Mozambique: Civic coalition wants SWF to go to structural investment – Watch

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Mozambique: Civic coalition wants SWF to go to structural investment – Watch

2:49 CAT | 04 Nov 2020

Image: IMD

The Civic Coalition for the Sovereign Fund, a group of Mozambican civil society organisations, urged in Maputo on Tuesday the investment of revenues from the exploitation of natural resources in “structuring infrastructure”, mainly in education and health.

The Coalition outlined its financing priorities for the future Mozambican sovereign wealth fund during a round table on the “Analysis of the proposed sovereign wealth model for Mozambique” promoted by the Institute for Multiparty Democracy (IMD).

“It is necessary to think about structuring infrastructure in the health and education sectors, for which revenues from natural resources would finance a development plan,” the Coalition’s Fátima Mimbire said.

The Mozambican state must use revenue from natural resources such as natural gas to reduce or eliminate the prevailing deficit in social infrastructure in the country. “We have very negative ratios in the social areas, which need to be corrected, and the revenues from natural resources can be directed to that end,” Mimbire stressed.

Economist João Paulino urged independent and transparent management of the future sovereign wealth fund, noting that the management of natural resource revenues should not be the purview of the political class.

“We know the process of building and approving our State Budget is dominated by the ruling party, and this model must not continue, because transparency will be undermined,” Paulino emphasised.

The lack of an influential role for civil society in the management of natural resources would pave the way for the ruling party, with its majority in parliament, to exercise a decision-making monopoly over the sovereign wealth fund, he noted.

Constitutional amendment?

Arsenio Lampião, an expert in oil and gas law, advocated the enshrining of the sovereign wealth fund in the Constitution of the Republic as a guarantee of protection against political influence.

“The establishment of a sovereign wealth fund embodies the fundamental principle of permanent sovereignty of the people over the country’s resources, so it must have constitutional underpinning,” Lampião said.

During the discussions, the Bank of Mozambique guaranteed that the future sovereign wealth fund would, in the pursuit of transparency and accountability, be directly supervised by the Assembly of the Republic and be subject to independent audits.

“In the [technical] proposal, we opened space for the Assembly of the Republic to create, if it so wishes, a body to directly supervise the overall management of the fund,” Bank of Mozambique director Jamal Omar said.

Under the central bank’s proposal, parliament would also have to approve the entire legal apparatus, moving away from a regulatory framework defined at governmental level.

The fund, Omar continued, would also be subject to audit by an independent entity to be designated by the Ministry of Economy and Finance, as well as by the Administrative Court, whose reports would both be submitted to parliament.

Source: Lusa