On Tuesday (12), the government approved, in the Council of Ministers, the regulations for the Mozambique Sovereign Fund (FSM), the implementation of which will begin next month. It is a regulation that materializes the Law creating the FSM, approved last December by the Assembly of the Republic (AR).

"Our expectation is that all the work on creating instruments to make the Fund viable will be completed by the end of this month (March) and we can say that by the end of March, beginning of April, the Sovereign Fund will be up and running," announced the Deputy Minister of Economy and Finance, Amílcar Tivane, after the ordinary session of the Council of Ministers in Maputo.

According to the government official, quoted by AIMThe Fund establishes guidelines for the governance and articulation of the bodies that make up its management.

On the occasion, Amilcar Tivane stressed that the regulation also defines the procedures for ensuring the transparency of resources associated with the exploitation of liquefied natural gas, and revenues from the country's existing megaprojects, as well as future oil projects.

The regulation sets the resulting revenue at 60% to be injected directly into the State Budget (OE) and 40% into the WSF account for the first 15 years. And from the 16th year onwards, it should be shared equally.

"It's important to note that the regulation clarifies or specifies under what circumstances the transfer from the Sovereign Fund account to the State Budget is authorized, specifically in the event of a public calamity, and also situations in which a State of Siege is declared for any reason," said Tivane.

According to the deputy minister, the transparency mechanism for the FSM's OE account "tries to ensure that the capital that will be invested in different asset classes is not squandered", but that over time withdrawals can be made to make up for differences between actual revenue and the expectation that it will be channeled to the OE.

The regulation makes room for the creation of the Investment Advisory Committee, approval of the investment policy, and the management agreement that will provide guidelines for the Central Bank.

It should be noted that the Mozambican government proposed the creation of the Sovereign Fund as a strategy to efficiently manage and channel the revenues from natural gas exploration.

The Fund will ensure that revenues from the exploitation of natural gas are used in a sustainable way to boost long-term economic development.