MAPUTO (Reuters) - Mozambique’s finance minister has a plan to deal with a debt crisis that threatens to derail one of Africa’s most promising frontier economies but investors are far from convinced.

A fisherman repairs nets in Maputo, Mozambique, September 26, 2016. REUTERS/Grant Lee Neuenburg/File Photo

Adriano Maleiane told money managers in Maputo last week an independent audit should bring transparency to billions of dollars of secret debts while negotiations with creditors would calm financial markets and bring the International Monetary Fund (IMF) and Western donors back to the table.

However, in interviews, bond-holders, energy executives, Western diplomats and political analysts expected Mozambique’s crisis will run deeper and longer than Maleiane says as debt talks hit hurdles and a planned gas boom is delayed.

“There will be no quick fix,” one banker, who holds Mozambique government debt, told Reuters. “There is a lot to iron out and we need evidence of long-term stability before restructuring,” added the banker, who spoke on condition of anonymity.

President Filipe Nyusi’s government last week appointed risk management firm Kroll to conduct an audit into secret loans, a condition for the IMF to resume aid talks with this war-scarred southeast African nation. The Mozambique government said earlier this year it arranged sovereign borrowing without parliamentary approval, as required by law.

Maleiane said he does not think the audit will uncover any more secret loans, but left the door open by asking anyone who knew about extra debt to come forward.

“That doesn’t fill me with confidence,” said another bond- holder who declined to be identified because of the sensitivity of the issue. “If the finance minister doesn’t know, who does?”

Maleiane wants to renegotiate some of the government’s $11.2 billion in debt with creditors by January but Western donors, the IMF, international banks and hedge funds will all want the best deal and for the other parties to commit first.

“Who wants to blink first?” Stuart Culverhouse, an analyst at Exotix investment bank, said, adding: “Comprehensive debt restructuring could take a long time and potentially get messy while the audit may reveal more skeletons. The government’s timeline is extremely ambitious.”

GAS SEEN AS SAVIOR

Until recently one of Africa’s brightest prospects, Mozambique is facing its biggest economic crisis since a 16-year civil war ended in 1992 after evidence of more than $2 billion in secret loans emerged earlier this year.

Problems have accelerated since the IMF and Western governments withdrew aid vital to funding the budget of Mozambique, which gained independence from Portugal in 1975 after five centuries as a colony.

The metical currency has dropped 40 percent this year, public services have deteriorated and inflation rose to 25 percent in September, from just 5 percent a year ago.

Mozambique hopes its financial saviour will be the development of huge gas reserves, which Maleiane said would begin to flow by 2021. Bond-holders will be relying on gas revenues to get their money back, making the timing crucial.

These future riches are what makes Mozambique appealing to investors but the gas will probably arrive later than hoped given political wrangling and depressed energy prices, energy executives and Western diplomats said.

“In a perfect environment, we could start production in five years,” a source at Italy’s energy giant Eni told Reuters. “I think realistically, first production might be 2023,” said the source at Eni which is leading some of the biggest projects.

Work can only begin when Eni makes its final investment decision, which is likely to take place this year. U.S. firm Anadarko could follow suit on its planned onshore LNG project by the end of 2017.

CRANES IDLE, FOOD PRICES RISE

The shifting gas timeline puts a strain on debt negotiations. If creditors push repayment out to 2021, they may have to restructure again in a few years.

“Where does it end? We don’t want to rush in and be back where we started in a few years,” one bond-holder said.

The size of gas reserves - enough to supply Germany, Britain, France and Italy for nearly two decades - could turn one of the world’s poorest countries into a middle-income state and global Liquefied Natural Gas exporter.

But most ordinary Mozambicans cannot wait as the economic crisis spreads from the debt markets to the streets. Signs are ominous as fuel and electricity prices increased in the last month, hitting some of the poorest people in the world.

The public fears bread prices could be next with bakers shrinking the size of loaves to cope with higher wheat prices. Bread price increases have led to riots in the past and, so far, government subsidies have prevented any increase this year.

“Prices will rise soon. We won’t put up with it,” said construction worker Francisco Machava, 58, dressed in grease-stained overalls and holding a plastic bag filled with loaves.

“We heard about these loans and we feel something is not right. We feel it in our stomachs.”

In the capital Maputo, cranes are idle and buildings half-finished as a construction boom fueled by healthy growth fades. The economy grew seven percent in the last five years but is expected to fall to 3.7 percent this year.

Most of Mozambique’s around 26 million people have been oblivious to the debt scandal that began in 2013 but they are becoming more aware as high inflation and a plummeting currency hit them in their pockets.

“I’m not an educated person but I am beginning to understand the government has done something very wrong,” 38-year-old housekeeper Ana Cuave told Reuters in a rundown Maputo suburb.

“We’re getting angry.”