Economist Egas Daniel argued on Tuesday (July 1) that revenues from natural gas exploitation should be strategically invested in sectors such as education, infrastructure, and human capital development to ensure lasting benefits for current and future generations.
Speaking at the 1st National Conference on the Extractive Sector and Energy, organized by the Center for Democracy and Human Rights (CDD) in partnership with Oxfam Mozambique, Egas Daniel—Vice President of the Monetary Policy and Financial Services Department at the Confederation of Economic Associations of Mozambique (CTA)—outlined a chronological overview of the evolution of the extractive sector in the country, highlighting key legislative, institutional, and economic milestones.
Among the events discussed were the enactment of the Mining and Petroleum Law, the hidden debts scandal, the suspension of investments due to the insurgency in Cabo Delgado, and the recent start of natural gas exports via the floating platform in the Rovuma Basin.
The economist emphasized that the expectations surrounding the natural resource “boom” influenced premature financial decisions, such as contracting the hidden debts, whose repayment schedules were set to coincide with the gas production phase. “Part of the future gas revenues is already committed to paying off those debts and their respective interest,” he warned.
Nonetheless, he stressed that governance of the sector will be decisive in determining whether natural resources become a “blessing” or a “curse.” “The way gas revenues are managed will determine whether Mozambique moves toward sustainable development or stagnation,” he stated. Among the options, Egas Daniel proposed the creation of a sovereign wealth fund with clear rules, capable of generating long-term returns, or direct investment in strategic sectors that ensure both economic and social returns. “Investing in education, infrastructure, and human capital is the key to ensuring that gas revenues contribute to the country’s progress, even after the resources are depleted,” he emphasized.
Using international examples, the economist highlighted Norway’s model, whose sovereign wealth fund exceeds one trillion dollars and supports much of the state budget solely through interest generated. In contrast, he warned of the risks of following paths like those of Nigeria and Venezuela, where resource abundance was accompanied by systemic corruption, persistent poverty, and instability.
“Mozambique still has time to choose its path. The potential is there, but everything will depend on the strength of institutions and the quality of governance,” he concluded.
Text: Felisberto Ruco
