Mozambique: Government Committed to Sovereign Wealth Fund

Maputo — Mueda (Mozambique), 17 Sep (AIM) - Mozambican President Filipe Nyusi on Monday assured an election rally in his home district of Mueda, in the northern province of Cabo Delgado, that his government remains committed to setting up a sovereign wealth fund, despite the clams of critics that it is not interested in such a fund.

Nyusi, who is seeking a second five year term of office, said "we are combining static and dynamic processes. We are thinking about keeping some of the money while investing the rest to produce more money".

He added that the ruling Frelimo Party does not want to follow the example of some countries who opted for a model of a sovereign fund, which was no more than a way of storing money. "When the natural resource ran out, the fund was used and it was quickly exhausted", he said. "We want a fund that can generate more money so that when our natural gas finishes, the country continues to reap benefits".

Nyusi scoffed at those who claim Frelimo is "stealing" from the natural gas industry. "Stealing what, if the gas isn't being exploited yet?" he asked.

Vast reserves of gas have been discovered in the Rovuma Basin, off the Cabo Delgado coast. But the earliest date for the production and export of liquefied natural gas is 2022.

The first thing to be done, Nyusi stressed, is to pass laws to protect the interests of Mozambicans. "We don't want to organise ourselves after the exploitation of the gas has already started", he said.

On the matter of involving local businesses in the gas industry, Mozambique is well advanced, he added - since there are countries which only passed laws on local content many decades after the start of exploitation of natural resources.

In Mocimboa da Praia district, earlier in the day, Nyusi stressed that the gas belongs to all Mozambicans, and that the money resulting from its exploitation must serve the entire country, just as the entire country benefits from the coal mined in Tete province, the electricity generated by the Cahora Bassa dam on the Zambezi, or the prawns caught off the central Mozambican coast.

He said the government hopes to use the money generated by natural gas to diversify the economy, particularly by financing the transformation of agriculture. He wanted to ensure that farmers have easier access to agricultural machinery and to other inputs, and that more dams and irrigation schemes are built.

Nyusi added that Mozambique has learnt from other countries that were dependent on hydrocarbons, and went into crisis when the resources were exhausted or the prices fell. Diversification of the economy would thus be "a strong point" of his government.

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