Former Mozambique finance minister on trial in US

Former Mozambican finance minister Manuel Chang has gone on trial in the United States over his alleged involvement in the “tuna bond” scandal, which surfaced in 2016. Chang, who served as finance minister from 2005 to 2015, faces charges of accepting bribes to facilitate large loans that were subsequently misappropriated.

The loans, originally intended to finance a fleet of tuna fishing vessels, instead spiraled into a financial debacle when it was revealed that Mozambique had amassed $2 billion in “hidden debt.” Prosecutors claim that substantial portions of these funds were diverted to pay bribes and kickbacks to bankers and government officials, including $7 million allegedly received by Chang himself.

Assistant U.S. Attorney Peter Cooch asserted during the trial’s opening statements that Chang “abused his authority to enrich himself through bribery, fraud, and money laundering.” Chang has pleaded not guilty to these charges.

Defense attorney Adam Ford countered by arguing that there is no evidence proving Chang agreed to or received any payments in exchange for committing Mozambique to guarantee the loan repayments. Ford emphasized that Chang acted in accordance with governmental directives when he signed off on these guarantees.

The repercussions of the scandal have been profound for Mozambique’s economy, potentially costing the country an estimated $11 billion, equivalent to around 60% of its current GDP. Prior to the debt revelation, Mozambique had been one of the world’s fastest-growing economies for two decades, according to the World Bank. However, after the scandal broke, economic growth stalled, the currency depreciated, inflation surged, and foreign investor confidence plummeted. The International Monetary Fund (IMF) withdrew its support for Mozambique in response.

In an effort to mitigate the financial fallout, Mozambique’s government has negotiated settlements with various creditors. Last year, the country paid $142 million to Credit Suisse and reached agreements with Russia’s VTB Bank and Portugal’s BCP Bank. Meanwhile, the scandal has led to legal actions in Africa, Europe, and the U.S., resulting in convictions and sentences for several individuals involved, including Ndambi Guebuza, the son of Mozambique’s former President Armando Guebuza.

Chang’s extradition to the U.S. from South Africa, where he was arrested in 2018, followed years of legal battles. His defense had sought to dismiss the case on grounds including the assertion of immunity as a former foreign official, but U.S. District Judge Nicholas Garaufis rejected these arguments.