Large projects in Mozambique should fund sustainable development, former prime minister says

24 August 2012

Mozambique’s former prime minister, Luísa Diogo, said in a long interview with a Mozambican weekly newspaper that it was time the government renegotiated the conditions of large projects, most of which are for exploration of natural resources.

Several large projects, such as aluminium foundry Mozal and Kenmare Resource’s Moma heavy sands project are currently in operation in Mozambique. The large projects also include natural gas extraction by South Africa’s Sasol in Inhambane province, and coal mining in Moatize, Tete province, by Brazilian group Vale and Anglo-Australian group Rio Tinto.

Luísa Diogo, a member of the political commission of Frelimo, the political party that has been in power in Mozambique since the country’s independence in 1975, noted that the various stages in the economic life of a country determined that different policies be adopted by governments on certain issues and added that, “these policies are implemented in line with the reality faced at each given time.”

“Investors that invested in 1988 or 1990 were treated differently to those who did so in 2000 or are doing so in 2012,” the former prime minister said.

Recently Finance Minister Manuel Chang said that the government was facing the challenge of ensuring that the country’s mining resources, including oil and gas, contributed to the country’s development by re-distributing wealth.

“Natural resources, such as minerals and oil, as well as gas, are not renewable, and so it is essential to diversify the economy in order to ensure a wider economic base for sustainable development,” said the minister adding, “so it is necessary to maximise public revenues via taxes and other charges on those activities.”

The Mozambican Tax Authority announced a few days ago that large projects and large taxpayers would become responsible for 70 percent of total tax revenues beginning in 2014. (macauhub)