In Mozambique, the authorities have just made available to the public the model that the sovereign wealth fund planned to be supplied by the gas windfall could potentially take. It is expected to collect $ 96 billion over the life of natural gas.
On October 12, the Mozambican Central Bank made public the model it proposes for the sovereign wealth fund, which is expected to be supplied to the tune of $ 96 billion by revenues from the marketing of natural gas.
According to the document, the legislator will regulate the fund, which will be managed by the Ministry of Economy and Finance. The Central Bank will process the operations of the fund and implement its investment policy.
In addition, an independent company will be appointed to audit the fund’s accounts each year and the central bank will need to provide quarterly updates to this effect. The authorities mainly predict that during the first two decades of gas production, half of public revenue should go to the fund and the rest to the government budget. Subsequently, 80% will be reserved for the fund.
In addition, when government revenues from natural resources are 10% lower than budgeted, the government may withdraw up to 4% of the previous year’s revenues.
“The fund will build savings and contribute to fiscal stability when commodity prices fluctuate,” says the Bank of Mozambique.
The actual production should start in two years and could make the country the second largest African gas producer ahead of Nigeria and behind Algeria.
Source: Agence Ecofin
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