Good afternoon. Perhaps the saga of Mozambique’s never-fully-delivered school textbooks is coming to an end. The state budget for 2025 includes provision for the distribution of the remaining textbooks, at a cost of MZN779.5m ($12.2m). It is one of a number of items being paid for out of the roughly MZN5bn ($78m) in gas revenues the government forecasts to receive this year. Under the law on the sovereign wealth fund passed last year, 60% of state revenues from liquefied natural gas production, such as taxes and royalties, are directed to the state budget, with the other 40% going to the sovereign wealth fund. (Incidentally, the budget document contains a stupid mistake: the money is described as coming out of the sovereign fund, which led to alarm among some commentators, but government sources have confirmed that that is not the case.)
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The modest size of these revenues and the projects they are being spent on is a reminder that expectations for the sovereign wealth fund need to be managed. At the end of last year, the total amount of money in the fund was $158.8m, not much more than two instalments of the International Monetary Fund’s now-aborted concessional loan to Mozambique. It is true that, when and if the bigger gas projects led by TotalEnergies and ExxonMobil become operational, those revenues and the money going into the fund will increase, but the increase will be very slight for the first decade or so while project debts get paid off, and there is considerable uncertainty about how much will come in in the end. A great deal depends on how interest rates behave and how much demand there is for gas in future decades, as big economies move away from fossil fuels.
