A Boom for Whom? Mozambique’s Natural Gas and …...AbStrAct In the two decades since the end of Mozambique’s civil war the country has depended heavily on international donors

South African Instit

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African perspectives. Global insights.

Governance of Africa's Resources Programme

O C C A S I O N A L P A P E R N O 1 5 1

A Boom for Whom? Mozambique’s Natural Gas and the New Development Opportunity

I c h u m i l e G q a d a

A u g u s t 2 0 1 3

A b o u t S A I I A

The South African Institute of International Affairs (SAIIA) has a long and proud record

as South Africa’s premier research institute on international issues. It is an independent,

non-government think tank whose key strategic objectives are to make effective input into

public policy, and to encourage wider and more informed debate on international affairs

with particular emphasis on African issues and concerns. It is both a centre for research

excellence and a home for stimulating public engagement. SAIIA’s occasional papers

present topical, incisive analyses, offering a variety of perspectives on key policy issues in

Africa and beyond. Core public policy research themes covered by SAIIA include good

governance and democracy; economic policymaking; international security and peace;

and new global challenges such as food security, global governance reform and the

environment. Please consult our website www.saiia.org.za for further information about

SAIIA’s work.

A b o u t t h e G o v e r n A n c e o f A f r I c A ’ S r e S o u r c e S P r o G r A m m e

The Governance of Africa’s Resources Programme (GARP) of the South African Institute

of International Affairs (SAIIA) is funded by the Norwegian Ministry of Foreign Affairs. The

programme contributes to policy governing the exploitation and extraction of Africa’s

natural resources by assessing existing governance regimes and suggesting alternatives

to targeted stakeholders. GARP examines the governance of a number of resource-rich

African countries within the context of cross-cutting themes such as environmental change

and sustainability. Addressing these elements is critical for Africa to avoid deepening the

challenges of governance and reducing its vulnerability to related crises, including climate

change, energy security and environmental degradation. The programme focuses on the

mining, forestry, fisheries and petroleum sectors in select African countries.

Programme head: Oladiran Bello, [email protected]

© SAIIA August 2013

All rights are reserved. No part of this publication may be reproduced or utilised in any form by any

means, electronic or mechanical, including photocopying and recording, or by any information or

storage and retrieval system, without permission in writing from the publisher. Opinions expressed are

the responsibility of the individual authors and not of SAIIA.

Please note that all currencies are in US$ unless otherwise indicated.

A b S t r A c t

In the two decades since the end of Mozambique’s civil war the country has depended

heavily on international donors to fund its development. Although the economy grew at

record rates from the mid-1990s, poverty levels remain above 50%. Mozambique has now

discovered natural gas deposits in large commercial quantities. These discoveries could

contribute billions of dollars to the economy and catapult Mozambique into place as the

world’s third largest exporter of LNG.

This paper investigates the likely impact on Mozambique’s socio-economic development

of discoveries of natural gas deposits, and of industrial development in the natural gas

sector. It analyses the likely uses of the ‘gas boom’ by government in contributing to the

improvement of the economic situation of Mozambicans. The discussion is set within the

context of Mozambique’s political and economic development since gaining independence

in 1975.

Whether or not the new opportunity will translate into real benefit for Mozambicans in

general depends on a number of critical factors: This report looks at those issues against the

background of the need for development in Mozambique and concludes that, although

natural gas presents a great opportunity for development and the government appears to

be committed to using the resource to improve the lives of Mozambicans, much work lies

ahead. Translating Mozambique’s natural resource wealth into developmental outcomes

will require commitment from all stakeholders, especially the government, civil society and

the private sector.

A b o u t t h e A u t h o r

Ichumile Gqada holds a Master of Social Science degree in Global Studies from the

University of Cape Town. A former researcher with the SAIIA Governance of Africa’s

Resources Programme, she currently works at the Petroleum Oil and Gas Corporation of

South Sfrica (PetroSA), where her research centres on the global hydrocarbons sector, with

particular focus on natural gas.

4

S A I I A O C C A S I O N A L P A P E R N U M B E R 151

G O v E R N A N C E O f A f R I C A ’ S R E S O U R C E S P R O G R A M M E

A b b r e v I A t I o n S A n d A c r o n y m S

CSR corporatesocialresponsibility

EITI ExtractiveIndustriesTransparencyInitiative

ENH EmpresaNacionaldeHidrocarbonetosdeMoçambique

FDI foreigndirectinvestment

Frelimo FrontfortheLiberationofMozambique(FrentedeLibertaçãodeMoçambique)

G-19 Groupof19aiddonorcountries,alsoProgrammeAidPartners

GBS generalbudgetsupport

GDP grossdomesticproduct

GoM GovernmentofMozambique

IEA InternationalEnergyAgency

IMF InternationalMonetaryFund

LNG liquefiednaturalgas

MDGs MillenniumDevelopmentGoals

MDM MovementforDemocraticChange(MovimentoDemocraticoMoçambique)

MGJ/a milliongigajoulesofgasayear

MW megawatt

NPI NationalPetroleumInstitute

OECD OrganisationforEconomicCo-operationandDevelopment

Parpa ActionPlanfortheReductionofAbsolutePoverty(PlanodeAcçãoparaa

ReduçãodaPobrezaAbsoluta).

PAP ProgrammeAidPartners(SeeG-19)

PRSP PovertyReductionStrategyPaper

Renamo MozambicanNationalResistance(ResistênciaNacionalMoçambicana)

SAP structuraladjustmentprogramme

SPF SocialProjectFund

TCF trillioncubicfeet

UNDP UNDevelopmentProgramme

WWF WorldWildlifeFund

M O Z A M B I Q U E ’ S N AT U R A L G A S & T H E N E W D E v E L O P M E N T O P P O R T U N I T Y

5


I n t r o d u c t I o n

Since2010thegovernmentofMozambique(GoM),alongwithinternationalcompanies

involvedinhydrocarbonsprospecting,hasmadeaseriesofannouncementsofnatural

gasdiscoveries.Currently,estimatesfromtwoofthefiveexplorationblocksinCabo

DelgadoProvince,whereMozambiquemeetsTanzania,indicatethatthecountrypossesses

wellover100trillioncubicfeet(tcf)ofnaturalgas.1Theseannouncementshavegiven

risetomuchexcitement;‘ordinary’Mozambicansarehopingforimprovementsintheir

livingconditions,whiletheirgovernment is lookingforwardtobillionsofdollars in

exportrevenuesandforeigndirectinvestment(FDI).Governmentdepartmentsinvolved

inthegassectorhavemaderepeatedstatementsoftheirintentiontousethesefundsfor

nationaldevelopment.2Alongwiththiscommitmentthegovernmenthastakenstepsto

improvetheregulatoryenvironmentforhydrocarbons,includinggas,throughareview

ofPetroleumLaw3/2001of21February.ItalsocommissionedaNaturalGasMaster

PlanforMozambique(the‘MasterPlan’)thatwilloutlinescenariosforutilisationofthe

resourceonceproductionstartsin2018.3Earlyindicationsarethatthegovernmentis

consideringtwooptionsforthegas.Thefirstistosellallofitinliquefiedformonthe

internationalmarket,andthesecondistouseaportionoftheresourcefordomestic

gas-basedindustries,andexporttherest.Akeypolicyquestionishowtooptimisethe

balancebetweenthetwo,tomeetthetwinobjectivesofeconomicgrowthandsustainable

development.

Theargumentforgeneraldevelopmentofthegassectorhingesonthebeliefthatit

willbringinforeignrevenues,createjobsandboosteconomicgrowth.4GoMconsiders

thatthesebenefitswillinturncontributetopovertyalleviation,oneofMozambique’s

keypriorities.Although the logicof this isunderstandable, given thecountry’s low

socio-economicstatus,experience inmanyresource-richAfricancountriespoints to

thefactthatnaturalresourcewealthdoesnotper setranslateintoeconomicandhuman

improvement.CountriessuchasNigeria,SierraLeoneandtheDemocraticRepublicof

Congo,whichhaveabundantnaturalresources,havebeenlessthansuccessfulinusing

theirendowmentstomakethetransitionfromlow-tomiddle-incomeeconomies,orto

reachacceptabledevelopmentalindices.5

Pitfallsattendingresourceextractionhavebeenwidelydocumented.Thephenomenon

ofresourceabundanceexistingalongsidepooreconomicindicators,alsoknownasthe

‘resourcecurse’,threatenstoovershadowthehopesandpossibilitiesthatcomewithlarge

resourcediscoveries.Exportofasinglecommodity,particularlypetroleum,frequently

crowds out other economic sectors and strengthens the national currency, while

havingaconcomitantinflationaryeffectonothernon-resourceexportcommodities(a

phenomenonknownasthe‘Dutchdisease’).Thissituationrendersthenationaleconomy

overlyreliantonnaturalresourceexports,whichinturnincreasesitsvulnerabilityto

externalshocks.6Muchoftheliteratureontheresourcecursehasfocusedonoil,largely

duetoitsdominanceinthefossilfuelsindustry,anditispossiblethatthetheorymay

notnecessarilyfunctioninexactlythesamemannerwhendealingwithgas.Thiscaveat

notwithstanding,arangeofchallengesassociatedwithresourcediscoveriesandbooms

hasbeenwidelyventilated.Thereisaconvergenceofopinionthatsoundeconomicpolicy

andlaw-making,apoliticalwillandgovernmentalcommitmenttodevelopment,and

goodandtransparentgovernanceofthepetroleumsector,candomuchtoensurethatthe

6



exploitationofpetroleumresourcesleadstobroadereconomicandsocialdevelopmentin

thefaceofchallengesthatinthecaseofMozambiqueamongothersincludepoverty,poor

accesstoenergy,limitedinfrastructure,unemploymentandanunskilledworkforce.

