Gov’t will create sovereign wealth fund with extractive industry revenues

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Gov’t will create sovereign wealth fund with extractive industry revenues

9:01 CAT | 13 Sep 2019

Picture: @StandardBankMZ

The Minister of Economy and Finance, Adriano Maleiane, said yesterday in Maputo that Mozambique would set up a sovereign wealth fund with revenues from the extractive industry.

“The calculations we are currently undertaking are not about whether or not we will create [a sovereign wealth fund]; it is clear that we will have to,” Adriano Maleiane to a conference sponsored by the British magazine Financial Times (FT) and dedicated to the theme: “Building Resilience for Long-term Growth.”

With the creation of the sovereign wealth fund guaranteed, it next remains to be determined how much money from extractive industry revenues will be channelled into it, plus how much will be set aside for savings and investment.

Consultations over the establishment of an account fuelled by revenues from energy resources, mainly natural gas, are being conducted by the Bank of Mozambique and will be concluded by 2024, Minister Maleiane added.

The Minister of Economy and Finance told the conference that the Mozambican government was intent on diversifying the economy, so that the country could outgrow its dependence on the extractive sector.

“Anything that is transitory [like natural gas] has to be used in a way that doesn’t create any other vices,” he said.

Agriculture, fisheries, tourism and industry should occupy an increasing share of the Mozambican economy, and growth should not rely solely on natural gas.

The Minister of Economy and Finance stressed the importance of investing in technical and vocational education and training, so that the majority of the population, especially young people, would be able to take advantage of the opportunities generated by economic growth driven by development in the extractive sector.

“Poverty will not be combated by distributing income per person, but by creating opportunities for each person to generate their own income,” Maleiane said.

Source: Lusa