After Mozambique's spending, the reckoning

By Douglas Mason

BEIRA PORT REMAINS A HEADACHE WITH ITS NEED FOR CONSTANT DREDGING, CAUSING BOTTLENECKS. PHOTO©THOMAS TRUTSCHEL/PHOTOTHEK VIA GETTY IMAGES

President Nyusi has inherited a poisoned chalice: he now has to cut spending, deal with the IMF and manage an elite grown fat through patronage politics.

In March, Mozambique will have to repay another $100m tranche of an opaque and roundly criticised bond deal. The money could have been used to build four hospitals. Instead, it will repay a wildly overinflated contract for tuna-fishing boats. In the words of the country's former prime minister Luísa Diogo: "Something has gone wrong."

Back in 2007, Mozambique was feted in ballrooms and boardrooms. Bankers pointed to stellar growth rates and the sound macroeconomic management that had led the fastest turnaround of a post-conflict country since Vietnam. Former president Joaquim Chissano won the inaugural Mo Ibrahim Prize for good governance that year.

Today, it seems like a rerun of Africa in the 1980s: rising debt, a pile-up of white elephant projects, murky finances and a balance-of-payments crunch requiring an International Monetary Fund (IMF) bailout.

( The Africa Report )

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