Maputo — The Mozambican government plans to transfer an average of 2.1 billion meticais (32.9 million dollars, at the current exchange rate) to the country's sovereign wealth fund every year until 2027, according to the Medium Term Fiscal Scenario (CFMP).
"With the implementation of the new Sovereign Fund law, it is planned to allocate an average of 49.4 million dollars to the State Budget during the period of this CFMP. Likewise, 32.9 million dollars, equivalent to 2,102.7 million meticais, will be allocated to the sovereign wealth fund', reads the document.
According to the CFMP for the 2025-2027 period, approved this month by the Council of Ministers (Cabinet), the amount of revenue from Liquefied Natural Gas (LNG) that should be transferred from the Transitional Account to the State Budget, in a given financial year, is set at 60 percent of the projected revenue for that year until 2038, then reduced by 50 percent, with the remainder being channeled to the sovereign wealth fund.
Mozambique has the third largest natural gas reserves in Africa, estimated at 180 trillion cubic feet.
According to the document, gas revenues must fulfill specific objectives, including the support to the State Budget, in line with the National Development Strategy (ENDE), as well as "financing economic and social growth and development in the areas of infrastructure, agriculture, renewable energies and industry.'
The statement points out that, through the sovereign wealth fund, to be managed on the basis of a clearly defined investment policy aimed at maximizing long-term returns and guaranteeing the country's financial security, the resources are expected to be "initially invested in low-risk financial assets.'
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"LNG revenues for the state budget offer the potential for more significant growth, but are also subject to price volatility and fluctuations in global demand', says the document.
In the first quarter of the current year, the state raised 94.2 million dollars in revenues from natural gas.
The law which creates the sovereign wealth fund was approved in December by the Mozambican parliament, the Assembly of the Republic. The deadline for selecting candidates for the nine member Supervisory Committee was set for 30 June.
The composition of the Sovereign Fund Supervisory Committee includes two members from Civil Society Organizations; two representatives from the academic world; two representatives from religious associations of recognized merit, plus one representative from the business community; one representative from the Mozambican Association of Accountants and Auditors, and one representative from the Mozambican Bar Association.
The Committee will control sovereign wealth fund revenues from the production of liquefied natural gas from offshore areas 1 and 4 of the Rovuma Basin, in the northern province of Cabo Delgado.
It will oversee the revenue achieved in the first 15 years of the operation of the sovereign wealth fund, of which 40 percent is earmarked for the fund and 60 percent for the State Budget. It will also control the deposits of revenue in the transitional account.
