Mozambique urged to strengthen finances ahead of expected LNG revenue surge

Mozambique must strengthen its financial management systems and diversify its economy before revenues from its expanding liquefied natural gas (LNG) industry increase sharply, a sovereign wealth fund official warned on October 7, pointing to just $252.8mn in cumulative government receipts from Rovuma Basin production between 2022 and 2025.

Estrela Charles, a member of Mozambique's Sovereign Wealth Fund Supervisory Committee, said the country needed stronger institutions and greater investment in productive sectors to ensure future gas revenues translate into broader economic development, AIM reported on October 8.

The $252.8mn figure, previously disclosed in government financial reports, largely reflects production from the Coral Sul floating liquefied natural gas (FLNG) project operated by Italian energy company Eni (BIT: ENI; NYSE: E).

"This figure is quite small compared to what we will receive once full-scale exploitation is underway," Charles said during an economic conference in Maputo.

Coral Sul began production in November 2022 and remains Mozambique's only operational large-scale LNG export project. Several other developments are expected to increase gas production and government receipts substantially over the coming decades.

These include Eni's Coral Norte FLNG project, under construction following an October 2025 final investment decision; TotalEnergies' (EPA: TTE; LSE: TTE; NYSE: TTE) Mozambique LNG venture, where construction activities formally resumed in January 2026; and ExxonMobil's (NYSE: XOM) Rovuma LNG project, which is advancing engineering and procurement work ahead of a final investment decision.

Long-term estimates by Mozambique's petroleum regulator and ExxonMobil put potential government revenues from the three developments at a combined $208bn over their operating lives.

The total comprises approximately $150bn from Rovuma LNG, according to ExxonMobil, and a further $35bn from Mozambique LNG and $23bn from Coral Norte, based on estimates by the petroleum regulator. The separate projections depend on project completion, production volumes, gas prices and fiscal arrangements, and do not represent guaranteed government receipts.

Charles warned that higher gas earnings would not automatically generate economic development, urging greater investment in agriculture, manufacturing, tourism, infrastructure and human capital.

"We cannot eat gas," she said, emphasising the need to develop domestic production of food staples, including rice, maize and cooking oil.

She also raised concerns about Mozambique's capacity to manage a substantial increase in public revenues.

The country's Administrative Tribunal reported that government revenue reached MZN364.5bn ($5.7bn) in 2025, equivalent to 94.5% of the budgeted MZN385.9bn ($6.0bn).

Charles said future annual gas revenues could eventually exceed the government's current annual receipts, highlighting the scale of the potential fiscal transformation. However, the timing and magnitude of such revenues remain uncertain and will depend on the commissioning and profitability of major LNG developments.

Mozambique established the legal framework for its sovereign wealth fund in 2024 to manage petroleum revenues, support fiscal stability and build savings for future generations.

Under the framework, 60% of eligible petroleum revenues are allocated to the national budget and 40% to the fund during its first 15 years of operation. The distribution subsequently shifts to 50% for each.

The allocation applies to qualifying government receipts from petroleum activities rather than the gross value of LNG exports.

University rector Jorge Ferrão also urged responsible management of the country's natural resources, warning against structural dependence on gas revenues.

The development challenge is particularly significant because large LNG projects require substantial upfront investment and can generate significant export earnings without creating employment on the same scale as labour-intensive industries.

Charles argued that Mozambique should use the period before major new gas projects become operational to strengthen public financial management, develop its productive sectors and improve the institutions responsible for managing petroleum income.

The government's ability to channel future revenues into economic diversification, infrastructure and human capital will help determine whether the expansion of the LNG industry produces lasting improvements in living standards.