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Vol 53 No 9

Published 27th April 2012


Energy bonanza promises real financial independence

Mozambique is on the threshold of a multi-billion dollar energy boom destined to transform a country that, less than 20 years ago, was counted by the World Bank as the world’s poorest, with per capita gross domestic product of US$80. It is still a weak state that lacks capacity to manage such a large range of investment projects and there is concern that resource wealth will facilitate corruption and poor governance. State revenue from these riches promises eventually to deliver something else – revenue independence. This would be a big change for a country highly dependent on foreign aid: grants and concessional loans currently contribute 41% of the national budget

Energy resources lie at the heart of foreign direct investment commitments worth $28 billion. This is more than double 2011’s total gross domestic product of $12 bn. and could rise to $90 bn. over the next ten years if another round of projects under study receives the go-ahead.

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