As substantial investments to explore Mozambique’s vast natural gas reserves begin in earnest next year, the country is poised to become a significant exporter of liquefied natural gas (LNG).

“LNG can be a game changer for economic transformation, development and inclusive growth, potentially lifting millions out of poverty if the right policies are put in place,” said International Monetary Fund (IMF) Africa director Abebe Selassie.

However, he explained during the Mozefo conference, in Maputo, last week that the country still needed to improve on a few policy aspects before optimum benefit from major LNG exports could be realised.

“First, government needs to follow through on its commitment to strengthen the governance framework, enhance transparency and fight corruption, for which the Diagnostic Report on Transparency, Governance, Corruption, published in August, provided a helpful roadmap for reform.

“Second, while more significant fiscal revenues derived from LNG production are only expected towards the end of the 2020s, it is critical for Mozambicans to reflect ahead of time on the right institutional framework to manage the forthcoming LNG wealth,” Selassie pointed out.

He suggested that a credible medium-term fiscal framework with fiscal rules to guide policies on public investment and savings, together with a sovereign wealth fund, could help share the wealth among all.

“A strong and unwavering commitment to sound economic policies and structural reforms, particularly those aimed at strengthening governance, transparency and the fight against corruption, will be critical to transforming the Mozambique economy and making it work for all Mozambicans.”

The IMF reiterated its commitment to working closely with the Mozambique government to help develop policy and provide technical assistance and training to achieve macroeconomic stability and growth.