In the first nine months of this year, the state collected a total of 8.5 billion meticals (134.6 million dollars) in revenue from oil and natural gas exploration. This money was invested in the newly created Mozambique Sovereign Fund (SWF), Lusa reported.
According to the economic and social balance of the implementation of the State Budget from January to September, drawn up by the Ministry of Economy and Finance (MEF) and released on Tuesday, 12 November, 74.1 million dollars relates to revenues for the years 2022-23, while the remaining 60.4 million dollars corresponds to the current year.
‘The amounts were deposited in the Transitional Account at the Bank of Mozambique, as established by Article 6 of Law No. 1/2024, of 9 January, which establishes the Sovereign Fund of Mozambique,’ the MEF document states.
According to the Ministry’s national director of Development Studies and Policies, Enilde Sarmento, the government has already finalised all the instruments needed to operationalise the FSM, which will be financed by the revenues from gas exploration projects.
She explained that two of the three main instruments required to make the FSM operational have been finalised: the Management Agreement, to be signed between the government and the governor of the Central Bank, and the Investment Policy, as well as the fund’s regulations, which were finalised and approved on 12 March.
The Investment Advisory Board, made up of seven members appointed by the government, and the Supervisory Committee, made up of members of civil society and under the responsibility of Parliament, were also set up.
“Parliament approved the creation of the WSF on 15 December last year, establishing that the fund will be made up of revenues from natural gas exploration, which by the 2040s could reach 379 billion meticals (6 billion dollars) a year.“
Parliament approved the creation of the WSF on 15 December last year, establishing that the fund will be made up of revenues from natural gas exploration, which by the 2040s could reach 379 billion meticals (6 billion dollars) a year.
On 12 March, the government estimated that the WSF would be operational in April, after the regulations were approved that same day, according to the Deputy Minister of Economy and Finance, Amílcar Paia Tivane.
‘Projections indicate that annual gas exports could amount to around 5.8 billion meticals (91.7 billion dollars) over the life cycle of the project, if all the development initiatives approved so far are put into operation.
In addition, the WSF regulation establishes the procedures for ensuring the transfer of resources from the exploitation of liquefied natural gas, as well as from future oil and gas projects. For the first 15 years, 60 per cent of revenues will be allocated to the State Budget and 40 per cent to the Sovereign Fund. From the 16th year onwards, the distribution will be equal (50/50).
In this scenario, annual revenues for the state should peak in the 2040s, exceeding 6 billion dollars a year,’ said the Minister of Economy and Finance, Max Tonela.
The International Monetary Fund (IMF) previously considered the creation of the FSM, approved by Parliament, as ‘an important step’ to ensure ‘transparent and sound management’ of natural resources.
