The Planning and Budget Commission of the Assembly of the Republic of Mozambique defended this Monday that the sovereign wealth fund from the income of megaprojects must be adapted to governance priorities, warning that the initiative is not a “magic wand”.
The income from megaprojects should not be seen as a magic wand to solve the structural and institutional problems of our countries. We have to look at our realities and see the priorities of the governance programs”, declared António Nequice, president of the Planning and Budget Commission of the Mozambican parliament.
The Mozambican deputy was speaking during the opening of the meeting of the IV High-Level Working Group of the Parliamentary Budget Committees of the Portuguese-Speaking African Countries (PALOP), which has been taking place since Monday in Maputo.
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For António Nequice, the adoption of the sovereign fund must be associated with the priorities of the governance programs of each State, ensuring that the funds from the exploitation of mineral resources are applied to the real needs of the countries.
Based on good international practices, we have to see to what extent sovereign wealth funds can help make a quantitative and qualitative leap in the growth and development that we aspire to”, stressed the Mozambican deputy.
The Bank of Mozambique is in the process of preparing a technical proposal for a future sovereign wealth fund, which will be backed by revenues from natural resources, mainly natural gas.
The proposal to create a sovereign wealth fund in Mozambique based on revenues from natural resources must be approved before the end of the year, Economy and Finance Minister Max Tonela announced in July.
The Bank of Mozambique and non-governmental organizations (NGOs) have defended the ideal scenario that the a sovereign wealth fund is established before the country starts receiving income from Rovumain time to build technical and institutional capacity in natural resource management.
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The mechanism will also depend on income from reserves of coal, heavy sands, titanium and other minerals with high market value exported by Mozambique.
The creation proposal drawn up by the central bank and published in 2020 foresees two objectives, “accumulate savings” Y “contribute to the fiscal stabilization of the country”with rules of transparency and accountability.
The Bank of Mozambique proposal expects the country to raise US$96 billion (81.4 billion euros) in the useful life of Rovuma gas, almost seven times the current Gross Domestic Product (GDP), but the main exploration projects continue to be paralyzed by insecurity in the province of Cabo Delgado.
Of the three projects approved, the offshore project advanced, led by the oil company Eni, corresponding to a production of 3.4mtpa (millions of tons per year) of liquefied natural gas, eleven% of the forecasted total (total included more 13.12mtpa in the Area 1 project in Afungi and others 15mtpa in the Mamba extent of Area 4).
The meeting of the PALOP Parliamentary Budget Committees will take place until Wednesday and, in addition to cadres and parliamentarians from Portuguese-speaking African countries, will include the participation of the resident representative of the United Nations Development Program in Mozambique, Narjess Saidane, and the political adviser of the European Union delegation in Mozambique, Stefan Siosas.
Source: Observadora
