Gas from Mozambique : between potential and threat - The Point

The exploitation of gas will turn into a real jackpot for the mozambican government. In the medium-term, $ 3 billion per year of tax revenue are expected. This

Gas from Mozambique : between potential and threat - The Point

The exploitation of gas will turn into a real jackpot for the mozambican government. In the medium-term, $ 3 billion per year of tax revenue are expected. This is simply to double the budget of the country. Construction operations, at least ten years, will participate in the economic dynamics of the country. More than 700 000 jobs, of which 15 000 direct, are anticipated. "The country will access quickly to the rank of middle-income countries, whereas today, there are among the poorest in the world," notes the French Treasury and the IMF estimates that from 2023-2024 growth could soar by more than 20% per year.

to attempt To meet the increasing expectations of Mozambican president Filipe Nyusi, elected on 15 October, took advantage of the inauguration ceremony on 15 January, to announce that his government wanted to create a sovereign wealth fund intended to invest in the economy of the countries the revenues coming from the exploitation of its huge gas reserves. "We want to prove that the energy resources can be a blessing, not a curse ", he added according to AFP.

also Read Mozambique : after a poll contested, of the challenges of all orders

Corruption, and debts hidden

there are Some doubts still. While the gas discoveries were made between 2010 and 2013, the transition from exploration to exploitation came to a halt. "Side mozambican State, the process leading to investment decisions has been extremely slow and sometimes chaotic. The reasons are multiple. First, the country was not prepared for such discoveries. Three times poorer than the average african, Mozambique was faced with a dire shortage of executives in oil in the public service, " stresses Benjamin Augé, a researcher at the Ifridans a note on the development of hydrocarbons in East Africa.

To this should be added the problems of corruption and opacity. Ranked among the 25 countries where corruption is highest, according to the ranking of Transparency International, the country's image is tarnished. In April 2016 broke the scandal " of the debt is hidden." Contracted, in any opacity under the previous presidency of Armando Guebuza, in 2013 and 2014, two billion dollars of loans – not reported in the international monetary Fund (IMF) – were used to fund equipment for maritime surveillance, but also the commissions paid to officials in mozambique. The donors are diverted, and the IMF has asked for accounts. Some operators, however, selected as soon as 2015 on bidding for exploration blocks in the offshore sector, could not sign their contracts until 2018, preferred to withdraw.

" The episode of "debts hidden" is not of a nature to optimism in a country where the ruling party, Frelimo, and it dominates the administration and the economy since the country's independence in 1975 ", commented Benjamin Augé. "The caciques of the plan have thus a tendency to manage the business within the bodies of the party and the counter-powers are rather to look for on the civil society side rather than the opposition – Renamo and MDM – often unable to compete with Frelimo ", he continues.

also Read Mozambique : the challenges that await president Filipe Nyusi

Insecurity linked to islamist terrorists...

another threat to the operating gas. Islamic terrorism is a guest in the province gas of Cabo Delgado. The group Ansar Al-Suna, which was founded in 2015, has slid into violence in October 2017, attacking several police stations and killing 17 people. Since then, other islamist groups have emerged. The attacks have multiplied, from one or two per month, about a dozen in 2019, and are closer to the plants under construction. They have caused the death of at least 500 people and the displacement of tens of thousands of Mozambicans, according to a report drawn up in October 2019. The death of a subcontractor to Anadarko in February 2019, in an ambush on the road, has changed the situation. The sites are protected by the army, in return for financial support by companies, and moves are under escort by armoured car.

Read also Northern Mozambique : where the islamists roam

... on the ground of poverty

However, it is unlikely that projects of this magnitude, to be arrested. The oil companies are used to working in especially dangerous areas. On the other hand, insecurity may well add to the cost of construction and operation. The province of Cabo Delgado, neglected by the central State, is also one of the poorest in the country. A poverty that is the bedrock of social tensions and ethnic, and that fuels the islamist threat. The major challenge for Mozambique will be then to use the revenues of the gas to support the development of the region and the country.

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Updated Date: 13 August 2020, 05:33

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