Mozambique: A presidential guide to stashing dodgy cash
What to do with all those ill-gotten gains? A new report offers some clues.
The biggest corruption scandal in Mozambique’s history happened before Filipe Nyusi became president. Nonetheless, he benefited.
The “tuna bond” scandal, a scam concocted by Swiss bankers, ruling elites and a handful of dubious middlemen, diverted billions of dollars intended for development into the pockets of individuals. Bribed Mozambican individuals got at least $200-million from it. Nyusi’s cut was around $1-million, which he received as “campaign donations”, according to court documents in both the United Kingdom and United States. Some of the officials have been and will be tried. But lawyers argued that presidential immunity protected Nyusi from prosecution for the scam, which left Mozambique’s exchequer was crushed under the weight of crippling debt, and has stunted the country’s economic growth.
Outside court, the sheer brazenness of the corruption displayed in the “tuna bond” scandal cemented public perceptions that Frelimo, the country’s liberation party, was deeply and possibly irredeemably corrupt. Those sentiments are playing a major role in ongoing anti-government protests – sparked by allegations of a stolen election – which have been repressed with deadly force by Nyusi’s security forces.
Into South Africa’s laundromat
A million dollars of unknown provenance is nice but brings its own problems: Where to store all that money, and how to make it look legitimate. The Mozambican elites found a solution in South Africa.
Shortly after Nyusi got those “campaign donations”, a R3.9-million ($360,000 then) house in Constantia, an upmarket Cape Town suburb was bought in the name of Nyusi’s son, Jacinto Ferrão Filipe Nyusi. He was just 20 years old at the time. This is revealed in a new investigation by Open Secrets, a campaigning group that investigates financial crimes.
In 2015, Jacinto Nyusi bought a second South African property: a R17.5- million ($1.55-million then) mansion in Sandhurst, Johannesburg, on a quiet street “lined with mansions concealed behind towering walls and 24-hour guard posts”, says Open Secrets in For Sale: South Africa’s Property Laundromat.
The first property was sold in 2018 for R4.5-million ($340,000 then). The second appears to have been hastily sold in March 2022 for less than half its purchase price. The timing is relevant: at the time of the fire sale, back home in Mozambique, court proceedings were under way that would eventually convict the son of Nyusi’s predecessor, president Armando Guebuza, of corruption.
According to court records in the United States, the former president’s son, Ndambi Guebuza, took $33-million in bribes in the tuna bond scandal. He was sentenced to 12 years in prison by a Mozambican court in late 2022, in relation to these illegal activities.
Dainfern Estate, and a R10.8-million property in Kyalami Estate. So too had president Guebuza’s daughter, the late Valentina de Luz Guebuza. According to property records viewed by Open Secrets, she owned two properties in Dainfern, purchased for R15-million each.
Good neighbour for the corrupt
“Gated communities and high-walled mansions line luxury neighbourhoods in South Africa’s big cities. These fortressed homes have one goal for their rich, powerful owners: to keep criminals out. But what about the criminals who live inside them?” asks Open Secrets.
The question is rhetorical.
That’s why it remains an attractive destination for potentially dodgy cash, which is part of why the country has been “greylisted” by international watchdogs. Anti-money-laundering laws are not always enforced.
In addition to the Mozambican examples, the Open Secrets report documented how ruling elites in the Democratic Republic of Congo and Equatorial Guinea also invested the proceeds of alleged corruption into luxury South African properties.
“South African public and private sectors seemingly facilitated stolen wealth from Mozambique, the DRC, and Equatorial Guinea to be hidden in luxury properties.
In doing so, South African institutions became complicit in facilitating corrupt transactions that harmed the most vulnerable communities in these countries,” the report concludes.
