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Mozambique Plans to Transfer 32.9 Million Dollars Annually to Sovereign Wealth Fund

Mozambique Plans to Transfer 32.9 Million Dollars Annually to Sovereign Wealth Fund

The government plans to transfer an average of 2.1 billion meticais (32.5 million dollars) to the Mozambique Sovereign Fund (FSM) every year until 2027, according to the document on the “Medium Term Fiscal Scenario (CFMP)” published by Lusa.

“With the implementation of the new FSM law, it is planned to allocate an average of 49.4 million dollars, equivalent to 3.1 billion meticais, to the State Budget (OE) over the 2025-27 period, as well as 32.9 million dollars, corresponding to 2.1 billion meticais, to the Sovereign Fund,” it says.

In the document approved this month by the Council of Ministers, the Executive recalls that the amount of revenue from liquefied natural gas (LNG), which must be transferred from the Transitory Account to the State Budget, is set at 60 per cent of projected revenue until 2038, and then reduced to 50 per cent.

The CFMP also emphasises that gas revenues must meet specific objectives, namely to finance domestic investments in priority areas, in accordance with the National Development Strategy (ENDE), but also to boost economic and social growth and development in areas of infrastructure, agriculture, renewable energies and industry.

“Through the Sovereign Fund, to be managed on the basis of a clearly defined investment policy aimed at maximising long-term returns and guaranteeing the country’s financial security, it is expected that these resources will initially be invested in low-risk financial assets,” he adds.

“LNG revenues for the State Budget offer the potential for more significant growth, but are also subject to price volatility and fluctuations in global demand,” the document warns.

The government has already finalised all the necessary instruments for the operationalisation of the WSF and is in the process of setting up two important bodies, namely the Investment Advisory Board, whose seven members will be appointed by the Executive, and the Supervisory Committee, with members from civil society, which is the responsibility of Parliament.

On 15 December, Parliament approved the creation of the FSM with revenues from natural gas exploration, which by the 2040s should reach 6 billion dollars a year.

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