Mozambique: Rovuma gas to bring “multiple” benefits – Deloitte

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Mozambique: Rovuma gas to bring “multiple” benefits – Deloitte

7:44 CAT | 14 Feb 2017

Voa (File photo)

Mozambique may gain “multiple” benefits from the Rovuma basin gas, a report from the well-known consulting firm Deloitte says, but this will depend on how the government manages the profits of the venture.

The document reveals that the discovery of gas reserves means Mozambique faces “an extraordinary investment opportunity in Africa”, but warns of shortages of skilled labour.

“Despite the current debt problem, the projected boom associated with the development of the gas sector should result in multiple benefits for other sectors in the rest of the economy,” the document says.

Deloitte points out that the Mozambican government has approved an independent external audit of public funds and legislation to reform public companies with the aim of “rationalizing public operations, promoting good governance, improving transparency and reducing fiscal risk”.

Solution for poorly managed public enterprises

“More privatizations and the closure of public companies are foreseen in the short term, given poor public sector governance and growing competition from the private sector,” the consultants say.

Such measures are seen as “progressive for the economy in general, and will provide many opportunities for companies wishing to expand in Mozambique,” the statement said.

The report, which analyzes the economic, political and social situation in Mozambique in depth, warns that investments in the sector will require a skilled workforce, and that “the vast majority of the Mozambican labour force does not have the knowledge required”.

Deloitte says that the socio-economic outlook depends heavily on how the government manages profits when gas projects start producing results in 2020.

The report predicts that the country’s economic growth will return to previous levels, reaching 6.8 percent in 2021 and potentially more than 10 percent per year in the future.

Political and military tension

Regarding the military situation, Deloitte experts consider that “given the lack of military and financial capacity, Renamo is unlikely to be able to sustain continuous attacks”.

“However, the opposition has the capacity to destabilize the center of Mozambique to some extent, possibly frightening off potential investors,” the document warns in conclusion.

Source: Voa Portugues