Corruption scandals often serve as grim illustrations of how greed within the corridors of power can devastate nations. One of the most notorious in recent history is Mozambique’s “hidden debt” fiasco—a scandal that crippled the country’s economy and left millions of citizens struggling. At the center of it all was Manuel Chang, the country’s former Finance Minister, who was sentenced on January 17, 2025, in a New York court for his role in facilitating a web of corrupt financial dealings that plunged Mozambique into fiscal disarray.
The crisis stems from a $2 billion secret loan scheme, orchestrated during Chang’s tenure as Finance Minister. The loans, sourced from international banks, were ostensibly intended to finance critical national needs, including the purchase of a tuna fishing fleet and enhanced maritime security infrastructure. Unfortunately, these ambitious projects never materialized. Instead, a significant portion of the funds was rerouted into the pockets of corrupt elites, with Chang himself reportedly accepting a $7 million bribe.
The ramifications were severe. When the loans defaulted, Mozambique was left grappling with an enormous **$2 billion public debt**, equivalent to **12% of its GDP**. International financial institutions like the **IMF** and **World Bank** suspended aid, further exacerbating the crisis. The Mozambican currency plummeted, foreign investors pulled out, and the resulting economic turmoil disproportionately hurt ordinary citizens. What began as a financial misstep quickly spiraled into a national tragedy.
After years of legal battles, Chang was convicted in August 2024 and sentenced to 8.5 years in prison. Expressing remorse during his sentencing, he admitted, *“When I signed off on these deals, I truly believed I was contributing to my country’s future. I now understand I made a grave mistake, one that derailed the very people I vowed to serve.”*
While his sentence reflects a measure of accountability, critics argue it is insufficient given the scale of the damage. Due to time served in detention in South Africa and the United States, Chang could be released in just 2.5 years and deported to Mozambique. His legal team has announced plans to appeal, leaving some unresolved threads in this long-running saga.
For Mozambique, a country once hailed as an African economic success story, the scandal has inflicted lasting damage. Trust in government financial management has eroded, foreign investment has dried up, and the burden of repaying misappropriated loans now rests heavily on struggling taxpayers. International outrage over the debacle also cast a harsh spotlight on the role of global financial institutions, raising critical concerns about how opaque loans to fragile economies are approved and monitored.
The “hidden debt” crisis is not just a story of one person’s greed but a chilling example of systemic corruption. During the sentencing, the judge declared, *“This is not just about one individual’s crime. It’s about addressing systemic corruption that continues to rob nations of their potential.”