The week was marked by three developments with direct impact on Mozambique’s financial credibility and macroeconomic outlook: decisive progress in operationalizing the Sovereign Fund, the European Union’s announcement that Mozambique will be removed from the high-risk financial crime list, and the hiring of an international consultancy to support public debt restructuring.
The government announced that it has completed the critical phase for the effective launch of Mozambique’s Sovereign Fund, created in 2023 to ensure prudent and transparent management of revenues from natural gas exploitation.
According to Finance Minister Carla Louveira, all legal and operational instruments are finalized, and now only the management agreement between the Treasury and the Bank of Mozambique is awaited, expected in the coming weeks. This step will allow the capitalization of the Fund, which had a transitory account balance of 13.4 billion meticais (USD 204.5 million) as of 23 October. The Sovereign Fund will receive 40% of gas fiscal revenues, while the remaining 60% will go to the State Budget. The minister emphasized that the main goal of the mechanism is to ensure macroeconomic stability, intergenerational responsibility, and good governance in the use of natural resources.
The operationalization of the Fund comes in the context of three megaprojects in the Rovuma Basin, with active production from the Coral Sul unit and progress on the Afungi peninsula.
On the external front, the European Union confirmed that Mozambique will soon be removed from its list of high-risk countries for money laundering, following the formal exit from the “grey list” of the Financial Action Task Force (FATF). This decision was received as recognition of the work carried out by Mozambican institutions over the past three years, particularly in fully implementing the FATF action plan. In a statement issued in Maputo, the EU delegation highlighted the role of national institutions and technical partners, such as the United Nations Office on Drugs and Crime, which supported actions in justice, real estate regulation, gambling, and counter-terrorism financing. European Ambassador to Mozambique Antonino Maggiore noted that the country demonstrated strong commitment to strengthening its financial and legal system, serving as a positive example in the region.
Meanwhile, in response to increasing pressure on public accounts, the government hired the US consultancy Alvarez & Marsal to provide technical support for public debt restructuring and the development of a new Debt Strategy for 2026–2029. This measure, approved by a Cabinet resolution, aims to ensure greater fiscal sustainability and curb the rapid growth of debt, currently estimated at USD 14.4 billion.
The Governor of the Bank of Mozambique, Rogério Zandamela, had already warned about the risks of the debt trajectory, emphasizing that its continuous increase could compromise economic growth. Authorities hope that this technical support will help rebalance fiscal accounts without neglecting the investments necessary to sustain the economic recovery.
On the economic front, the appreciation of Mozambican Eurobonds reflected the immediate impact of TotalEnergies’ decision to resume the liquefied natural gas project in Area 1, Cabo Delgado, after the force majeure clause in effect since 2021 was lifted. The move was interpreted by markets as a sign of confidence in improved security conditions, where Mozambican and Rwandan forces have reinforced their presence.
The project, with a capacity of 13 million tons of gas per year, is considered strategic for balance of payments stability and public accounts sustainability, with potential to generate substantial fiscal revenues in the coming years. This resumption strengthens Mozambique’s positioning as a key player in the global energy market.
Text: Felisberto Ruco
