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Parliament Gives Final Approval to Creation of Sovereign Wealth Fund With Gas Revenues

Parliament Gives Final Approval to Creation of Sovereign Wealth Fund With Gas Revenues

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

The proposal to create the FSM, presented by the government, received 165 votes in favour only 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.

The creation of the Fund had been under consideration for several months, and the government had withdrawn the proposal from discussion in the National Assembly on more than one occasion, claiming that it was trying to achieve consensus on its approval, which did not happen.

“Projections indicate that annual gas exports could amount to around 91.7 billion nominal dollars over the life cycle of the project, in a scenario where all the development initiatives approved so far by the government are in operation. 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, in Parliament this week.

The WSF’s revenues come from the production of liquefied natural gas from areas 1 and 4, offshore in the Rovuma basin, and future oil and natural gas development and production projects, as well as from the “return on investment of the Fund’s revenues”.


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