Inthepasttwodecadesgashasemergedasamajorcomponentintheglobalenergy

mix.Itisincreasinglyseenasanattractivefossilfuelalternativetocrudeoilandcoal,

becauseitiscleanerburningthaneitherandsufficientlyversatiletobeusedasdirect

domesticandindustrialheatingandpowergeneration;asadirectfuelsourceforvehicles;

andasindustrialfeedstockforliquidfuelsandotherchemicalproducts.Accordingto

theInternationalEnergyAgency(IEA)naturalgas is ‘poisedtoenteragoldenage’.7

Asignificantproportionofthecominggasboomwillbefromunconventionalresources

suchasshalegasandcoal-bedmethane,providedthat thesocialandenvironmental

impactsassociatedwiththeirextractioncanbeameliorated.By2035gaswillovertake

coalasaprimaryenergysource,tocomprise25%oftheglobalenergymix–secondonly

tocrudeoil.8Similarly,ithasbeenarguedthat‘gasistheonlyfossilfuelsettoincreaseits

shareofenergydemandintheyearstocome’.9Whereasthegasboomreliesprimarilyon

unconventionalgas,conventionalgasresourcessuchasthoseinnorthernMozambique

certainly have a role to play. Currently, successive discoveries of conventional and

unconventionalgasresourcessuggestarevolutionintheglobalenergyindustrymaybeat

hand.Whatthiswillmeanforgovernmentsandnationaleconomicdevelopmentdepends

onthegovernancemechanismsandmanagementsystemsputinplacetoensurethatthe

resourceistransformedintotangiblesocialbenefit.

WhetherGoMwillbeable tokeep to itsobjectiveofusinggas fordevelopment,

eitherthroughrevenuesfromexportsorthecreationofdomesticgas-basedindustries

oracombinationofboth,largelydependsonthewayinwhichthesectorisgoverned.

Itistooearlytostatewithanycertaintythattheexploitationofthisfiniteresourcewill

benefitthemajorityofMozambicans.Giventheadoptionandimplementationofsound

governancepolicies,however,togetherwithcompetentandtransparentadministrative

processes,effective,functionalandindependentoversightinstitutionsandacommitment

todirectingprofitstowardsocio-economicdevelopment,GoMcangosomewaytoavoid

theresourcecurseanditsconsequenceswhileadvancingitsstateddevelopmentalgoals.

ThispapersetsouttoconsidertheimplicationsofthegasdiscoveriesforMozambique’s

socio-economicdevelopment.ItexaminestheextenttowhichGoMhasconceptualised

andunderstooddevelopmentsincetheendofthecivilwarin1992,inordertosuggest

howitmightfacilitate futuredevelopment inthepetroleumsectorandtheeconomy

ingeneral. Indoingso itdrawson field researchconducted inMozambique,policy

documents,internationalbestpracticeguidesandexistingliteratureonvariousaspectsof

Mozambique’sdevelopment.

b A c K G r o u n d

The11provincesand128districts thatmakeupMozambique liebehindtheIndian

Oceancoastlineof south-easternAfrica.The country sharesborderswithTanzania,

Malawi,Zambia,Zimbabwe,SouthAfricaandSwazilandandcoversasurfaceareaof

799 390km2,ofwhich786 390km2and13 000km2arerespectively firm landand

inlandwaters.Itscoastlineruns2 700kmfromnorthtosouth,andthecountry’sclimate


7


rangesfromtropicaltosubtropical.Mozambique’scoastalpositiongivesitageographical

advantageoveritsinlandneighbours,whichuseitsportsasentryandexitpointsfor

theirinternationaltraffic.Thenationalcapital,Maputo,isinMaputoProvince,alongthe

southernmosttipofthecountryandborderingSouthAfricaandSwaziland.Thegreat

majorityofthecountry’s24millioninhabitantsareruraldwellers,morethan50%ofthem

livingbelowthe$1.25adaypovertyline.TheofficiallanguageisPortuguese,although

Englishisusedextensivelyasthebusinesslanguageinthemaincities.Amongthemany

otherlanguagesspokenareMakhuwa,Ndau,Tsonga,LomweandSena.10

MozambiquegainedindependencefromPortugal in1975.Sincethenthecountry

hasbeengovernedbyFrelimo,theFrentedeLibertaçãodeMoçambique(Frontforthe

LiberationofMozambique).Mozambiquehashadamulti-partydemocraticpolitical

systemsince1990andheldfourroundsofgeneralelectionsbetween1994and2009and

threeroundsofmunicipalelectionsbetween1998and2008.Themainoppositionparty

isRenamo,theResistênciaNacionalMoçambicana(MozambicanNationalResistance),

although the newly-formed MDM, the Movimento Democrático de Moçambique

(DemocraticMovementofMozambique)isgrowinginnumbersandholdsthemayoral

seatsinBeira,SofalaProvinceandQuelimane,ZambeziaProvince.

Mozambique’s economy includes services sectors (taking in transport), some

manufacturing,fisheriesandagricultureaswellaselectricityexportstoneighbouring

countries,includingSouthAfrica.Donoraidisthesinglebiggestcontributortothenational

budget,ataround50%in2010.11Thecontributionofextractiveindustriestothefiscus

is,however,growingrapidly.AccordingtoMinisterofMineralResources,EsperançaBias,

in2011grossdomesticproduct(GDP)increasedto$13,740billionfrom$10,420billion

thepreviousyear12.Althoughthevalueofexportsbegantodeclinefrom2010,in2011

theeconomygrewatanannualrateof7.2%,upfrom6.8%in201013.Inrecentyearsthe

countryhasemergedasaresourcehaven.Inadditiontorichdepositsofcoalandnatural

gasMozambiquehassignificantdepositsofheavymineralsands;limestone;bauxite;rare

earths;graphite;goldandbaseminerals,amongothers.Dependinguponhowtheyare

managed,suchnaturalresourcescouldliftMozambiqueintomiddle-incomestatus.

Gashasbeendiscoveredintwoareas:theRovumaBasinoffthecoastofCaboDelgado

Province,and theMozambiqueBasin,anon-andoffshoreareaspanning thecoastal

provincesofInhambaneandSofala(seeFigure1).Currently,gasisbeingproduced(by

theSouthAfricanintegratedenergyandchemicalscompanySasolLtd)onlyatthePande

andTemanefieldsinInhambaneProvincebutplansareunderwayforproductioninthe

RovumaBasintobeginby2018.

Preliminaryindicationspointtothepossibilitythatgasdevelopmentandproduction

mightadverselyaffectothereconomicsectors.CaboDelgado,forexample,isatourist

destinationandecologicalhubandthelocationoftheprotectedQuirimbasNationalPark.

ArepresentativeoftheWorldWildlifeFund(WWF)inMaputobelievestherichecology

anditsattendanttourist trademaybenegativelyaffectedbygasproductionplanned

forthearea.14TheinternationalenvironmentalnetworkFriendsoftheEarthaffiliate,

JustiçaAmbiental,conductedfieldresearchintheRovumaBasinin2009.Thestudycites

compellingevidencethatseismicstudies(usedinpreliminaryinvestigationstodetermine

whetherrockformationscontainoilorgas)alreadymayhaveharmedmarineanimals,

whilealsoresultinginalossofincometolocalartisanalfishermenduetofishstockdeaths

andmigration.15Similarconcernshavebeenexpressedregardinggasdevelopmentforthe

8



centralcoastalareasofMozambique,wherecoastalcommunitiesderivetheirlivelihoods

fromartisanalfishing.

Resourceextractionnecessarilyhasanimpactontheenvironmentandforthatreason

achievingcompleteenvironmentalbalanceandharmonyistoallintentsandpurposes

impossible,neverthelessallactivitiesshouldaimtolimitanyenvironmentaldegradation

thatmightresult.Thisapproachisalreadyaddressedinlawandinenvironmentalimpact

assessments:maintainingenvironmentalintegrityshouldnotbesidelinedastheresource

revenuesthresholddrawsnearerandthestakesgethigher.Thereisafurtherfearthat

asthedateloomsforinitialproductionintheRovumaBasin,fisheriesandagriculture,

whichareimportantsubsistencesectors,maybeneglectedinfavourofthemoreprofitable

petroleumsector.16TheGoMshouldtrytoallaysuchfearsthroughagenuinecommitment

tofurtherdevelopingthesesectors,notonlybecausetheyareactivitiesthattraditionally

havesupportedlivelihoodsbutalsobecauseoftherisksinherent inover-relianceon

exportsofasinglenaturalresourcecommodity.

m o Z A m b I Q u e ‘ S h y d r o c A r b o n S S e c t o r

ExplorationinMozambique’shydrocarbonssectordatesbackmorethanacentury,to

the1904discoveryofonshoresedimentarybasinsintheMozambiqueBasin;financial

andtechnologicalconstraintspreventeditsdevelopment.Between1961and1967further

onshorediscoveriesbymultinationaloilcompaniesatPande,BuziandTemaneinthe

MozambiqueBasinprovedthepresenceofhydrocarbonsreserves,althoughatthatpoint

theircommercialviabilityremaineduntested.17Politicalunrestduringthestrugglefor

independencefollowedbythecivilwarbetweenFrelimoandRenamohaltedfurther

explorationordevelopmentofthehydrocarbonssector(atthetime,also,international

interest inpetroleumresourceswas focusedon themore lucrativecrudeoil sector).

Recognising the potential of hydrocarbons as an energy input, however, the GoM

establishedanationaloilcompany,EmpresaNacionaldeHidrocarbonetosdeMoçambique

(ENH),inthe1980s.ThiswasfollowedbyamappingandappraisalexerciseatPande,

wheregashadalreadybeenstruckinthe1960s.18

Intheearly2000sSasoldrilledandsuccessfullyappraisedthePandeandTemane

fields,provingthecommercialviabilityofgasreservesofaround2.7tcf,equivalentto

25years’production.19Ataninitialcostof$1.2billion,Sasol,theSouthAfricangovernment

andtheGoMtogethersignedanagreementin2000allowingfortheintroductionof

Mozambique’sgasintotheSouthAfricanmarket.20Projectworkontheventurebegan

in2002andfirstproductionandexporttoSouthAfricatookplaceinFebruary2004.

Withatotallifespanof25years,theprojectisstructuredinthreeeight-yearphases.

Inthefirstofthese(2004–2012)Sasol’sproductioncapacitywas120milliongigajoules

ofgasayear(MGJ/a).ThebulkoftheproductwasexportedtoSouthAfricathrough

an 865 km pipeline connecting the central processing facility near the Pande and

TemanefieldstoSasol’sfacilitiesatSecundainSouthAfrica’sMpumalangaProvince.21

Thesecondphase,beginninginearly2012,hasaproductioncapacityof183MGJ/a,most

ofwhichwillbeexportedtoSouthAfrica.Asmallerproportion(27MGJ/a)willbesold

ontheMozambicanmarketand9MGJ/awillremaininMozambiqueasroyaltygas.22


9


Figure 1: Natural gas fields in Mozambique: operational and proven reserves

Source:NationalPetroleumInstitute(InstitutoNacionaldePetroleo),Maputo,AcreageMap&INP

Database,http://www.inp.gov.mz/Exploration-Production/Maps.

