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State Should Not Accept Low Royalties From Megaprojects – President

State Should Not Accept Low Royalties From Megaprojects – President

The Mozambican President, Daniel Chapo, defended this Monday (10) that training human resources should be a priority in order to guarantee more efficient control of megaprojects in the country, ensuring that the revenues from the exploitation of natural resources result in direct benefits for the population.

According to Lusa, during the swearing in of João Machatine as executive coordinator of the Office for the Coordination of Reforms and Strategic Projects, Chapo said that Mozambique can no longer accept lower revenues from its own resources and criticised the lack of essential infrastructure in the communities where the major exploration projects are located.

The head of state emphasised that Mozambique has vast strategic resources, including arable land, water resources, an extensive exclusive economic zone and subsoil wealth, and that bold decisions need to be taken to ensure that these assets are managed sustainably and transformed into engines of development.

According to Chapo, dependence on foreign aid needs to be broken and the economic model based on the export of raw materials with no added value needs to be rethought. To this end, he considers it essential to train specialised national staff, so as to guarantee greater control over investments and the exploitation of resources, preventing the benefits from escaping the country.

In addition to the need to strengthen human resources training, the President emphasised the importance of creating mechanisms to ensure transparency and efficiency in the application of revenues from the extractive sector, guaranteeing that these funds are directed towards community development.

Mozambique currently has three major projects approved for the exploitation of natural gas reserves in the Rovuma basin in Cabo Delgado, and is developing coal extraction operations in the central province of Tete and natural gas in Inhambane.

In 2023, the Mozambican state transferred 77.1 million meticals to community development programmes, with funds from mining and oil exploration, according to the report Conta Cidadão 2023, from the then Ministry of Economy and Finance, now the Ministry of Finance.

The community of Nyamanhumbir, in the district of Montepuez, received 21.4 million meticals for local projects resulting from ruby mining in Cabo Delgado. Benga, in Moatize district, received 15.3 million meticals from coal mining in Tete province, while Pande, in Govuro district, received 7.3 million meticals from natural gas extraction in Inhambane.

Chapo urged the new coordinator of the Office for the Coordination of Reforms and Strategic Projects to implement concrete actions and establish partnerships that will accelerate the country’s economic and social growth. For the President, this office must be a catalyst for profound changes in the Mozambican economy and society, altering the current reality, still marked by colonial heritage, where the economy is still centred on the export of raw materials and logistics corridors.

In 2023, the government defined that 10 per cent of tax revenues from the extractive industry should be used to finance structuring projects in the producing provinces and to directly support local communities, in an attempt to mitigate the impacts of exploitation and guarantee more equitable development.

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