Africa-Press – Mozambique. The Foundation for Community Development (FDC), a Mozambican non-governmental organisation, suggested on Friday that ‘part’ of the Sovereign Fund’s allocation to the State Budget should be used to finance projects that guarantee national sustainable development.
‘In the context of the Mozambican Sovereign Fund, we can have a part of the 65% that goes to the State Budget to finance sustainable development actions,’ said the FDC’s advocacy director, Joaquim Oliveira, on the sidelines of a round table that brought together NGOs in Maputo.
The government has concluded all the necessary instruments to make the Mozambican Sovereign Fund operational, which will be financed with revenues from gas exploration projects, the national director of Development Studies and Policies at the Ministry of Economy and Finance, Enilde Sarmento, told Lusa on April 2.
Joaquim Oliveira emphasised that the money from the Sovereign Fund could be crucial for financing small and medium-sized business projects to guarantee sustainable development, which is fundamental for economic growth.
‘We all know that our country has gone through several metamorphoses, we once had the solidarity bank, which lent resources for national issues, we once had the popular development bank, which financed projects, and today we don’t have that,’ he said.
He said that ‘this financing mechanism’ should be geared towards projects that prioritise the development of human capital.
‘We know that there are gaps that we need to fill, such as early childhood development, given that a large percentage of our population is under 18,’ he emphasised.
Joaquim Oliveira also suggested that the money from the Sovereign Fund should benefit projects that present solutions to ‘extreme weather events’, a problem that has plagued Mozambique in recent years.
‘If we don’t invest in food sovereignty and nutrition, we’ll have serious problems too (…). Infrastructure is not enough. We need to invest in institutions,’ he emphasised.
Lusa reported this month that in the first quarter of the year, the state collected $94.2 million (€87.4 million) in revenues from oil and natural gas exploration, which it invested in the new Mozambique Sovereign Fund.
According to data from the economic and social balance of the state budget from January to March, these revenues include $73.37 million (€68 million) from 2023, $20 million (€18.5 million) from the first quarter and $800,000 (€742,000) from 2022.
Mozambique has three development projects approved to exploit the natural gas reserves of the Rovuma basin, classified as one of the largest in the world, off the coast of Cabo Delgado. Two of these projects are larger and involve channelling the gas from the seabed to land, cooling it in a plant to export it by sea in a liquid state.
One is led by TotalEnergies (Area 1 consortium), and work progressed until it was suspended indefinitely after an armed attack on Palma in March 2021. The French energy company declared that it would only resume work when the area was safe.
The other is the still unannounced investment led by ExxonMobil and Eni (Area 4 consortium).
A third completed, smaller project also belongs to the Area 4 consortium and consists of a floating platform for capturing and processing gas for export directly at sea. It started in November 2022.
For More News And Analysis About Mozambique Follow Africa-Press