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ThesituationinthegasindustryhaschangedsinceSasolbeganitsproductionand

exports. In Mozambique, game-changing discoveries of conventional gas have been

madeintheRovumaBasin,whichcouldearnMozambiquebillionsofdollarsinFDI

and export revenues. Internationally, the use of relatively new technologies in the

extractionofunconventionalgashasgivengreateraccesstoapreviouslyinaccessible

resource,therebyraisingtheprofileofgasasanenergyinputinthefossilfuelsmarket.

InJuly2005theNationalPetroleumInstitute(NPI),whichisresponsibleformanaging

Mozambique’spetroleumresourcesandadministersoperations,announcedMozambique’s

secondpetroleumlicensinground,‘focusedontheRovumaBasinoffthecoastofCabo

DelgadoProvince’.23Sincethatannouncementmultinationalpetroleumcompanieshave

enteredMozambiqueinsearchofopportunitiesinthegassector.Subsequentlytwoother

licensingroundswereopened,withafifthexpectedin2013.Todate,mostoftheinterest

inMozambique’shydrocarbonscentresontheRovumaBasinandontheMozambique

Basininthecentralon-andoffshorearea.CurrentestimatesfromexplorationbyUS

companyAnadarkoPetroleumCorporationandtheItalianintegratedenergycompany,

ENI,arethattheRovumaBasinaloneholdsinexcessof100tcfofthegasresourcein

place.24

ThefourpetroleumlicensingroundstodatehaveresultedintheGoM’sawarding

severalconcessionsforhydrocarbonsexplorationin11areasintheMozambiqueand

Rovumabasins.InaccordancewiththeprovisioninPetroleumLaw3/2001that‘theState

reservesitself[sic]therighttoparticipateinPetroleumOperationsinwhichanylegal

personisinvolved’,25ENH,asMozambique’snationaloilcompany,hasastakeineach

oftheexplorationblocks,allowingfordirectrepresentationofthenationalinterestat

decision-makinglevelineveryconsortium.26Thegovernment,withENHasitsvehicle,

expectstocarryitsshareholdingthroughtothedevelopmentofeachoftheblocks,a

provision also enshrined in law. Despite current record annual economic growth

rates,financiallythisundertakingwillrepresentamajorchallengefortheGoM.ENH,

however,believesthatfinancewillnotbeasignificantobstacle,andis‘lookingtobanks

andre-evaluatingitsassets’tofindwaysoffinancingthenextstageofdevelopmentin

theexplorationblocks.27Thecompanybelievesthatitisinthenationalinterestthatit

maintainsashareholdingintheconcessionblocks,whichcanbeusedbythegovernment

tomaximisethebenefitofthegasrevenuesforthepeople.28

Tables1and2showeachoftheexplorationblocksbyoperatorandtheshareheldby

ENHas‘GoM’srepresentativeintheoilandgasindustry’.29

MajordiscoveriesinArea1andArea4haveresultedinfiercebiddingforstakesin

eachoftheblocksassomecompanieshavesoughttorelinquishtheirsharesandothers

seekentryintothisfrontierarea.Asanexample,in2012London-basedCoveEnergyPLC

soldits8.5%stakeinArea1toThailand’snationaloilcompanyPTTEPfor$1.9billion.

Inthefirstquarterof2013,ENIcommitteditselftoselling20%ofitsstakeinArea4to

theChinaNationalPetroleumCorporation(CNPC),andcurrentlyadealispendingon

thesaleofa20%stakeonofferinArea1.Asexplorationbeginsintheotherblocksin

theRovumaBasinthereisastrongpossibilitythatthetrendtowardstradingstakeswill

continue.


11


Table 1: Exploration blocks in the Mozambique Basin

Block Operator ENH share

Sofala Sasol 15%

M-10* Sasol and Petronas (Malaysia) 15%

Areas 16 and 19 Sasol 15%

Area A Sasol 10%

Buzi PT Kalila Energy (Indonesia) 25%

Inhaminga DNO International (Norway) 20%

*ThewelldrilledbySasolinBlockM-10hassincebeenpluggedandabandonedasitdid

notencounteranysignificanthydrocarbons.Preliminaryexplorationactivitiescontinue

intheotherblocks.

Source:compiledbyauthor.

Table 2: Exploration blocks in the Rovuma Basin

Block Operator* ENH share

Onshore Area Anadarko Petroleum 15%

Offshore Area 1 Anadarko Petroleum 15%

Blocks 2 and 5 Statoil (Norway) 10%

Blocks 3 and 6 Petronas 10%

Area 4 ENI 10%

*Mostoftheoperatingcompaniesareinconsortiumwithotherinternationalpetroleum

companiesintheirrespectiveexplorationblocksbutthesehavenotbeenlisted.

Source:compiledbyauthor.

TheRovumaBasinholdsmostof thegasresourcesofardiscoveredinMozambique.

AnadarkoandENI,thecompaniesleadingexplorationintheBasin,haveindicatedthat

thevolumeofprovengasreservesjustifiesconstructionofaliquefiednaturalgas(LNG)

facilityonthecoast.InDecember2012thetwocompaniessignedaHeadsofAgreement

thatwillallowforco-ordinatedeffortsindevelopingaLNGplanttoreceivegasfromthe

offshorefields,andpre-treatandprocessitinpreparationforstorageandexport.30There

isafairmeasureofcertaintythatmostofthegasfromtheRovumaBasinwillbesoldon

theinternationalmarketandAsiancountrieshavealreadybeenidentifiedasitsprimary

customers.

There have been calls, however, from within government and from civil society,

to ensure that the gas is also used domestically to address some of Mozambique’s

pressingsocio-economicchallenges.31Theseproblemsinparthavebeeninheritedfrom

Mozambique’scolonialpastandfrompost-colonialsocialistpoliciesthatfailedtoaddress

thelegacyofthelongPortugueseoccupation,16yearsofcivilwarbetweenFrelimoand

Renamothatbegantwoyearsafterindependence,andpost-transitionpoliciesthattodate

havebeenlessthanentirelysuccessfulinaddressingmajorsocio-economicproblems.

12



12

c o m I n G o f A G e : m o Z A m b I Q u e ’ S P o L I t I c A L A n d e c o n o m I c h I S t o r y

MozambiquewasaPortuguesecolonyuntil1975.Duringthecolonialeratheeconomy

wasdominatedbyagriculture,trade–mainlywithSouthAfricaandZimbabwe(then

Rhodesia)–andremittancesfrommigrantlabourersworkinginneighbouringcountries.

Because the colonial government had remitted the bulk of revenues generated in

MozambiquetoLisbon,theseatofthecolonialpower,atindependenceinJune1975

thePortugueseleftbehindthemaneconomythathadnotenjoyedallthefruitsofthe

indigenouspopulation’slabour.Frelimoinheritedalargelyuneducatedandunskilled

population;acountrywithweakinfrastructureravagedbyadecade-longindependence

war, low investment in infrastructureand the lootingofpublicpropertybycolonial

authoritiesonceitemergedthatindependencewasinevitable.32

Portugal’srapidwithdrawalandhandoverofpowertoFrelimowasfollowedbythe

establishmentofaone-partystatebasedonMarxistideology.33Frelimoaligneditselfwith

theUSSRandsoonaftercomingtopowerembarkedonaprogrammeof’socialistreform’.

SouthAfricaandRhodesia,respectivelystillunderApartheidandminorityrule,responded

bydown-scalingtheireconomicco-operationwithMozambique.Thishadadevastating

effectontheabilityoftheFrelimogovernmenttoovercomethesocio-economicruin

thatthenewly-independentstatehadinherited.Theimpositionofacentrallydirected

economy,agradualexodusofskilledPortuguesenationals,weakeningeconomicties

withneighbouringcountriesandalargelyuneducatedpopulation,furtheraggravatedthe

desperatemalaisethatcharacterisedpost-colonialMozambique.

Thesituationdeterioratedfurtherin1977whenRenamo,backedbyRhodesiaand

SouthAfrica,launchedacivilwaragainsttheFrelimogovernment.34Thewardiverted

attentionfromurgenteconomicquestionsandfurtherdestroyedtheinfrastructure.35By

the1980s,influencedbytheimminentcollapseoftheSovietUnion,persistentdomestic

economicdeclineandthedebilitatingeffectofanoverlydominantstate,theFrelimo

governmenthadstartedtoturntotheWest.Newpoliticalalliancesandnewsourcesof

funding,however,camewithconditionsattached.Mozambiquefounditselfcompelled

tojointheInternationalMonetaryFund(IMF)andtheWorldBankandtoadopttheir

structuraladjustmentprogrammes(SAPs).AtthesametimeMozambiqueabandonedits

centrallyplannedsocialisteconomyinfavourofneoliberaleconomicpolicies.In1987the

IMFandtheWorldBanksponsoredan‘EconomicRecoveryProgramme’forMozambique

which,althoughshowingpositiveindicatorsformacro-economicgrowth,carriedwithit

asocialcostevidencedbydecliningwages,risingfoodpricesandhighinflation.36The

movetoamarket-basedeconomywas,however,followedbyaninflowofdevelopment

aidandprivatecapital,mainlyfromWesterncountries;37newfundingthatcontributedto

improvedeconomicgrowthinthelate1980sandservedtocushiontheimpactofSAPs

onsocialindicators,withforeignaidincreasinglydirectedtowardshumandevelopment

bytheearly1990s.

Whileaneweconomicorderwasbeingestablished,changesinthepoliticallandscape

werealsoundernegotiation.DirectpeacetalksbetweenFrelimoandRenamobeganin

1990andanewconstitutionenshriningfreeandfairmultipartyelectionswasadoptedin

Novemberofthesameyear.ThewarfinallycametoanendwiththesigningoftheRome

GeneralPeaceAccordsin1992.38Thefirstdemocraticgeneralelectionswereheldin


13


1994withFrelimowinningamajorityinbothpresidentialandparliamentaryelections.

