In the first quarter of this year, the state collected 5.9 billion meticals (94.2 million dollars) in revenue from oil and natural gas exploration. This amount was applied in full to the new Mozambique Sovereign Wealth Fund (SWF), reported the Lusa news agency.
According to the news report, which refers to data from the economic and social balance of the execution of the State Budget from January to March, made available by the Ministry of Economy and Finance, the accumulated revenues include 73.37 million dollars (4.6 billion meticals) for the current year, 20 million dollars (1.2 billion meticals) for the first quarter and 800 thousand dollars (50 million meticals) for 2022.
‘The amounts were deposited in the transitional account at the Bank of Mozambique, as stipulated in Article 6 of Law No. 1/2024 of 9 January, which establishes the FSM,’ the document states.
The instruments needed to make the Fund operational have already been concluded by the government, which will finance the fund with revenues from gas exploration projects, the national director of Development Studies and Policies at the Ministry of Economy and Finance told Lusa on 2 April.
Enilde Sarmento, director of Economic Policy and Development at the Ministry of Finance, explained that two of the three main instruments needed to make the WSF operational have already been finalised: the management agreement, which will be signed between the government and the governor of the Bank of Mozambique, and the Investment Policy. In addition, the fund’s regulations were finalised and approved on 12 March.
‘We’re now going to move on to the forums for appraisal and approval – we’re talking about the Council of Ministers – and then proceed to the signing of the management agreement between the government and the operational manager, who has the mandate to manage the fund and then start making it operational,’ she added.
She also highlighted the finalisation of other processes, such as the setting up of two committees: the Investment Advisory Board, whose seven members will be appointed by the government, and the Supervisory Committee, with members from civil society and which is the responsibility of Parliament.
Once the management agreement has been approved by the Council of Ministers, the Minister of Economy and Finance, Max Tonela, will be authorised to sign the document with the governor of the Bank of Mozambique.
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 annually.
‘Projections indicate that annual gas exports could reach around 91.7 billion dollars (5.8 billion meticals) 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,’ the minister explained at the time.
On 12 March, the government estimated that the WSF would be operational in April, following the approval of its regulations that day, as stated by the Deputy Minister of Economy and Finance, Amílcar Tivane.
‘It also defines the procedures for ensuring the transfer of resources associated with the exploitation of liquefied natural gas, and also revenues from the exploitation of future oil and gas projects, setting the proportion at 60 per cent for the State Budget and 40 per cent for the Sovereign Fund account for the first 15 years. And from the 16th year onwards in a 50/50 ratio,’ explained Amílcar Paia Tivane.
The International Monetary Fund previously considered parliament’s approval of the GSF to be ‘an important step’ in guaranteeing ‘transparent and solid management’ of natural resources.
