Mozambique’s central bank has received about US$109 million to begin operations of the country’s sovereign wealth fund, marking a key step in managing revenues from its natural gas sector, Governor Rogério Zandamela has revealed.
Speaking to reporters, Zandamela said the funds followed a management agreement signed on November 19 between the finance ministry and the Bank of Mozambique, under which the ministry acts as overall manager of public finances while the central bank serves as the fund’s operational manager.
“The allocation represents a decisive step towards making the fund operational,” Zandamela said, adding that the sovereign wealth fund was created to ensure collective savings and support macroeconomic stability.
The amount includes $33.6 million that had not previously been transferred to Mozambique’s Single Transitional Account for petroleum and gas revenues. The government has set the fund’s initial capital at nearly $110 million.
Under its legal framework, the fund aims to maximise benefits from natural resource revenues, strengthen macroeconomic and budgetary stability, and create a sustainable base for long-term savings and wealth accumulation.
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Revenue for the fund currently comes from liquefied natural gas production in offshore areas one and four of the Rovuma Basin, with additional oil and gas projects expected to contribute in the future.
The Bank of Mozambique will oversee operational management of the fund, including investing its assets on international financial markets.
Background on Mozambique’s reserves
Mozambique holds some of Africa’s largest natural gas reserves, discovered in the Rovuma Basin off its northern coast, raising expectations that LNG exports could transform one of the world’s poorest countries.
However, development of the gas sector has faced repeated delays due to security concerns, financing constraints and global energy market volatility.
The sovereign wealth fund was established to help Mozambique avoid the so-called “resource curse” by smoothing revenue flows, protecting public finances from commodity price swings and ensuring that future generations benefit from gas income.
Authorities say prudent management of LNG revenues will be critical as Mozambique balances debt sustainability, social spending needs and long-term economic development.