Thepartywentontowinboththepresidencyandaparliamentarymajorityingeneral

electionsin1999,2004and2009.39

Fromthebeginningof the1990s itbecame increasinglyclear thatMozambique’s

neweconomictrajectorywasnotwithoutcontroversyorcontradictions.Thepurported

benefitsofSAPsandforeignaidnotwithstanding,theeconomyagaindeclinedinthe

early1990sandalongwithit,realpercapitaincome.Exportsfellandthebudgetdeficit

continuedtoincreaseinspiteofgovernmentbudgetcuts.40

AtthatpointitproveddifficultforWesterninstitutionspromotingtheWashington

ConsensustoclaimunqualifiedsuccessinMozambique’seconomictransformation.Asthe

countrystoodonthethresholdofrealdemocracyitfounditselfinaveryweakeconomic

position.Bytheendofthecivilwarin1992itwasnotonlyoneofthepoorestcountries

intheworld,butwasalsoamongthemostheavily-indebted,withanexternaldebtbillof

over200%ofGDPbythemid-1990s.41Atthebehestofvariousmultilateralinstitutions

thegovernmenthadtighteneditsbudgets,adoptedfiscalpolicyreformstomeetfree-

marketimperatives,removedsubsidies,devaluedthecurrencyandopeneduptheborders

tocheapimports.Socially,thewarhadresultedinmorethanamillioncasualties,the

internaldisplacementofthreemillionpeople,andfurtherdestructionoftheremaining

infrastructure,includinghealthandeducationfacilities.42Allthesefactorscontributedto

asevereimpairmentofgenerallivingconditions,theameliorationofwhichformedurgent

prioritieswhichtheGoMneededtoaddressthroughdonoraidandwithwhateverpolicy

instrumentswereavailabletoit.

Inthe1990sagroupof19donorgovernmentsandagencies(theG-19,alsoknown

astheProgrammeAidPartners[PAP]),committeditselftoassistingMozambiqueby

increasingfinancialaidandinstitutionalandpolicy-makingsupport.Initiallythiswas

directedtowardsapeacefultransitiontomultipartydemocracybutlatereffortswent

towards promoting socio-political inclusiveness in Mozambique’s democratisation

programme.43Intheyearsfollowingthefirstdemocraticelectionsdonorshadengaged

inproject-basedsupportaspartofawideragendaofpromotingdemocracyandgood

governance,whichlateralsoshiftedtosupportforthecentralstatebudget.44Record

annualeconomicgrowth–hoveringaround7–8%fromthemid-1990sintothe2000s–

andrelativepoliticalstability,encourageddonorstoviewMozambiqueasanexemplarfor

donoraidtofostertheachievementof‘peace,stabilityandgrowth’.45

DonoraidtoMozambique,inatimeoflimitedeconomicindependence,infacthashad

asignificantimpact:onstatebudgeting,onpovertyalleviationandonpolicy-makingand

politics.AlthoughtherehavebeenclaimsthatMozambiquehasreliedsoheavilyondonors

thatithasbecome‘aidaddicted’,46exponentialgrowthintheextractivesector,alongwith

concomitantFDIinflows,hasledtoprojectionsofadeclineinaiddependence.Apattern

isbeginningtoemerge.In2010externalsupportforthestatebudgetwas51.4%;thishad

droppedto44.6%in2011,suggestinganincreasedgovernmentcapacitytofunditsown

spending.Inthesametwoyears,mainlyduetoaboomingextractivesector,FDIdoubled

from$1billionto$2billion,withtheWorldBankestimatingthatMozambiquecould

receive$70billioninrevenuesfromgasprojectsby2020.47Asitsburgeoningminingand

hydrocarbonsindustriesbegintoconfergreaterfinancialindependencetherelationship

betweendonorsandtheGoM,asaidrecipient,isboundtochange.Addressingthelikely

outlookofgovernment’srelationshipwithdonors,inaDecember2012interviewwiththe

14



Belgium-basedmagazineGREAT Insights,PresidentArmandoGuebuzaindicatedprecisely

howtheGoMseesfuturerelationswithdonors:

‘...therelationshipwillprobablychangeinthesensethatastimegoesonandaswehave

moreresourcesinourbudget,wearegoingtoneedmorebusinessandcommerciallyoriented

relationswiththosecountriesthathavetraditionallyprovideddevelopmentfunding.Itwill

shiftastimepasses;inabout10years’timewewillnotberelyingondonationslikeweare

today.Wecanexpectagradualshiftinthefocusoftherelationship.48

ItisclearthattheGoMseesrelationsmovingmoretowardseconomicpartnershipthan

aiddependence.FortuitouslythisshiftcomesatatimewhengovernmentsinOrganisation

forEconomicCo-operationandDevelopment(OECD)countries(whichincludemostof

Mozambique’sdonors)aretighteningbudgets.49Dependingonhowitisnegotiatedand

managed,thechangingnatureofthedonor-recipientrelationship,whilegradual,maywell

servethefutureinterestsofboththeG-19andMozambique.

f r o m d o n o r S ’ d A r L I n G t o r e S o u r c e - b A S e d S o v e r e I G n t y ?

DonoraidhascomeintwostreamsfromtheG-19.First,donorshavedirectlyfunded

specificprojects.Thisassistancehasbeenintheformofdirect institutionalcapacity

building at national and local level, primarily for improving service delivery and

administrativeskills.Secondly,theG-19directlyprovidesgeneralbudgetsupport(GBS)

tothestateinordertohelpthegovernmentfunddevelopmentprojects,suchaspoverty

reductionprogrammes.

Soonaftertheelectionsof1994donorsrealisedthatdespiteitsmeasurablesuccesses,

projectsupportbroughtwithitheavypitfalls,someofwhichhavebeendocumentedby

TonyHodgesandRobertoTibana(amongothers).Theyarguethatdependenceondonors

hasalsocarriedsignificantimplicationsforMozambique’sbudgetingandgovernance.

Projectsupportcreatesburdensonanalreadyoverstretchedpublicserviceandhasserved

tofragmentstateplanningwhenprojectslocatedwithinspecificdepartmentsdemand

functionalandreportingproceduresdifferentfromnormaldepartmentalprotocols.The

prevailingviewthatreformisdrivennotfromwithinbutexternallybydonorcountries

andagencieshascreatedapublicservicethatisacquiescentratherthanproactive.The

furtherfactthatsomeprojectsaredirectlyfundedwithmoneythatbypassesthetreasury

imposesyetmorereportingandadministrativeburdens,increasestransactioncostsfor

theGoMastherecipientgovernment,andopensupthescopeforfundstobesiphonedto

otherchannels.50Tosomeextenttheseshortcomingshavetaintedthemeasurablesocio-

economicsuccessestheGoMhasachievedwiththeassistanceoftheG-19since1992.

These and other deficiencies led to the introduction of GBS alongside targeted

programmesupport.Formorethanadecadesincethen,donoraidhascomprisedabout

50%of theGoM’s totalbudget.Thisdominanceof aid in thebudgetpromptedone

economisttorefertoMozambiqueasan‘aid-addicted’countrythatwouldbebankrupt

without the constant stream of aid’;51 he argues that the ‘problem’ has become so

entrenchedthataidinMozambiquehasbecomea‘renewableresource’.52Suchcriticisms


15


notwithstanding,assistancefromtheG-19,whetherprimarilythroughGBSinrecent

yearsorfromprojectsupportearlier,hashelpedMozambiquetoachievestableannual

economicgrowthratesaveraging8%sincethelate1990s.53Thecountryhasdiversified

itseconomytoincludethreemainsectors:agriculture,industry–primarilyintheform

ofaluminiumfortheexportmarket–andservicesprovidedmainlybygovernment.54In

addition,after2001theGoMadoptedstrategiesandprogrammesspecificallytargeting

humandevelopment.By2008therehadbeennotableprogressinthisregard.Therate

ofabsolutepovertyfellfrom70%tojustover50%inthedecadefrom1997;in2009per

capitaGDPhadalmostdoubled,to$454,fromthe1997benchmark;theadultliteracy

ratestoodat50%in2008comparedwith40%in1997;accesstowaterandsanitation

hadincreasedmarkedlyby2008;maternalandinfantmortalityratesweredownandfrom

1997theprimaryschoolingcompletionratehadmorethantripled,to77%in2008.55

Inspiteof thesesuccessesthere isaconcernthatdonorfundingincreasinglyhas

divertedtheprerogativeofpolicy-makingfromMozambicandecision-makerstowards

donors, and thatdependenceonaidhasmade thegovernmentmoreaccountable to

donorsthantoitsownpopulation.56Expressingsuchasentiment,CarrieManningand

MonicaMalbroughwritethatinsupportingmulti-partyengagementinthefirstelections,

donorshavebeenviewedbothbyFrelimoandRenamoasaconstituencythatmightbe

moreimportantthaneventhevotersthemselves.57HansAbrahamssonalsoarguesthat

acalamitousoutcomeofdependenceondonorshasbeentheencroachmentofdonor

countriesontheeconomicandpoliticaldecision-makingprocessesinMozambique.58

Similarly,PaolodeRenzioandJosephHanloncontendthatsincetheendofthecivilwar

theGoMhasforegoneadrivefora‘nationalagenda’inexchangefortheadoptionofdonor

policiesthathaveservedto‘ensureasteadyinflowofresources’.59Thesheerscaleofdonor

aidhasboughttheG-19aseatatthepolicy-makingtableinMozambique,whichhasled

tocriticismsthatthedomesticagendahasbeenhijackedinfavourofwhatdonors,rather

thangovernment,regardasmoreimportant,erodingtheprerogativesofdomesticpolicy-

makerstofulfilthemandategivenbytheelectorate.Atthesametimepolicy-makinghas

seenasystematicexclusionofcivilsocietyagenciesandthenationalassembly,bothof

themobviouslykeystakeholdersindomesticaffairs.

