The establishment of the Banco National de Investimento (BNI), the Mozambican development bank, in 2010, was regarded as a lower-cost alternative source of funding for development, especially with regard to economic and social Infrastructures. The present Devenvolvimento Review (ResR) shows that, in addition to the failure of being a development catalyst, BNI has been a destabilising institution of the Mozambican banking system due to poor capital management, high operating costs, high rates of non-performing loans and low profitability of its banking assets.
The Banco Nacional de Investimento (BNI) was established on June 15, 2010, with a share capital of USD 500 million (Government of Mozambique - 49.5%, Government of Portugal - 49.5% and Banco Comercial de Investimento - BCI - 1%)1 . BNI was created as a development bank dedicated to long-term investments in Mozambique, including socio-economic infrastructure with a direct impact on reducing poverty and improving the population’s living conditions. However, 10 years after the creation of this institution, infrastructure remains one of the main factors that penalise the business environment in Mozambique, poverty has stagnated2 and Mozambicans’ quality of life has been decreasing year after year .
In fact, BNI is an unknown institution for most of Mozambicans, and definitely has moved away from its role of an investment bank for catalysing economic development. Contrary, BNI has been focusing on “hunting” financial commissions by providing financial assistance services to government institutions searching for loans in the international financial markets. BNI’s role and payments received during various consultancies provides clear examples of this. According to the 2017 Independent Audit report (Kroll, 2017) that analyses the illegal loans contracted by ProIndicus SA, EMATUM SA and Moçambique Asset Management SA, BNI and Ernst & Young (EY) were involved in the restructure of the EMATUM debt. For this service, contracted by the Ministry of Economy and Finance (MEF), the “consortium” received USD 17,317,264, but Kroll made it clear that they did not obtain additional information about the services provided by BNI and EY. In 2019, BNI brokered financing for the Mozambique Electricity public company (EDM) valued at USD 80 million, granted with state guarantees by the African Development Bank. However, it remains unknown how much BNI has earned in commissions. This Desenvolvimento Review (DesR) shows that, in addition to not fulfilling its role as a development bank, BNI creates instability in the Mozambican financial system due to its poor financial performance. This is based on assessment against prudential, economic-financial indicators, and the standards established by the Bank of Mozambique (BM), as the supervisory authority of the Mozambican financial system. Following this introduction, this DesR then analyses some risks of instability in the Mozambican financial system generated by BNI, and finally, the last section outlines the main conclusions of this paper.
BNI “déjà vu”, the famous case of non-performing loans from the Banco Popular de Desenvolvimento (BPD)
The scandal of non-performing loans in Banco Popular de Desenvolvimento (BPD), the former Mozambican development bank, is certainly one of the most media cases that Mozambique has experienced in the last 30 years. It has captured public attention, not only due to its negative effects on the stability of the national financial system but also, due to the related violent murder of the then CEO, Siba Siba Macuacuá, in August 2001
In that time, the bank was already called Banco Austral following its privatisation (Mozambican State held only 40 % of the bank’s share capital). Macuacuá died when he was preparing to disclose the list of defaulting debtors, mostly individuals linked to the country’s political and business elite.
* Part of an analise published by CDD. the full article in the follow link https://cddmoz.org/wp-content/uploads/2020/03/Banco_Nacional_de_Investimento_BNI_A_Harmful_Development_Bank_to_Financial_Stability_in_Mozambique.pdf