable for their roles in the scandal. While some have been convicted and sentenced in Mozambique and elsewhere, the pursuit of justice persists on multiple fronts. The unfolding of the trial in the US and its implications for the broader efforts to redress the repercussions of the “tuna bond” scandal remain to be seen.