Mozambique: Syrah Resources targets Balama graphite production restart
Mozambique: Sovereign wealth fund from natural resources not a magic wand – MP
12:17 CAT | 30 Aug 2022
Photo: Notícias
The chairman of the Planning and Budget Commission (CPO) of the Mozambican Parliament on Monday argued that the sovereign wealth fund raised from mega-project revenues should be tailored to governance priorities, warning that the initiative is not a “magic wand”.
Megaproject revenues should not be seen as a magic wand to solve the structural and institutional problems of our country. We have to look at our realities and see the priorities of the governance programmes,” said António Niquice, chairman of the Planning and Budget Commission of the Mozambican parliament.
Deputy Niquice was speaking at the opening of the meeting of the IV High Level Working Group of the Parliamentary Budget Commissions of the Portuguese-Language African Countries (PALOP), which started yesterday in Maputo.
According to António Niquice, the adoption of the sovereign wealth fund should be associated to the priorities of the governance programmes of each state, ensuring that the funds from the exploration of mineral resources are applied to the real needs of the countries.
“Based on international good practices, we have to see to what extent the sovereign funds can help to make a quantitative and qualitative leap in the growth and development we are aiming for,” stressed the Mozambican deputy.
D1 of our Community of Practices for Parliamentary Budget Committees: how parliaments can cope with the challenges related with the oversight of sovereign wealth funds and their financial derivatives.
A picture is worth a thousand words… pic.twitter.com/EHyYSHclzc— ProPALOP-TL SAI (@ProPALOP) August 29, 2022
The Bank of Mozambique is in the process of drawing up a technical proposal for a future sovereign wealth fund, to be supported by revenues from natural resources, mainly natural gas.
The proposal to create a sovereign fund in Mozambique based on revenues from natural resources is due to be approved by the end of the year, announced in July the Minister of Economy and Finance, Max Tonela
The Bank of Mozambique and non-governmental organisations (NGOs) have been arguing that the ideal scenario is for the sovereign fund to be set up before the country starts receiving revenues from the Rovuma LNG project, in time to create technical and institutional capacity to manage natural resources.
The mechanism will also include revenues from reserves of coal, heavy sands, titanium and other minerals with high market value exported by Mozambique.
READ: “Gas exploitation must not start before Sovereign Fund approval”
The creation proposal drafted by the central bank and released in 2020 envisages two objectives, “accumulate savings” and “contribute to the fiscal stabilisation of the country,” with rules of transparency and accountability.
The Bank of Mozambique’s proposal envisages that the country will earn US$96 billion (81.4 billion euros) over the lifetime of the Rovuma gas project, almost seven times the current annual gross domestic product (GDP). But the main exploration projects are still at a halt due to insecurity in Cabo Delgado province.
Of the three approved projects, the one in the open sea, led by the oil company Eni, went ahead, corresponding to a production of 3.4 mtpa (million tonnes per year) of liquefied natural gas, 11% of the total that was planned (the total included another 13.12 mtpa in the Area 1 project in Afungi and another 15 mtpa in the Area 4 Mamba extension).
READ: Government stresses civil society involvement in bill on Sovereign Wealth Fund – AIM
The meeting of the Parliamentary Budget Committees of the PALOP countries runs until Wednesday and, as well as officials and parliamentarians from the Portuguese-Language African countries, is attended by the resident representative of the United Nations Development Programme (UNDP) in Mozambique, Narjess Saidane, and the political adviser to the European Union delegation in Mozambique, Stefan Simosas.
IV High-Level Working Group
Legislative Budget Committees in the Parliaments of PALOP & Timor-Leste (🇦🇴🇨🇻🇬🇼🇲🇿🇸🇹🇹🇱)#Theme: Legislative Oversight of Sovereign Wealth Funds#Date: 29-31 August 2022@ProPALOP @UNDPMozambique 🇺🇳 @EUinMoz 🇪🇺#SDG5 #SDG16 #SDG17#StayTuned pic.twitter.com/jCvuLUhQdb
— UNDP in Mozambique (@UNDPMozambique) August 28, 2022
Source: Lusa
Show comments
Also read
Leave a Reply
Be the First to Comment!
You must be logged in to post a comment.
You must be logged in to post a comment.