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Government to Bring Sovereign Fund to Parliament Again in October

Government to Bring Sovereign Fund to Parliament Again in October

In October, the Mozambican government will once again take the bill on the Sovereign Wealth Fund, which is expected to raise one billion dollars annually from natural gas revenues, to Parliament, awaiting parliamentary consensus.

According to the notice for the 8th ordinary parliamentary session, which will run from 19 October to 21 December, to which Lusa had access this Wednesday, 27 September, the bill creating the Mozambique Sovereign Fund (FSM) is one of the 23 items on the agenda.

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Frelimo, the ruling party, argued in Parliament on 7 August that this proposal should be approved by consensus between all parties. However, its debate has been postponed several times on the grounds that the document needs to be improved. “We want a genuinely Mozambican law and, to this end, we are working towards consensus on the proposal that creates the FSM,” said Feliz Sílvia, spokesperson for the Frelimo caucus in the Assembly of the Republic, at the time, to justify the removal of the proposal from the agenda of the extraordinary session that was taking place at the time.

Feliz Sílvia pointed out that the Frelimo bench also wanted Renamo, the main opposition party, and the Democratic Movement of Mozambique (MDM), the country’s third largest political force, to agree to the future law.

For his part, the Minister of Economy and Finance, Max Tonela, also said in August, during a parliamentary hearing, that the FSM is expected to collect one billion dollars a year from natural gas exploration revenues within ten years.

“On average, over the 25 years of the [natural gas exploration] concession contract, the Mozambican state will receive 750 million dollars,” explained the government official, who was questioned in parliament by members of the First Committee on Constitutional Affairs, Human Rights and Legality and the Second Committee on Planning and Budget.

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Meanwhile, an activist from a civil society platform that is monitoring the process of setting up the FSM told Lusa that the proposal previously put forward by the Executive does not take on board the recommendation that the future account should have a system of governance independent of the Executive, through a mechanism of accountability to Parliament, keeping it vulnerable to political conditioning. It also fails to respond to civil society’s request that more than half of the revenues from natural gas exploitation should be channelled to the GSF and not just 40%, as stated in the proposal.

The proposal also did not include the suggestion that revenues from the National Hydrocarbons Company (ENH), the state’s business arm in the sector, be deposited in the fund, nor that the managers of the account be hired by public tender.



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