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The African Development Bank’s Country Manager for Mozambique, Pietro Toigo, said in an interview that natural resource management will be the most important point in determining what kind of country Mozambique becomes.
“Sustainable management of natural resources will determine the type of country that Mozambique will be,” Toigo said in an interview with Lusa the day after the release of the Country Strategy Paper, the Bank’s most important strategic document on Mozambique, which covers the outlook until 2022.
“The development of the gas sector is expected to transform the country’s economy over the next decade, and some of the key policy decisions will determine the pace and nature of the transformation that will be made in the very near future,” the head of AfDB in Mozambique added.
Asked to name the three most important steps that the government led by Filipe Nyusi should take to boost economic development, Toigo highlighted the sustainable management of natural resources, including increased transparency in revenue management, increased productivity of public spending and, finally, the strengthening of investment in human capital and job qualification.
“Gas gives more opportunities for industrialisation than oil or minerals, because it is a more complex raw material with varying production processes, so Mozambique has two strategic choices on how to develop the sector,” he said, pointing out that the country could bet on exports and seek to maximise tax revenues from producers, or develop local value chains that broaden the tax base and reduce exposure to international price volatility.
“Increasing transparency in the management of gas revenues will also be extremely important to managing citizens’ expectations,” he added, advocating the publicising of contracts.
“I am personally convinced that, as a rule, publishing all contracts and concessions in the extractive industry would strengthen the Government’s assets with extractive companies and improve governance in the sector,” the Italian responsible for the ADB in Mozambique said.
The other set of measures that the country should take to boost economic development involves improving the productivity of public spending and increasing investment in human capital via the State Budget.
As a large part of public resources goes to public wages and operating costs of public enterprises, little is left for infrastructure investment, and it is important to redirect public resources to investments that can generate future growth and be used by future generations, Toigo advocated , arguing that it was necessary “to increase the ability to select and prioritise public investment projects through a rigorous analysis of development impact and cost maximisation”.
Finally, Toigo addressed the need to deepen investment in human capital and training, “and especially to ensure that school curricula are geared towards the training that the private sector demands, which will be essential to equip young Mozambicans with the tools to enable them to leverage the gas-based economic growth”.
- You may access the full AfDB Country Strategy Paper, in English, HERE