Opportunity knocks for Mozambique
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Oil major ExxonMobil could this week set a target for a final investment decision (FID) on a planned liquefied natural gas (LNG) project in Mozambique costing up to $33 billion.
This is part of an unprecedented investment boom.
Mozambique is sitting on some of the world’s biggest untapped gas reserves, with companies lining up to develop its LNG sector. In July a final investment decision was reached on a $20 billion project being built by French oil major Total.
With the potential to become a major gas exporter, this should be transformational for the country’s $15bn economy in the coming years.
The big question is whether Mozambique can avoid the ‘resource curse’ – the paradox of economic underdevelopment despite vast revenues associated with many resource-rich African economies.
A high profile debt crisis linked to shady borrowing hangs over the economy – hinting at exactly the kind of poor governance associated with the ‘resource curse’. All eyes are also on presidential elections on October 15, following a peace deal between the ruling Frelimo party and opposition group Renamo aimed at ending a legacy of conflict and instability.
The jury is out on how prepared the country is.
Not in doubt is the scale of the opportunity that has come knocking. Let’s hope Mozambique doesn’t become just another cautionary tale of the ‘resource curse’.
This report reflects the views of the author alone, not those of How we made it in Africa.
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