Mozambique: Lack of transparency may collapse future sovereign fund; the Angolan experience – activists | Watch

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Mozambique: Lack of transparency may collapse future sovereign fund; the Angolan experience – activists | Watch

8:11 CAT | 14 Sep 2020

Image: CDD Moçambique

Civil society activists sais on Thursday that the creation and management of a future sovereign fund in Mozambique must be transparent so that the revenues from natural resources are not appropriated by the elites in power, as happened in Angola.

How a possible sovereign fund in Mozambique should be constituted and managed was the subject of debate on Wednesday at the webinar ” Angola Sovereign Wealth Fund: An Experience to Avoid”, whose main speaker was Angolan activist and journalist Rafael Marques and promoted by the Centre for Democracy and Development (CDD), a Mozambican civil society organisation .

Rafael Marques said that the sovereign fund of Angola was condemned to failure at the outset because it was created in a context in which the then Angolan President, José Eduardo dos Santos, and his family had a monopoly on economic and social life and prevented any public and transparent participation in the process of creating the mechanism.

“After the first president of the fund was exonerated, the son of José Eduardo dos Santos took over, who had no experience in finance and from then on was the debacle,” said Rafael Marques.

Using his initial allocation of $5 billion from the fund (€4.2 billion), José Filomeno dos Santos, son of José Eduardo dos Santos, involved the fund in ruinous schemes aimed at his benefit and that of people close to him, the activist said.

After José Filomeno dos Santos left, the government of João Lourenço used the remaining money from the fund to finance projects of dubious viability, namely, support for infrastructure projects in the country’s municipalities, he said.

The drainage of the fund’s resources was aimed at electoral propaganda given the local elections, which had been postponed.

João Mosca, economist and executive director of Observatório do Meio Rural (OMR), a Mozambican civil organisation, noted that there are worrying signs regarding the future Mozambican sovereign fund, characterising as opaque the process of elaboration of the technical proposal of this mechanism by the Bank of Mozambique (BM), entity charged by the government to work on the technical part of the document.

Mosca argued that there are similarities in the behaviour of the elites in power in Mozambique and Angola, which means similar problems in a future Mozambican sovereign fund.

Adriano Nuvunga, director of the CDD, said that the alleged mismanagement of capital gains that Mozambique has achieved in the sale of shares among multinationals involved in natural gas projects in the country is a negative background for an eventual sovereign fund of the country.

Source: Lusa