InapaperanalysinghowhydrocarbonwealthmightimpactonMozambique’sdonor

aidprogrammes,EmilyAndersonarguesthattheboomingextractivesectorwillleadto

economicchangeswhichinturnwilldemandareassessmentofthecurrentpatternof

aid.60Asextractiveprojects,particularlyforgas,comeonline,thetraditionalNorth-

Southdonor fundingchannel favouredby theG-19might slowlygiveway toa less

conventionalinvestmentmodelalignedwiththeEastandSouth,whichwillbringwithit

greatercommercialopportunitiesforMozambique.61Theselatter,broaderrelationships

willnotbebasedonpolicyconditionalities,aswasnormallythecasewiththedonor-

recipientrelationshipbetweentheGoMandtheG-19.Furthermore,futurerevenuesfrom

hydrocarbonsandareduceddependenceoninternationalaid–evenmorepronounced

whenminingrevenuesarefactoredin–willoccuratatimeofdecliningaidbudgets

fromestablisheddonors,arisingfromthecurrentglobaleconomicmalaiseandpolitical

pressuresondonorgovernmentstospendlessinareaswhichtheirelectoratesdonot

considercentraltotheirinterests.Suchasituationislikelytoreducetheinfluenceof

donors on Mozambique’s domestic politics and policy-making while increasing the

leverageoftheGoMinnegotiatingaidconditions.

16



In2011theUNDevelopmentProgramme(UNDP)rankedMozambique184outof

187countriesintermsofhumandevelopment,measuredbyaggregatinglifeexpectancy,

educationand the standardof living.62This shows thatdespite substantialprogress

Mozambiquecontinuestofacepersistentsocio-economicchallengesthatmakeitoneof

theworld’spoorestandleastdevelopedcountries.Ahighpercentageofthepopulation

stilllivesbelowthepovertylinewithinadequateaccesstoformalemployment,health

care,formaleducationandenergy.Alargelyruralpopulation,itisreliantonsubsistence

farming;thereisamarkedvulnerabilitytonaturaldisasterssuchastropicalcyclonesand

floods;foodsecurityandmalnutritionisdeclining;andtheHIV/Aidspandemiccontinues.

Withinthiscontext,inSeptember2000Mozambique,with188othernations,signed

the Millennium Declaration under the auspices of the UNDP. This initiative seeks

to improvehumandevelopmentby2015,using eight strategic goals in sectors that

includehealth,educationandtheenvironment.63In2001,soonaftercommittingtothe

MillenniumDevelopmentGoals(MDGs),theGoMdrafteditsfirstPovertyReduction

StrategyPaper(PRSP):the‘ActionPlanfortheReductionofAbsolutePoverty2001-2005’

(Plano de Acção para a Redução da Pobreza Absoluta:PARPA).Thiswasfollowedbytwo

furtherPRSPs:‘ActionPlanfortheReductionofAbsolutePoverty2006-2009’(PARPAII)

andPovertyReductionActionPlan2011-2014(PARP).ThecentralobjectiveofPARPA

Iwastoreduceabsolutepoverty‘from70%in1997tolessthan60%in2005andless

than50%bytheendofthisdecade’.64PARP,thethirdstrategypaper,aimstouse‘pro-

poor’initiativestoreducetheincidenceofpovertyfrom54.7%in2009to42%in2014.65

TheGoMseespovertyalleviationasoneofitskeyhumandevelopmentobjectivesandit

continuestousethethreestrategypapersasblueprintsforachievingthisgoal.Donors

havesupportedthisthroughprovidingGBSatthenationallevel;supportrenewedin

2009whentheG-19statedinamemorandumofunderstandingwiththeGoMthat‘The

overallobjectiveofthePAPs’BudgetSupporttoMozambiqueistocontributetopoverty

reductioninallitsdimensions’.66

TheG-19alsostatedthat‘thePAPs’BudgetSupportshouldhelpattainthemutual

objectivesofpoverty reductionand theMillenniumDevelopmentGoals (MDGs) in

Mozambiquebyprovidingbudgetfinancingtothepublicsectorforpovertyreduction.’67

InadditiontodonoraidMozambiquehasalsobenefitedfromtheHeavilyIndebted

PoorCountries(HIPCs)andMultilateralDebtReliefInitiative(MDRI)fromtheWorld

BankandIMFwhich,inrecognisingtheadverseeffectofheavylevelsofdebtonpoverty

alleviation,soughttoeasethe financialburdenonqualifyingcountries.68While it is

undeniablethatMozambiquehasmadeprogressinhumandevelopmentandreaching

MDGs,criticismspersistthatcontinuedrelianceondonoraidhasrendereditsgovernment

weakinthefaceoftheG-19anditsdonor-ledagenda.

Gas for development

AsaresultofitssubstantialcoalandgasdiscoveriesMozambiquehasemergedasafossil

fuelsresourcetargetforinternationalenergycompanieslookingtoextendtheirfootprint

inthesector.Thisparticularlyappliestotheworld-classcoaldepositsoftheMoatizeBasin

inTeteProvinceandofferspotentialforunprecedentedrevenuestreamsforgovernment,

providedtheGoMisabletodeveloparegulatoryregimethatwillallowitfullytocapitalise

ontheabundantresources.


17


AccordingtoPetroleumLawNo3/2001‘Petroleumresourcesareassetswhoseproper

exploitationcancontributesignificantlytonationaldevelopment’,69apositionechoed

11yearslaterintheexecutivesummaryoftheMasterPlanDraftReport,whichsuggests

thattheGoMshoulddevelopnaturalgasresourcesinamannerthatmaximisesbenefits

toMozambiquesociety[sic]...inordertoimprovethequalityoflifeforthepeopleof

Mozambique,whileminimisingadversesocialandenvironmentalimpacts.’70

RecognisingMozambique’ssocio-economicchallengesandthepitfallsitmightholdfor

naturalresourcedevelopment,thedocumentalsoacknowledgesthat:71

...whilethesegasdiscoveriesareanadditionaleconomicwindfallforMozambique,they

presentseriouschallengestotheGoMinthebroaderpoliticaleconomy.Thesechallenges

lay[sic]inhowtoencouragedevelopmentoftheresourcesinawaythatbringsthegreatest

benefittoMozambique.

Muchofthediscoursewithingovernment,civilsocietyandthedonorcommunitycentres

on themainoptions forutilisationof the resource: respectivelyexportof the larger

proportionofthegas,andretentionoftheremainder,intheformofroyaltyandprofitgas,

tobeusedtostimulateagas-basedindustryinMozambiqueitself.TothisendtheMaster

PlanDraftReportexecutivesummarystates:72

‘Ontheonehand,promotingthedevelopmentofexport-centeredLNGprojectswillgreatly

addtogovernmentrevenuesthroughmonetizationofroyaltiesandMozambique’sshare

profits.ThisisrevenuethatMozambiquecanuseinternallyfordevelopment.Ontheother

hand,royaltiesandprofitscanbeusedin-kindwithinMozambiquetopromotevalue-added

manufacturingthat increases localemployment,promoteslocalbusinesses,andcreates

potentiallybroaderbenefitsacrossthecountry’.

AccordingtoaGoMofficial,‘governmentwillusegasandcoaltoindustrialisethecountry,

tobringinrentsandtocreatejobs.Thefocusisonthepeopleandeconomicgrowth’.73

ThereisindeedevidencetosuggestthattheGoMisalreadytakingstepstowardsthisgoal.

InOctober2012,afterthreeyearsasacandidatecountry,Mozambiquewasgrantedthe

statusofafullycompliantmemberoftheExtractiveIndustriesTransparencyInitiative

(EITI).74TheGoMseesthatstatusasonewaytopromotetransparency.75Italsoregardsits

commitmenttoimplementingtheEITIstandardasafirststeptoensuringthatthesector

generateswealthforMozambique.76

The government recognises that for the petroleum sector to function optimally,

politicalandcorporategovernanceofthesectorshouldbestrengthened.Tothisend,ithas

commissionedastudyoncorporatesocialresponsibility(CSR)inMozambique.According

toaseniorofficialinthemineralresourcesdepartmenttheoutcomeofthisstudywill

informtheconductofminingandpetroleumcompanies’CSRinitiatives.77

AlthoughtheGoMhasdisplayedsomelevelofcommitment,andtakensomesteps

towardscreatingaclimateinwhichthegascanbeusedfordevelopment,manyissues

stillneedtobeaddressedbeforethecountrycanbeseenasfullypreparedforthestart

ofproductionintheRovumaBasin.Manykeydecisionsmustbetaken;todosowill

requireafullunderstandingoftheimplicationsofpolicyoptions.Theseinclude,butare

notlimitedto,whethertheGoMwillreceiveitsroyaltiesandprofitshareingasorin

18



cash;preciselyhowitwillusetheproceedsofgasproduction;whatkindofinvestments

ithasplansfortomakethegasrevenuesgofurther;whichgas-basedindustrieswillbe

supportedinutilisingthegasinternally;thefiscalregimeforthesector;andwhetherthere

willbeacontinuationofwhatarewidelyseenasexcessivetaxrebatesforso-called‘mega-

projects’–capital-intensive,infrastructure-driven,large-scaleprojectsmainlyinmining,

energyandindustry.78

Governance and corruption

Within Mozambique and beyond its borders there are perceptions that the level of

corruptioninthecountryishigh.Demandsforelectoralreformandimprovementsin

governancewereevident in theaftermathof the2009generalelections,whichwere

marredbyproceduralandadministrativecontroversies,79togetherwitha‘donorstrike’

in2010inresponsetowidespreadcorruptionandtheslowpaceofpositivechangein

governance.80AlthoughtheG-19renewedaidflowslaterthesameyear,inJuly2012

TheNetherlands announced that itwould stopGBS to theGoM from2013,due to

insufficientprogressinpovertyreduction,governanceandfightingcorruption81(albeita

decisionmadeagainstthebackgroundofadecliningaidbudgetinHolland82andadrop

ofalmost3%between2010and2011inofficialdevelopmentassistancefromtheOECD’s

DevelopmentAidCommitteedueinparttotheglobalrecession83).

Aftertwodecadesofrelativepeaceandstability,enviableeconomicgrowthratesand

somehumandevelopmentimprovements,‘Mozambiqueremainsacountryintransition’84

wheredonorsandcivilsocietyareevermorefrequentlyexpressinggrowingconcernover

slowprogresstowardsgoodgovernance,transparencyandtheeradicationofwhatthey

regardascorruption.

