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Mozambique Wants Norway’s Expertise to Manage Sovereign Wealth Fund

Mozambique Wants Norway’s Expertise to Manage Sovereign Wealth Fund

The government recently expressed its interest in working with Norway to gather input for the management of the Mozambique Sovereign Fund (FSM) approved last year by Parliament.

According to a note sent by the Norwegian embassy in Mozambique, the intention was demonstrated during a meeting between members of the Norwegian Parliament’s Standing Committee on Foreign Affairs and the Mozambican ministers of Economy and Finance and Mineral Resources and Energy, Max Tonela and Carlos Zacarias, respectively.

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“The meeting provided greater insight into energy co-operation, economic development, poverty reduction and the establishment of the Sovereign Wealth Fund. The Mozambican Executive expressed interest in learning from Norway’s experiences in managing the Sovereign Wealth Fund,” he explained.

According to the same document, the delegation from that European country made a two-day visit (22 and 23 February) to Mozambique, during which they also met with the governor of the central bank, Rogério Zandamela, to learn about economic and monetary policy, the reforms underway and institutional cooperation between the banks of the two countries.

“Given Norway’s considerable portfolio of support in Mozambique, the parliamentarians sought to better understand the challenges and progress made in recent years, emphasising the sectors supported by the Norwegian government, namely Energy and Good Governance,” he added.

In January, the Mozambican President, Filipe Nyusi, promulgated the law creating the WSF, which had been approved earlier, on 15 December 2023, by Parliament.

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The proposal to create the WSF, presented by the government, received 165 votes in favour from the Mozambique Liberation Front (Frelimo) in the final vote, while 39 opposition MPs [Mozambican National Resistance (Renamo) and the Mozambique Democratic Movement (MDM)] voted against.

“Projections indicate that annual gas exports could amount to a nominal 91.7 billion dollars over the life cycle of the project, in a scenario in which all the development initiatives approved so far by the government are in operation. In this scenario, annual revenues for the state will peak in the 2040s at more than 6 billion dollars a year,” explained the Minister of Economy and Finance, Max Tonela, at the time.

The fund will have Banco de Moçambique as its operational manager and will be made up of revenues from the production of liquefied natural gas from areas 1 and 4, offshore in the Rovuma basin, from future oil and natural gas development and production projects, as well as from the “return on investment from the revenues” from the fund.

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