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Mozambique’s LNG to Triple Foreign Direct Investment By 2024 – Government

Mozambique’s LNG to Triple Foreign Direct Investment By 2024 – Government

The Mozambican government estimates that foreign direct investment (FDI) in the country should more than triple next year, driven by the natural gas exploration business, to €4.537 billion, according to the state budget proposal for 2024.

In the documents supporting the proposal for the Economic and Social Plan of the state budget (PESOE) for 2024, to which Lusa had access on Thursday, the government points to a growth in FDI of US$1.425 billion (€1.353 billion), in the estimate for this year, to US$4.778 billion (€4.537 billion) next year.

Despite the 235% increase, FDI attracted to Mozambique is still unlikely to recover next year from the falls in 2022 – US$1.975 billion (€1.875 million) – and 2023, “due to disinvestment by companies in the coal industry”, given the peak of more than US$5.101 billion (€4.844 million) in foreign investment attracted in 2021.

“With regard to foreign direct investment (FDI) for 2024, an improvement is expected, mainly influenced by the resumption of investments by TotalEnergies in the Rovuma Basin,” reads the report, which will be discussed and voted on during the eighth ordinary parliamentary session, which takes place in Maputo from 19 October to 21 December.

In the PESOE report for 2024, the government also estimates a “notable increase in imports of specialised services by the major projects” underway in the country, as well as the “resumption of operations by TotalEnergies”, the French multinational’s project in Cabo Delgado, valued at more than US$20 billion and suspended since the start of the terrorist attacks in that northern province.

Also the expansion of “production plants at other projects, such as Montepuez Ruby Minning, HCB [Cahora Bassa Hydroelectric Plant] and Coral North FLNG”.

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“They could require a considerable increase in imports of goods and services, which could exceed the expected increase in exports with the start of natural gas exploration,” the report points out.

The PESOE forecasts that Mozambique will close 2024 with net international reserves (NIR) of US$2.235 billion, enough to guarantee three months of imports of goods and services, compared to the forecast of US$2.433 billion for the end of this year, enough for 3.7 months.

The Mozambican government expects the country’s Gross Domestic Product (GDP) to grow by 5.5% next year – against a forecast of 7% in 2023 – to 1.536 trillion meticais (more than €22,720 billion), an inflation rate of 7% and exports worth US$9.703 billion (€9.215 billion).

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