ManypoliticiansintheFrelimorulingpartyhavebeenlinkedtoprivatecompanies,

creatingasensethatpoliticalconnectionshavebroughtwiththemprivilegedpositionsin

theprivatesector.Expressingasimilarsentiment,RobertLloydarguesthat:85

‘economicgrowth,strongstateinvolvementintheprivatesector,inadequateadministrative

andjudicialoversight,andFrelimo’scontrolofthegovernmentsinceindependencehave

createdampleopportunityforprivategainatpublicexpense’.

According to Transparency International’s Corruption Perceptions Index 2011,

Mozambiqueranked120outof182countries,indicatingaprevailingperceptionofa

highlycorruptpublicservice.86Suchopinionsarefurthergivencredencebycivilsociety

organisations,which,representingthelargersocietalbase,decryboththeinvolvementof

politiciansinbusinessandanabsenceofsufficientpublicaccountabilityintheuseofstate

revenues.87Unsurprisingly,perceptionsofwidespreadcorruptionhaveledtoaconcern

thatwiththegasboomonthehorizonitisthepoliticaleliteandotherwell-connected

individualswhowillderivemostbenefitfromthecountry’shugenewresource,tothe

detrimentofthoseonthelowerrungsofthesocio-economicladder.88

Oneareaofparticularconcern,forexample,isthelackoftransparencycharacterising

theadministrationoftheSocialProjectFunds(SPFs)administeredbytheNPI.These

funds,whichalreadyamounttomillionsofdollars,arepaidbycompaniesintheextractive

sectorfromtheoutsetofexploration,forsocialupliftmentprojectsinexplorationareas.89


19


AlthoughthereceiptofthesefundsisreflectedinEITIreports,questionshavebeenraised

astohowthegovernmentisusingthemoney,andtheaccountabilityandtransparency

mechanismsinplacetoensurethatthepublicbenefitsfromit.90Giventhattheamounts

alreadyspentonSPFsareonlyafractionoftheFDIinflowsthatthepetroleumsectorwill

seeinthecomingyears,thelackoftransparencyintheiradministrationisproblematic.

TheGoMhasputinplaceanumberofanti-corruptionmeasures,suchasthe2001

PublicSectorReformStrategy, anAnti-CorruptionLawpromulgated in2004, anda

CentralOfficeforCombatingCorruption,establishedin2005.Thereisalsoabroad-based

Anti-CorruptionStrategy,tofacilitatetheimplementationofwhich,amulti-stakeholder

Anti-CorruptionForumwascreatedbygovernmentdecree.Thisservedasaconsultation

platform for the Strategy (the Forum was later dismissed after the Constitutional

Courtdeclareditunconstitutional).Inadditionacodeofconductforpublicservants

wasestablished91andmostnotably,in2011theCouncilofMinistersadoptedananti-

corruption‘package’consistingofaseriesofbills.92Theselegislativedrafts,targeting

theprotectionofwhistle-blowers,promotingethicalconductandfurthercriminalising

corruptpractices,wereputbeforeParliamentinNovember2011.93Theintentionwasfor

thebillstobeadoptedalltogetherasa‘package’butatthetimeofwriting,Parliamenthad

passedonlysomeintolegislationandnotothers.

Hence,althoughstepshavebeentakentoaddresssomeofMozambique’spersistent

governancechallenges,institutionsthatcouldgiveeffecttotheselawshaveyettobe

granted sufficient powers to function. There is also limited co-ordination between

thosedifferentinstruments,whichfurtherhinderstheirabilitytoaddressgovernance

challenges.94

PetroleumLawNo3/2001isunderreviewandcurrentlybeforeParliamentasthe

PetroleumBill.Thereisarecognitionthatinordertoachievebestresultsinmaximising

governmentrevenues fromgasandachievingdevelopmentalpriorities,Mozambique

willhavetouseother,successfulcountriesasmodels.95TothisendENHandtheNPI

havebeenreceivingtechnicalassistanceintrainingandcapacity-buildingfromNorway.

Norwegianorganisationsarealsoworkingwithcivilsocietyinresearchinglegislativeand

environmentalaspectsoftheexploitationofnaturalresources.Inadditiontothisthe

WorldBankandthegovernmentofNorwayareprovidingassistanceoninvestigating

possibleusesofgaswithinMozambique,aprocesswhichhasculminatedinthereleaseof

afinalversionoftheMasterPlan.96

Mozambique’srecentcompliance intheEITIhasbeenhailed insomequartersas

majorleapforgreatertransparencyinthecountry’sextractivesector.97Thisoptimism

isnot,however,sharedbyallstakeholders.AcivilsocietyrepresentativeontheEITI

multi-stakeholderforumconsidersthat,whereasmanyimprovementshadbeenmadein

theprocessleadinguptocompliance,theEITIhasonlylimitedreach.Heconsidersthat

holdingarecordofpaymentsandreceiptsdoesnotpersetranslateintoaccountability.The

EITIshouldmovebeyonddocumentingpaymentsandreceiptstowardsactivelypromoting

accountabilityintheutilisationbygovernmentofextractiveindustryrevenues.98There

havebeencalls,mainlybycivilsociety,toextendthetermsofreferenceoftheEITIto

includenon-monetarypaymentsbycompaniestothegovernment,inthehopethatthis

measurewouldenablegreatermonitoringofextractiveindustrypaymentsincashand

alsoinkind(suchasextractiveproduct).Requestshavealsobeenmadeforgovernment

topublishcontractssignedbetweencompaniesandtheGoM,whichatthemomentare

20



consideredconfidentialandarevirtuallyinaccessibletothepublic.Theaimistoimprove

accesstoenablecivilsocietytomonitorwhethercompaniesareinfactmeetingtheir

paymentcommitmentsinlinewiththeircontractualobligations.

Asastartingpoint,however,Mozambique’scompliancewithEITIshowsaserious

commitmenttotransparencyandcoupledwiththeinitiativestheGoMhasundertakento

addresscorruptionandpoorgovernance,thereispotentialforawell-governedpetroleum

sector.

n A t I o n A L d e v e L o P m e n t P o L I c y A t t h e c r o S S r o A d S

Mozambiquehasprimarilyfocusedontwobroaddevelopmentalstrategies:first,using

donoraid fordevelopmentprogrammesandprioritiesasnotedearlierandsecondly,

promotingmacro-economicgrowththroughdeployingexportrevenuesinstatepriority

areas.TheGoMhasfavouredthemega-projects,justifyingthemonthebasisthatthey

attractFDI,generateemploymentandcontributetothenationalfiscus,mainlythrough

exportearnings.99Partoftherationaleisalsothatmega-projectsfuelentrepreneurial

opportunitiesthroughtheestablishmentofsupportivesmall-andmedium-scalebusinesses

alongsidethelargerinvestmentprojects.Inaddition,theystimulatetheeconomyintheir

immediatelocalitythroughlocalprocurementandpromoteCSRinitiativesthatallow

communitiestobenefitdirectlyfromeconomicdevelopment.100

Thefirstofthemega-projectswastheMozalProject,a$1.4billionaluminiumsmelter

located20kmwestofMaputo,promotedbytheGoMinthelate1990sasavehicleto

attractforeigninvestment,andstronglysupportedbytheSouthAfricangovernment.101

Theprojectwasannouncedjointlyin1998bySouthAfrica’sIndustrialDevelopment

Corporation (IDC), theGoM,UK-baseddiversified resourcescompanyBHPBilliton

andMitsubishiCorporationof Japanaspartners and shareholders in theproject. It

wasconsideredasuccess,asconstructionwascompletedaheadofscheduleandwithin

budgetand theworkcreated10 000 indirect jobsand1000direct jobs,mostly for

Mozambicans.102Mozalalsofacilitatedexport-orientatedinfrastructuraldevelopments

includingroadconstruction,abridgeandanewberthatMatolaPortinMaputo.Other

spinoffscameintheformofCSRinitiativesthattargetedsocialandcommunityissues

suchasHIV/Aids,malariainfection,inadequateaccesstoschooling,healthcare,sport

and culture,highunemployment,poor small businessdevelopment and inadequate

communityinfrastructure.103Thesuccessfulconstructionofwhatatthetimewasthe

country’s largest private investment project, and commencement of operations in

September2000,madeforamajorboostforMozambique’spost-warimage,indicatingto

theworldthatMozambiquewaspeaceful,stableandreadytocapitaliseonFDI.

FollowingMozal,theGoMhaspromotedfurtherinvestmentinmega-projectsasone

ofitskeygrowthstrategies.Intheearly2000sitawardedpetroleumrightstoSasolforgas

developmentinPandeandTemaneandforitspipelinetoSouthAfrica.Thiswasfollowed

bythesigningofanagreementwithLondon-listedKenmareResourcesfordevelopmentof

theMomamineralsandsmineinNampulaProvince104andamajorinvestmentdealwith

BrazilianminingcompanyValeSAfortheexplorationandsubsequentproductionofcoal

atMoatize.105Sincethen,numerousminingconcessionshavebeenawarded,particularly

incoal-richTete,andexplorationforgasresourcescontinuesinthenorthernRovuma


21


Basin.Whilenotalltheseschemesmayturnouttobemega-projects,thesizeofmanyof

theconcessionsindicatesthatcertainlytheywillbecomelargeinscale.

Thesocio-economicbenefitsthattodatehaveaccruedfrommega-projects,mainly

MozalandSasol’sgasventure,havebeenpresentedbythegovernmentasevidenceofa

successfuleconomicmodel.Thishasnot,however,passedwithoutcriticismfromwithin

andbeyondMozambique’sborders.Mega-projectsbytheirnaturerelyona‘trickle-down’

approachwhichassumesthatexportrevenueswillcontributetothenationalfiscusand

createopportunitiesformorebusinessesandindustries,whilecreatinglocallinkagesand

productsandservicessupportiveofthe‘anchor’project.Afurtherassumptionisthatthe

revenueswillbeusedbygovernmenttodevelopthecountryasawhole.Basedonthese

twoassumptionsitisarguedthatrevenueseventuallywillpercolatethroughtoalleviate

povertyandincreaseaccesstohealthcareandeducationamongotherpriorities.

