Maputo, May 13, 2025 (Lusa) - The Civic Movement on the Sovereign Wealth Fund in Mozambique on Tuesday considered the government's intention to use the Fund to finance social projects, as provided for in the 2025 state budget, to be illegal, asking the executive for explanations.
"This is illegal, it's a violation, it hurts the law, because the law [on the Sovereign Fund] already clearly states that you can't withdraw from the sovereign fund at will. The government has to justify why the portion that goes to the Sovereign Fund, corresponding to the 40%, doesn't go any further, it has to justify this in the document [Economic and Social Plan and State Budget - PESOE 2025]," Fátima Mimbire, leader of the Civic Movement on the Sovereign Fund, which brings together civil society organisations, told Lusa.
At stake is the 40% of the €69.2 million in revenues from the exploration of Liquefied Natural Gas (LNG) that Mozambique expects to collect this year, with the percentage for the Fund financing the first 15 projects in 2025, including 12 new secondary schools.
For the Civic Movement, the government has not yet justified, nor is it included in the PESOE, approved on Saturday by the Mozambican parliament, the reason for using the percentage of the Mozambique Sovereign Fund (FSM) to finance social and economic projects.
"It's not clear in the PESOE. So in what document does the government explain that it needs to withdraw this 40% to invest in these areas? Who did it consult, who did it ask for authorisation to reach this decision?" asked Fátima Mimbire.
"We are demanding that the government correct the PESOE and clarify how this issue should be, this confusion linked to the Fund's revenues, that the portion that goes to the Sovereign Fund must be safeguarded, because it must be emphasised that the Fund does not exist for decoration, but because one of the important macroeconomic variables is savings," she added, pointing out that the fund was also created to meet the country's needs in times of crisis.
The PESOE defines projects to be financed this year by the Sovereign Fund, such as the construction of two cold stores for the conservation of products in the Beluluane and Topuito industrial parks, for 45.5 million meticais (€627,500), or the co-financing, with 27.5 million meticais (€380,000), of the completion of the construction of two feed factories in Nampula and Niassa.
There are also plans to produce, distribute and plant 6,674,660 cashew tree seedlings, for 90 million meticais ( €1.2 million), and to keep "the coverage of children under one year fully vaccinated at 95% or more", with 416.4 million meticais ( €5.7 million).
Among the 15 projects to be financed by the Sovereign Fund in 2025, the PESOE states, are the allocation of means of production to 468,169 households, with 201.3 million meticais ( €2.8 million), and the expansion and rehabilitation of water supply infrastructures, worth 679 million meticais ( €9.4 million).
There are also plans to purchase and distribute 15,080,550 school books for all primary schools, worth 779.5 million meticais ( €10.8 million), and to build 12 secondary schools "to the standard of quality and resilience" for 311.6 million meticais ( €4.3 million) and 214 primary school classrooms for 225.8 million meticais ( €3.1 million).
The Sovereign Fund will also purchase and distribute 6,000 school desks, equip five technical vocational education institutes for 287.8 million meticais ( €4 million), build ten dams for 102.1 million meticais ( €1.4 million) and distribute 150 kits to encourage entrepreneurship and the development of small and medium-sized businesses in the industrial, agricultural, services and mining sectors for 137.3 million meticais (€1.9 million).
On 15 December 2023, the Mozambican parliament approved the creation of the Sovereign Fund with revenues from natural gas exploration, which by the 2040s should reach US$6 billion (€5.290 billion) a year.
PME/AYLS // AYLS
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