An African Qatar?
Mozambique could become just as dependent on energy exports but in a very different way. While the Angolan government has sought to maintain state control of the economy, Maputo has actively tried to attract foreign, private sector investment. Yet despite the strong growth of the past 20 years, the economy began from a very low base and so the government is still dependent on donor funding.
A generally well-managed country should now benefit from two new sources of revenue. Huge reserves of coal have been found in remote Tete Province in the northwest of the country, while similarly massive natural gas reserves have been identified off the country’s north coast. It is even possible that Mozambique will join Qatar and Australia as one of the three biggest LNG producers in the world. Providing these revenues are well managed, they can provide substantial benefits for what is still a very poor country, not just through government revenue but also in the form of new infrastructure.
A small proportion of the coal and gas will be consumed within the country, mainly by thermal power plants, while billions of dollars is being invested in new road, rail and port capacity that could benefit the wider economy. Indeed, while Angola and Mozambique have very different economies, both are looking to rail and port infrastructure to transform their economies.
There has been one unnerving recent development in Mozambique. Renamo had largely been a political force since the end of the civil war in 1992. However, it appears to have returned to armed conflict to gain some political leverage. The imminent arrival of gas and coal revenues may have much to do with this but it may also be connected to the upcoming Presidential elections.