The lack of a management agreement between the government and the BoM (Bank of Mozambique) is hampering the full functioning of the Sovereign Fund’s supervisory bodies. Without this agreement, which is essential for the operationalisation of the Fund, the executive’s supervision and consultation activities remain limited, as Carta de Moçambique reported .
The Sovereign Fund’s supervisory committee, set up almost 60 days ago, was the first body to become operational. However, its actions have been restricted to meetings and preparatory work, due to the lack of a management body, which prevents it from overseeing activities related to Rovuma natural gas revenues.
According to the information, this committee, made up of nine members and without a chairman appointed so far, is responsible for monitoring the Fund’s revenues, including overseeing deposits in the transitional account, the allocation of revenues to the state budget and to the Fund itself. However, without the management agreement, its ability to act remains blocked.
The investment advisory board, another key body of the fund, was announced by the government 12 days ago and will be chaired by Omar Mithá, chairman of BNI and adviser to the Mozambican President. However, this board has yet to take office, which also jeopardises the process of implementing the Sovereign Fund’s investment policies.
Enilde Sarmento, national director of economic policies and development at the Ministry of Economy and Finance, assured that the Sovereign Fund’s management instruments are ready and await approval by the Council of Ministers. Sarmento said that the management agreement will be signed soon, although she didn’t give a specific date.
This agreement will define the terms for delegating the operational management of the Fund to the BoM, including the costs associated with its administration. The signing of the document is key to unblocking the process and allowing the Sovereign Wealth Fund to start operating fully.
By the end of the first half of 2024, the transitory account, a sub-account of the Single Treasury Account (CUT), had accumulated 7.2 billion meticals (114 million dollars), from revenues from the export of Rovuma gas, since operations began in 2022.
In the first 15 years of operation, 40 per cent of the Sovereign Fund’s revenues will be allocated directly to the entity, while 60 per cent will revert to the State Budget, according to Law No. 1/2024. However, the lack of a management agreement prevents this scheme from being fully implemented.
