Mozambique Sovereign Fund set up only when State Budget is balanced

30 May 2014

The Mozambican government will only set up a Sovereign Fund when it manages to balance its Budget expenditure and revenues, the country’s Finance Minister, Manuel Chang said Thursday in Maputo.

On the sidelines of the Africa in Ascension conference, organised by the International Monetary Fund (IMF) and the Mozambican government, Chang told Agence France Press AFP) that “we will not do what others have done,” noting that the country needed the funds it is able to raise to build infrastructure, for example.

Saying that setting up the Sovereign Fund was under analysis, the minister added that the country should avoid, “opening up lots of bank accounts where it deposits millions but continue to have no roads and other infrastructure that it needs to develop.”

Mozambique, which is one of the world’s poorest countries, has benefitted from deals involving natural resources concessions, in the coal, oil and natural gas sectors, and has raise over US$1 billion in capital gains tax.

The final destination of future revenues from exploration of those natural resources, such as the world-scale natural gas deposits in the Rovuma basin, by US group Anadarko Petroleum and Italy’s ENI, is also being considered.

The two groups may move ahead either individually or in partnership to build natural gas liquefaction units. This project will cost an estimated US$18 billion and is expected to begin in 2018. (macauhub/MZ)