Mozambique Sovereign Fund: Chair of supervisory committee wants ‘transparency’ – Watch

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Mozambique Sovereign Fund: Chair of supervisory committee wants ‘transparency’ – Watch

8:10 CAT | 24 May 2025

Photo: Assembleia da Republica de Moçambique

The first chairman of the Supervisory Committee of the Mozambique Sovereign Fund (FSM), Emanuel Chaves, has set himself the goal of ensuring that natural gas revenues are channelled and used transparently.

“We will ensure (…) that the 40% [of natural gas export revenues] that should be deposited in the FSM account are getting there, [that] they are being properly managed (…) and are being used in a responsible, transparent manner,” Emanuel Chaves told journalists after being elected to the post by parliament on Thursday.

Parliament, which is responsible for appointing the Supervisory Committee, approved on 15 December 2023 the creation of the FSM with revenues from natural gas exploration, which are expected to reach $6 billion (€5.29 billion) per year in the 2040s.

Emanuel Chaves, a university lecturer with more than 30 years’ experience in the civil aviation sector, said the committee will study and visit “successful cases” of sovereign wealth funds in other countries and define the best guidelines.

“We have to be an independent entity and ensure we have a place to operate and conditions to operate. And above all, we have to learn a lot about managing and supervising a sovereign fund,” he said.

READ: Mozambique: Civil society questions using the Sovereign Fund to finance State Budget

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On 13 May, the Civic Movement on the SMF considered the government’s intention to use the fund to finance social projects, as provided for in the 2025 State Budget, already approved by parliament, to be illegal.

“This is illegal, a violation, it breaks the law, because the [SMF] law clearly states that money cannot be withdrawn from the sovereign fund at will. The government has to justify why the portion that goes to the Sovereign Fund, corresponding to 40%, is no longer going there. It has to justify this in the document [Economic and Social Plan and State Budget – PESOE 2025],” Fátima Mimbire, coordinator of the Civic Movement on the Sovereign Fund, which brings together civil society organisations, told Lusa.

At stake is 40% of the €69.2 million in revenue from the exploitation of Liquefied Natural Gas (LNG) that Mozambique expects to collect this year, with the percentage for the Fund financing the first 15 projects in 2025.

For Fátima Mimbire, the government has not yet justified, nor is it included in the PESOE, the reason for using the percentage of the FSM to finance social and economic projects: “This is not clear in the PESOE. So, in which document does the government explain that it needs to withdraw this 40% to invest in these areas? Who did it consult, and who did it ask for authorisation to reach this decision?

“We are demanding that the government correct the PESOE and clarify how this issue should be handled, this confusion surrounding the Fund’s revenues, that it is necessary to safeguard the portion that goes to the Sovereign Fund, because it must be emphasised that the Fund does not exist for decoration, but because one of the important macroeconomic variables is savings,” she added, recalling that the fund was also created to meet the country’s needs in times of crisis.

PESOE has defined 15 projects to be financed by the FSM this year, such as maintaining “95% or more coverage of children under one year of age fully vaccinated”, with 416.4 million meticais (€5.7 million), or the allocation of means of production to 468.169 households, with 201.3 million meticais (€2.8 million), and the expansion and rehabilitation of water supply infrastructure, with 679 million meticais (€9.4 million).

The acquisition and distribution of 15,080,550 school books for all primary schools is planned, for 779.5 million meticais (€10.8 million), or the construction of 12 secondary schools “under quality and resilience standards” for 311.6 million meticais (€4.3 million) and 214 primary school classrooms for 225.8 million meticais (€3.1 million), among other things.

Source: Lusa