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Mozambique: Renamo wants Sovereign Wealth Fund managed by independent body
11:36 CAT | 21 May 2023
FILE -. For illustration purposes only. [File photo: Lusa]
Mozambique’s main opposition party, Resistência Nacional Moçambicana (Renamo), has criticised the proposal to create a sovereign wealth fund in the country, arguing that it should be managed by an autonomous entity instead of by the central bank [Bank of Mozambique].
The proposed law filed in parliament and awaiting discussion in the chamber, “does not create a mechanism so that the whole of Mozambican society knows where the money is,” deputy leader of the Renamo bench Alfredo Magumisse told a press conference on Wednesday, criticising the fact that it is based on a single account at the Bank of Mozambique.
READ: Mozambique: Government approves draft Sovereign Wealth Fund bill, and other measures – Watch
Renamo wants the draft law to create “an entity that has administrative, financial and patrimonial autonomy,” and to provide information to all about the money deposited in the Mozambican Sovereign Fund. The position had already been advocated by the civic movement for the Sovereign Fund in April, which at the time said it was “problematic that the Bank of Mozambique, over which there are doubts about transparency and which is not directly accountable to parliament, is the manager of the future fund.
On Wednesday, Alfredo Magumisse said that the case of the ‘hidden debts’ of the State is still in the memory of the Mozambicans and that this puts into question the idea of putting the FSM in the hands of a single state entity.
“We remember the hidden debts. The Bank of Mozambique does not represent reliability so that Mozambicans can trust that the money is properly spent on what is intended and be kept for future generations,” he added.
In April, the Centre for Public Integrity (CIP), a Mozambican non-governmental organisation (NGO), had accused the governor of the central bank of “disrespect” for missing a parliamentary hearing on the Sovereign Wealth Fund.
READ: Mozambique: NGO accuses central bank governor of ‘disrespect’
Renamo also argues that the fund should be fed by revenues from the exploitation of all the country’s natural resources, rather than only by gas from the Rovuma basin.
According to the MP, there has already been discussion about these proposals “at the level of parliamentary committees and the leadership of the benches,” but without consensus.
At Wednesday’s press conference, Renamo called on the living forces of society to still put pressure on the government of the Mozambique Liberation Front (Frelimo) to introduce the changes it proposes before the plenary discussion.
The draft law was approved by the Cabinet in November 2022 and foresees that the Sovereign Wealth Fund will be capitalised in the first 15 years with 40% of the revenues from gas and oil, with 60% coming from the state budget.
After the 16th year, the revenues will be equally divided between the fund and the state budget.
Approval of the Sovereign Wealth Fund is one of the targets in the memorandum between the government and the International Monetary Fund (IMF) that underpins the financial assistance programme of US$450 million (roughly the same amount in euros) until 2025.
In 2020, Mozambique expected to receive US$96 billion over the life of the Rovuma gas, almost seven times the annual gross domestic product (GDP), but armed violence in Cabo Delgado has since put major investments on hold.
Of the three liquefied natural gas projects approved for the region, only the smallest (Coral Sul platform, 3.4 million tonnes per year) is active, shrinking forecasts and leaving them uncertain.
The other two projects, about four times larger each, are awaiting decisions from the oil companies.
Source: Lusa
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