Following the announcement of the Economic Acceleration Measures Package (PAE) presented by the President of Mozambique last August 9, the Council of Ministers of the Republic of Mozambique appreciated this Tuesday the final draft legislation for the creation of the National Sovereign Fund which will now be submitted to Parliament for final approval.
The final draft establishes that the Government’s revenue from oil and gas will be divided between the Sovereign Wealth Fund and the Country’s National Budget. In the initial 15 years, the proceeds will be distributed at a rate of 40% to the Fund and 60% to the budget, changing to 50% per part thereafter.
During the session, the Council of Ministers incorporated instruments to further reinforce good governance standards with a special focus on transparency and accountability.
The fund will benefit from all the natural gas transactions and its investment strategy will prioritize operations will a strong social economic development impact, particularly the country’s general infrastructure, its health and education system, security, and defense.
In addition to establishing the legal creation of the fund, the draft also defines how the fund will be structured, managed, and operated.
The final draft makes the Ministry of Economy and Finance the entity with overall responsibility for the fund, including the definition of a board of independent finance experts and the preparation of its investment policy. The fund’s operational management will be attributed to a dedicated unit to be created within the structure of Mozambique’s Central Bank.
The Sovereign Wealth Fund to Parliament is part of Mozambique’s Economic Stimulus Acceleration Package (PAE), a set of reforms announced by the Government aiming to place the private sector at the center of economic transformation and development in order to create better conditions to attract investments and create jobs.
