Economists recommend caution in Mozambique gas projections

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Economists recommend caution in Mozambique gas projections

3:04 CAT | 15 Feb 2017

AP (File photo)

A recent study by international consulting firm Deloitte indicates that the discovery of huge quantities of natural gas in northern Mozambique means the country represents an extraordinary investment opportunity in Africa.

Some Mozambican economists, however, warn that only transparent contracts and good relations with multinationals will enable Mozambique to enjoy the multiple benefits from the Rovuma basin gas envisaged by some international organizations.

Economist João Mosca says that this will depend on many factors, and points as an example to what is happening in the southern part of the country with South African company Sasol, where, in addition to gas exports being lower than expected, the amount Mozambique receives for these exports is lower than that obtaining in international markets.

Likewise, the company’s investment in infrastructure for the supply of gas to the domestic market is very limited.

Economist António Francisco says that some of the projections may not materialize, as happened, for example, with coal, “because we know that the world market is changing”.

Eduardo Sengo, also an economist, argues that the multiple benefits of gas and other resources must come from policies that facilitate the diversified development of the economy.

“What we must do is transfer the income from highly profitable sectors, especially hydrocarbons, to the less profitable sectors, so that they can develop,” Sengo says.

Source: Voa Portugues