Mozambique, one of the world’s poorest countries, on Friday approved setting up a sovereign wealth fund with billions of dollars of revenues from new natural gas finds and other resources.
Parliament voted by 165 votes to 39 to set up the fund that will be based on more than $91 billion in revenues that the government estimates the country will earn from natural gas in coming decades.
The law lays down that 40 percent of annual resource revenues will go to the Sovereign Fund of Mozambique and 60 percent to the state budget for 15 years. Afterwards there will be a 50-50 split.
Setting up the fund was a key condition of the International Monetary Fund when it approved a $456 credit line for Mozambique last year.
Natural gas exports started one year ago and the government estimates that revenues will peak in the 2040s at more than $6 billion a year.
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The southern African country is also a major producer of coal, aluminium and other resources.
The governing Frelimo party voted for the law while opposition parties voted against, calling for more transparency in the fund’s management.
The law sets up an investment advisory board for the fund and an independent oversight committee made up of civil society, business, academic, and religious representatives.
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The country has seen major financial scandals over the past decade, but Finance Minister Max Tonela vowed efficient management and said it was crucial for the new revenues to take “into account the interests of current and future generations.”
About 170 countries now operate national wealth funds that have become huge international investors. The biggest, Norway’s pension fund, said in September it has about $1.5 trillion in assets.
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Read More: Natural Gas Riches To Fuel Mozambique Sovereign Wealth Fund