Mozambique is practically a "rich country". That's because according to consulting firm WoodMackenzie, a leading energy specialist, Mozambique's gas production could surpass Nigeria, the largest producer in sub-Saharan Africa, within a decade.  

In a report on the gas sector in sub-Saharan Africa, released at the time of the Africa Oil WeekAnalysts said that "Mozambique's liquefied natural gas production could overtake Nigeria later in the 2020s.

According to these analysts Mozambique has "virtually unlimited resources that will benefit the government if it leverages export revenues and at the same time ensures that local markets are well supplied."

WoodMackenzie analysts recall that Mozambique has been selling gas to South Africa since 2004 and supplying a small domestic market since 2012, but it has definitely moved to the top of investors' radar since 2010, when major discoveries were made on the north coast that will turn the country into one of the world's leading exporters, alongside Qatar.

Forecasts by the International Monetary Fund (IMF) indicate that the province of Cabo Delgado has gas reserves in the Indian Ocean that by 2024 should more than double Mozambique's wealth.

In the recent past, France's Total has invested $25 billion in the project in this region, which is being affected by the armed insurgency that has already claimed more than a thousand lives and threatens to delay production of the infrastructure necessary to ensure the production and export of natural gas.

This is the largest private investment to date, and represents more than Mozambique's entire GDP. In general, analysts say, sub-Saharan Africa suffers from a lack of "reliable and affordable" energy, where gas could play a key role, but lack of investment in infrastructure, high costs, logistical difficulties, and the low financial capacity of consumers have been the main barriers to investment in this sector, along with volatile regulatory frameworks and inadequate governance.

"Appropriate laws, transparent process, and attractiveness for consumers and investors" were, in fact, the answers that several experts presented at the report's launch session.

For gas to be a catalyst for development, Woodmackenzie's report recommends the creation of a law to regulate the energy sector, not only on the issue of price, but also on the issue of counterparts, taxes, tax incentives, and risk and profit sharing in investments, in addition to the issue of local content, which is increasingly important for raw material exporting countries.

Source: MA