South Africa to extradite ex-Mozambique minister for debt scandal trial

PUBLISHED: Tue, 24 Aug 2021 10:11:11 GMT
Manuel Mucari
Reuters
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Key Points
  • $2 bln debt scandal tipped economy into crisis
  • Trial of 19 accused begins near Maputo
  • Prosecution seeks $2.9 bln in compensation
African Financial Ministers Press Briefing
Manuel Chang, Minister of Finance of Mozambique, gives a statement to the media during the African Financial Ministers Press Briefing on Saturday, April 12 at IMF Headquarters during the 2014 IMF Spring Meetings in Washington, D.C. IMF Photo/Ryan Rayburn

MAPUTO, Aug 23 (Reuters) – South Africa will extradite former Mozambique finance minister Manuel Chang to his home country, its justice department said on Monday, where a criminal trial over the $2 billion debt scandal that crashed its economy has now begun.

Chang, who denies wrongdoing, and 19 others including state security officials and a former president’s son face charges including blackmail and embezzlement for their alleged roles in the disappearance of hundreds of millions of dollars in government-backed loans.

A total of $2 billion in borrowing was ostensibly raised for a project spanning tuna fishing, shipyard development and maritime security. But vast sums were paid out in kickbacks, authorities say, while many promised benefits never materialised.

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Chang, who signed off on the loans during his 2005-2015 term as finance minister, has been held in South Africa since 2018 after being arrested at the request of the United States, which also opened a criminal case over the affair.

Mozambique also subsequently requested his extradition, prompting a court battle that ultimately left the decision in the hands of Ronald Lamola, the justice minister.

Lamola decided to return Chang to Mozambique after concerns over whether he was immune from prosecution were resolved, Lamola’s ministry said in its statement.

“The accused will therefore be handed over to Mozambican authorities to stand trial,” it continued.

It was not immediately clear if Chang could join this phase of the trial, which got under way on Monday, or would be tried separately.

Chang’s lawyer did not respond to a request for comment.

‘DISCREDITED’

The case has had a deep impact on the economy. Not all of the loans were disclosed to parliament or donors like the International Monetary Fund. When the full extent of the borrowing was revealed in 2016, it prompted donors to cut off support and triggered a currency collapse.

Mozambique, one of the world’s poorest countries, currently remains on the hook for the money.

Read more: Mozambique launches construction of $1 bln power plant, transmission line

Ana Sheila, representative of Mozambique’s national prosecutor, said the prosecution was seeking harsh punishments for the other 19 accused and $2.9 billion in compensation, including interest.

“The defendants’ acts left the country in a grave financial situation and internationally discredited,” she told a makeshift courtroom crafted from a canvas tent in the grounds of a maximum security prison outside the capital, Maputo.

Defence lawyers for six of the 19, including Armando Ndambi Guebuza, son of former president Armando Guebuza, who will later give evidence, said their clients denied wrongdoing.

Others, who have not yet had chance to speak directly to the accusations against their clients, had earlier argued for their release and said they were acting on behalf of the state.

(Reporting by Manuel Mucari in Maputo and Emma Rumney in Johannesburg; Writing by Emma Rumney; Editing by Promit Mukherjee, Jonathan Oatis and Alison Williams)

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