Whilethismodelisnotnecessarilydoomedtofailure,inMozambiqueithasnotyet

liveduptoitspromise.ExceptwheretheGoMcommercialinterestsarerepresentedbya

nationalcompany–suchasENHinthepetroleumsector–themega-projectsareowned

primarilybyforeignentities.Theyarecapital-intensiveanddemandhigh-levelskillsthat

forthemostpartmustbeimported,eitherfromthehomecountriesoftheoperating

companiesorMozambique’sneighbouringcountries.106Thecompaniesexportthebulk

ofproductmainlyintheirprimaryformwithnovalueadded,resultinginlostpotential

foradditionaldomesticjobcreationandbusinessopportunities.107Thebenefitsofmega-

projectssofarhaveeludedthepoorestMozambicansandhaveonlymarginallyimproved

thelifeprospectsofcommunitiesintheprojects’immediatelocality.108Ina2011country

riskanalysisonMozambique,theDutchbankinggroupRabobankarguesthatalthough

mega-projectshaveapositiveeffectontheeconomytheydonotcreatemanyjobs,but

instead‘leadtoenrichmentofthehappyfew,whilemanypeople[remain]unemployed’.109

Thefailureofmega-projectstoliveuptotheirpotentialhasbeenaggravatedbytheGoM’s

inclinationtoincentivisethemwithlargetaxbreaksandimportexemptions.

AsMozambiqueenterstheneweraofagasboom,indicationsarethatmega-projects

willcontinuetofeatureinnationalpolicyandthatlargeforeigncompanieswillenjoya

relativelyfavourablefiscalandtaxregimedesignedtoattractevengreaterinwardfinancial

flows.Thisisregardedbysomeobserversasalarming,giventhatprojectsinthegassector

arelikelytofallwithinthe‘mega’categoryduetotheirlargeinvestmentandinfrastructural

requirements.Therehasbeenrecognition,however,thatsomechangesmustbemadeif

Mozambiquewishestoachievegreaterbenefitfromeconomicactivitieswithinitsborders,

particularlythoseintheextractivesector.Recognisingthatmanycontractsunfavourable

toithavealreadybeensignedwithprivatefirmsinvolvedinmega-projects,someinthe

extractivesector,theGoMisseekinglegislationtoremedyinequitablebenefitsaccruingto

thecompaniesinvolved.Inaparliamentaryaddressdefendingtheneedtorenegotiatesuch

contracts,FinanceMinisterManuelChangesaidthatthereisaneedtoachieve‘amore

significanteconomicandfinancialcontributionfromtheundertakingscarriedoutinthe

nationalterritory’.110Inlinewiththissentiment,civilsocietyorganisationsinMozambique

havealsobeenadvocatingareassessmentofthefinancialtermsandconditionsunder

whichmega-projectsingeneraloperate.Theyarguethatthroughcontractsthatconfer

disproportionatelyfavourabletaxconditionsonoperatingcompanies,Mozambiquedoes

notreceiveequitablebenefitfromoperationswithinitsborders.111

22



Thepromulgationofanewlawthatpermitsrenegotiationofcontractsmayensure

thatcorporations,thestate,thenationaleconomyandlocalcommunitiesderivemore

equalbenefitfrommega-projects.112Itisnotenough,however,forsuchalawtoexist

merelyonpaper.TheGoMwillhavetoshowitscommitmenttorightingmanyofthe

wrongsinherentinmega-projectsbygivingeffecttoitsexpressedintentionsandactually

negotiatingchangestocontractualclausesthatunfairlydisadvantagethegovernmentand

itspeople.AgainstthebackgroundoftheboominMozambique’sextractivesector,and

giventhatmanyoftheseminingandgasschemesbyvirtueoftheirsizeandinvestment

contributionswillbeclassifiedasmega-projects, it is importantthatthegovernment

demonstratesitscommitmenttoequityinfuturenegotiationsformega-projectsbymoving

aheadwiththelegislation.Thiswillnotonlysetthetoneforwhatistocome,butwill

haveanimmediate,positiveeffectonMozambicansingeneral.

The belief that there is a need to renegotiate the terms of some mega-projects

demonstrates a desire to address some of the shortcomings of the ‘trickle-down’

developmentmodel.Giventheincreasingcommercialinterestinthecountry’snatural

resourcewealthanditseconomyingeneral,theGoMisboundtoseeastrengtheningin

itsnegotiatingposition,buttheextentofamendmentstothetaxationregimeandfiscal

incentivestoattractFDIshouldnotbeoverstated.Asyet itremainsunclearhowfar

theGoMwillgotoincreasedirectstaterevenuesfrommega-projects,includingthose

intheextractivesector;especiallyifsuchactionisseenaspossiblysettingatrisksteady

FDIinflowsandcontributingtoanunfavourableinvestmentclimate.Althoughadelicate

balancehas tobestruckbetweenattracting foreign investorsandensuringequitable

benefits for government and society, in reality these twin priorities are not always

compatibleandindeedattimescanbetheopposite.ItiscrucialfortheGoMtostrikethe

correctstrategicbalancebetweenthem.Thisisparticularlyimportantinthecontextof

growingresourcenationalisminAfrica,whereincreasingly,citizensaredemandingthat

theyreceivegreaterbenefitfromexploitationoftheircountries’naturalresources,which

theyconsidernationalassetstobeusedfornationaldevelopment.

G e t t I n G t h e S t r A t e G I c b A L A n c e r I G h t

Accesstoenergyisoneofthemostimportantvehiclesforpovertyalleviationandoverall

economicgrowth.AlthoughMozambiqueenjoysamyriadofprimaryenergysources

includingcoal,naturalgas,hydroandwindpower,atpresentonly18%ofhouseholds

inMozambiquehaveaccesstoelectricity,withthegreatmajorityofMozambicansreliant

oninformalenergysourcessuchasbiomassandwood.113Recentgasdiscoverieshold

thepotentialtoalleviateenergypovertybymakingavailableaformalsourceofenergy

forhouseholdsandbusinessesalike.TheexecutivesummaryoftheMasterPlanDraft

Reportidentifiesvariousscenariosforutilisationofthegas,presentingoptionsavailable

totheGoMandcompaniesoperatinginthehydrocarbonssector,ratherthanlayingdown

ablueprintwhichparticipantsmustfollow.Theoptionsareinformedbyawiderange

offactors,includingestimatedgassupplyandproductioncosts;identifiablemarkets,

employmentgenerationcapacity,environmentalimpactsandvalueadded;andwaysin

whichthegaswindfallcanbestaddresssocio-economicchallenges.114


23


Broadly,twooptionshavebeenidentifiedfortheRovumaBasindiscoveries.Tomake

gasproductionintheBasincommerciallyviablethedevelopersplantoexportthebulk

asLNG–presumablyatmarketprices–whiletheGoMplanstouseroyaltygasandthe

profitshareallocatedtoENHtodevelopgas-basedindustry.AnadarkoandENIintendto

constructanonshoreLNGprocessingplantinitiallyincludingtwotrains(withtheoption

ofanincreaseto10trainseach)andwithacapacitytoprocessfivemilliontonnesofgas

annually.115

Theremainingoutputwillbeusedtodevelopgasindustries.Inanalysingpossible

usesforthegaswithinMozambique,theMasterPlanexecutivesummaryconsiderstwo

sectors.Thefirstissmallandmediumenterprises(SMEs)whichusenaturalgasasprocess

heatintheirindustrialandcommercialoperations,includingasfuelfortransport.These

undertakingsarenotcompelledtolocateclosetothegassourceandwillusethegas

onlyifitiscommerciallycompetitive.116Thesecondsectorcompriseslargeindustrial

customerswhichusegas either as a feedstock inmanufacturingor asprocessheat.

Feedstockindustriesincludeproductionoffertiliser(urea),methanolandgas-to-liquids.

Process heat uses include power generation, aluminium smelting, steel production,

petrochemicalsandrefining,117knownas‘anchorloads’duetothevolumesofgasused

andthepipelineinfrastructureneededtomakeproductionviable.Suchindustriestendto

locateclosetothesourceofthegasbecauseenergyuseistheirprimaryinputandmajor

costofproduction.118Venturessuchastheseconventionallywouldbecharacterisedas

‘mega-projects’inMozambique.

GiventhatitisalreadybeingproducedincommercialquantitiesbySasolinthePande

andTemanefields,interesthasalreadybeenshowninusinggasforpowergeneration.

Mozambique’sfirstgas-firedpowerstationbeganoperatinginJuly2012withaproduction

capacityof107MW.119Sasolhassinceenteredintoajointventurewiththestate-owned

powerutilityElectricidadedeMoçambiquefortheconstructionofa140MWgas-fired

powerplantatRessanoGarcia,MaputoProvince,expectedtocomeonlinein2014.120

TheRovumaBasindiscoverieshavealsopromptedSouthAfrica’snationaloilcompany,

PetroleumOilandGasCorporationofSouthAfrica(PetroSA),toapplyfora licence

tobuildagas-to-liquidsfacilityinMozambique.121Variouscompanies,mainlybasedin

JapanandGermany,haveapproachedENHregardinggassuppliesforproposedmethanol

andfertiliserindustrialplantsandaMozambicancompanyhasputinanapplicationfor

apipelineproject.122Althoughthislistisnotexhaustive,theinitiativescitedgotoshow

thatgasproductionhasrealpotentialtocontributetojobcreationandeconomicgrowth

aswellastoenergysecurityinMozambiqueandtherestoftheregion.

Oneway for theGoMtouse thenewlyestablishedgas industry toaddresssome

of Mozambique’s socio-economic challenges is by encouraging the growth of SMEs

thatcanprovidesupportingservices toanchor industries. In thisway, theGoMcan

supporta‘bottom-up’economicgrowthmodel;suchsmallerenterpriseswillcontribute

totaxrevenues,increaseemploymentandprovideamarketforgastobeusedintheir

operations.Thepetroleumindustry,however,isveryspecialisedanddemandsahighly

skilledworkforce,whichatpresentMozambiquedoesnotpossess.TheGoMwillhaveto

investinalong-termskillsinitiativewithuniversityeducationandartisanaltrainingas

twoofitscentralpillars.Apracticalgoalforthisshouldbethatovertimetheindustry

employsamajorityofMozambicansratherthananexpatriatetechnicallabourforce.

