The “Hidden Debt” Scandal
Eight years after erupting, the so-called “hidden debt” case continues. A former Mozambique finance minister, involved in a massive international financial scandal that plunged his country into turmoil, was found guilty by US courts of complicity in this massive fraud and money laundering case.
The Guilty Verdict
Manuel Chang, 48, who was detained in South Africa from 2018 to 2023 at the request of US authorities, had been extradited to the United States in July 2023. He faced four weeks of trial before the federal court in Brooklyn, New York, and could face up to twenty years in prison, as per the US Department of Justice.
The Corruption Unveiled
As Mozambique’s Minister from 2005 to 2015, Chang had used the US financial system to divert funds and has now been convicted of various financial fraud and money laundering offenses amounting to $2 billion, defrauding investors in the US and elsewhere.
The Aftermath and Collaboration
The scandal erupted in 2016 after Mozambican public enterprises illegally borrowed $2 billion in 2013 and 2014 from international banks to purchase a fleet of tuna fishing boats and surveillance vessels. Chang, as Minister, had signed off on these loans, and the government had hidden the debt from Parliament. Following its revelation, international backers suspended financial support to Mozambique, leading to a sovereign debt default and currency collapse.
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The Impact and Consequences
Since the onset of this severe economic crisis, an independent audit has revealed that $500 million of the diverted funds have never been recovered, further worsening the economic situation of one of the world’s poorest countries.
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