The Mozambique Sovereign Fund (FSM), the state entity that will be responsible for managing the revenues from natural gas from the Rovuma basin in Cabo Delgado province, is still inoperative.

Created a year ago by Law No. 1/2024, of January 9, the Sovereign Fund is still in a "water bath" due to the failure to sign the Management Agreement between the government and the Bank of Mozambique (BdM), the entity that will manage the "vault of natural gas revenues".

The information was provided by Letter from Mozambique in its edition of last Thursday (23), pointing out that the government initially expected to make the Sovereign Fund operational by the end of April 2024, but the terms of reference of the Management Agreement were only concluded last December, when Filipe Nyusi's government left office.

According to article 26 of Law no. 1/2024, of January 9, the Management Agreement must provide for: the priority sectors for the Sovereign Fund's investments, as set out in the Investment Policy; the risk management standards and internal controls for the fund's management to be observed by the BdM; and the central bank's liabilities for damages and losses arising from the fund's operations, in cases of negligence or fraud in the entity's management.

The Sovereign Fund Management Agreement will be signed by the Minister of Finance, representing the government, with the governor of the central bank and should be made public, as should the entity's management reports. The Investment Policy, a guiding instrument on how the money from the Sovereign Fund should be invested, was approved last December by the government, but has not yet been made public.

So far, only the Supervisory Committee (elected by the Assembly of the Republic), an independent body of the Sovereign Wealth Fund with the power to control and monitor matters relating to the entity's income, is duly installed, as its members have already taken office. In turn, the Investment Advisory Board, a body whose mission is to assess the fund's investment opportunities in different asset classes, has its team in place, but has not yet taken office.

(Photo DR)