24



The GoM should also ensure that revenues from natural gas (and other natural

resources)areusedtodiversifytheeconomybyinvestinginagricultureandfisheries,

amongother sectors. Suchdiversificationwill protect the future economy from the

shocksnormallyexperiencedinthenaturalresourceexportmarket,whilealsoboosting

thosesectorsmostclosely,andtraditionally,associatedwithsustainablelivelihoods.Itis

importantthatthepopulationatlargecantapintothenaturalgasreserves.According

totheMasterPlanDraftReportexecutivesummary,apipelineinfrastructure,although

expensive,isamorecost-effectiveoptionthanaseriesofLNGfacilitiesalongthevarious

ports in thecountry. Itwill alsoserve toencouragesmall-scale industriesproviding

servicestomega-projects,whichinturnshouldhaveasnowballeffectonjobcreationand

economicgrowth.123

Export of LNG and development of a gas-based industry within Mozambique

shouldnotbeseenastwoseparateoptionsthatcannotworkintandem.TheGoMmust

necessarilypursuebothstrategiesifitistomaximisethepotentialbenefitsofthegas

discoveries.Inadditiontotheadvantagespreviouslycited,agas-basedindustrywould

boostMozambique’sexportsintheimmediateregion.Crucially,gas-to-powerplantscan

servethecountry’selectricitygenerationdemandswhilealsobeingusedtoexportsurplus

electricitytotheSouthernAfricacommonpowergrid.Furthermore,naturalgasisflexible

inapplicationandcanalsobeusedasaformalenergysourceforhouseholds,replacing

moreinefficientinputs.

Given theseconsiderations it is important that theGoMstrike the rightbalance

between the quantities of gas exported and the amount retained. It is a foregone

conclusionthatthebulkoftheresourcewillbeexported:theGoM,however,mustensure

thatit isabletonegotiateanequitableshare, incashorkind,withwhichtoaddress

pressingdomesticneeds.

t o W A r d S A f u t u r e o f G A S P r o d u c t I o n

AlthoughMozambiqueisnotnewtothegasindustry,thescaleoftheRovumaBasin

deposits,aswellasthepotentialofnewfieldstobelicensedinthenextlicensinground

expectedinin2013,makesitnecessarytorevisitexistinggovernancestructuresforthe

industry.AlthoughtheprojectedstartdateforRovumaBasinproductionmayappearfar

off,itisimportantthatgovernmentbeginstheprocessofsigningcontractsandputting

inplacelegislativeandregulatoryframeworksandinstitutionsforafutureoflarge-scale

gasproductionandexport.TheurgencyisnotlostontheGoM,asisindicatedinthe

commentbyaseniorofficialintheMinistryofPlanningandDevelopmentthat‘thegas

inRovumaneedsafastapproachifMozambiqueistogetthemostoutof[it].Contracts

needtobesigned;companiesareanxioustogetstarted’.124Thissenseofurgencyshould,

however,bebalancedwithenoughcautiontoavoidhastydecisionsthatwillprejudice

governmentandcitizensonceRovumaBasinproductionbegins.Itisalsoimportantthat

decisionsarebasedonasoundunderstandingofthesectoranditspotential,andofthe

demandsofthelargereconomy.

TheGoMhascertainlytriedtogetafirmerhandleonthegassector.AccordingtoDr

BiasthereviewofthePetroleumLawnotedabovecarrieswithittheintentiontodevote

‘extracaretodomesticinterests’andinvolvelocalcompaniesparticularlyintheprovision


25


ofgoodsandservices.125Article6oftheLawestablishesthatallpetroleumresourceswithin

Mozambicanterritoryarethe‘property’ofthestate.UnderArticle8thestatehassecured

directinvolvementinthesectorthroughENHwhich,asnotedearlier,hasashareholding

ineachoftheexplorationblocksaswellasinSasol’sexistingfields.ThePetroleumLaw

asitstandsalsoprovidesforproceduresinawardingcontracts;environmentalprotection

onceactivitieshavebegun;thefiscalregimegoverningthesector;anddisputeresolution

mechanisms.126ThePetroleumBillpresentlybeforeParliamentmakesacrucialaddition

thatmayhavesomelastingeffectifadministeredeffectively:Article7providesthatan

unspecifiedpercentageofthe‘incomegeneratedfromPetroleumOperationsischannelled

towardsthedevelopmentofcommunitiesintheareasinwhichPetroleumOperationsare

conducted’.127Interestingly,unlikepresentlegislationthedraftamendedPetroleumLaw

doesnotencompassthepetroleumsector’sfiscalregimealthoughitmightbethoughtthat

stipulatingthatregimeintermsoftax,royaltiesandotherpaymentsduetotheGoM,is

crucialtosoundfinancialmanagementofthesectoraswellastoenvironmentalstability

andestablishingalevelplayingfieldamongparticipants.Taxationlevelsmustnotbeso

highastodeterinvestment,butnotsolowastounfairlydisadvantagegovernmentand

society.ThisisabalancethatmustbecarefullynegotiatedbytheGoMinitsquestto

regulatethesectorinsuchawaythatitremainsattractivetoforeigncapital,whilemaking

ameaningfulandequitablecontributiontothenationaleconomy.

Within the extractive sector there are indications that the GoM is committed

to ensuring good governance and equitable benefit for society, indicated through

collaborativeeffortstobuildcapacityandenactlegislationbetweenMozambicanstate

officials,theWorldBankandotherdonoragencies.Ithassetupaninterdepartmental

steeringcommitteetooverseetheprogressoftheMasterPlanthroughtocompletion,

whichsignifiesitsintenttoinvestigateoptimalwaystousetheresource.Co-operation

betweendepartmentsinmattersofpetroleumlicensingalsoassistsinstreamliningthe

processandensuresthatallrelevantissuesaretakenintoaccount.TheCSRstudy,the

reviewofexistinglegislation,andcompliancewithEITIallindicatethattheGoMistaking

stepstowardsensuringgoodgovernanceinthenaturalresourcessector.

While the discourse within government circles, as well as some actions such as

legislativereform,encourageapositiveoutlook,notallstakeholdersinMozambiqueare

optimisticaboutthelikelycontributionofgastonationaldevelopment.Thereisaconcern

thatthecountrywillnotbeabletoputinplacetherequisitegovernanceandmanagement

structures in time for the signing of production contracts and the start of Rovuma

Basinextraction.Somestakeholdersevendoubtwhetherthereisarealcommitmentto

thisend.CivilsocietyhasquestionedwhetherMozambique’sEITIcompliancewillbe

effectiveineliminatingthediversionofresourcerentsfromstatecoffers,giventhatfunds

canbechannelledawayatstagesprecedenttothosemonitoredunderthestandard.128

Contractsbetweengovernment andbusiness enterprises in extractive industries are

confidentialdocuments,whichmakes itnear-impossible forcivil society tomonitor

whethercompaniesarerenderingthetaxestheyshouldunderlaw.Evenincaseswhere

companieshavebeengrantedfavourableconditionsitisdifficulttomonitorwhetheror

nottheyarepayingtheamountstipulatedintheircontracts–acrucialconcerninlightof

theargumentthatMozambiquehastendedtogivefavourabletermstoforeigninvestors,

whicharedifficulttorenegotiatewithoutcompromisingthecountry’sreputationabroad.

26



Parliament and civil society have an important role to play in ensuring that

developmental policies are adopted, implemented and adhered to. The role of the

legislativeassemblywillhavetobestrengthenedifitistoperformaseriousroleinholding

governmenttoaccount,ataskthatmaybelessthaneasygiventhatFrelimoholdswell

overtwo-thirdsoftheseatsintheassembly.Mozambique’scivilsociety,too,hasalways

beenweak,under-fundedandunco-ordinated.Thereisgreatpotentialforastrongand

unitedcivil societymovement to lobby for thechangesnecessary toensure thatgas

developmentbenefitsthebroadersociety.IndependentmediainMozambiquearewidely

consideredfreebutlack‘coverage,capacityandfunding’andengageinself-censorshipdue

tofearofbeingtakentocourtbygovernment’.129Thisisanotherproblemthatmustbe

correctedifthemediaaretoplayaseriouspartinholdingthestatetoaccount.

Theindependenceofmonitoringagenciescannotbeover-emphasised;onlythrough

unencumbered autonomy can they can perform their functions effectively. For this

reasontheGoMmustcommititselftogoodgovernance,accountability,transparency

andintegritybyestablishingoversightinstitutionstopromoteandmonitoradherenceto

legislationinthepetroleumsector.WhiletheEITIgoessomewaytowardsthis,theculture

ofsecrecysurroundingcontractsbetweentheGoMandcompaniesinthesectorlimitsthe

informationthatcanbeaccessedbythoseinterestedinmonitoringlegislativecompliance.

FurthermorethelimitedscopeoftheEITI,whichmonitorsonlypaymentsandreceipts,

meansthatitshouldproperlybeseenasastartingpointratherthananendinitself.Given

thesubstantialincomestreamtheGoMisanticipatingasaresultoftheRovumaBasin

discoveries,preventionofinadequateoversight,whichcouldintimegivewaytoaculture

ofnon-complianceandevencorruption,iscritical.

Inregardtoaccountabilitythereshouldbeclearandopenlinkagesbetweentheuses

ofrevenuesbygovernment.ThePetroleumBillmakesprovisionforaportionofrevenues

toberemittedtocommunitiesinareaswherepetroleumoperationsareconducted.Thisis

astepintherightdirectionbutitisimperativethatlocalauthorities,whichwillbetasked

withadministeringthesefunds,havetheadministrativeandlegalcapacitytomeetthis

obligation.Itisequallyimportantthatthereshouldbemechanismsinplacetoeliminate

opportunitiesforrentcaptureandcorruptionatthelocallevel.Thiswillgosomewayto

ensuringthatfundsareusedappropriatelyforlocalcommunityneeds,avoidingasituation

inwhichrevenuesremainatthenationallevelduetolackofcapacityfurtherdownthe

line–ashasoccurredinthepast.

c o n c L u S I o n

InthepastfewyearsmajordiscoveriesofnaturalgasinMozambiquehavebroughtwith

themanatmosphereofpalpableeagernessandanticipation.Internationalcompanies

prospectingforgashavesuggestedthatFDIinflowsmayrunintobillionsofdollars.The

governmenthasindicatedthatitintendstousethiswindfallfornationaldevelopment,

ordinaryMozambicanshopeforachangeintheirsocio-economiccircumstances,while

civilsocietyisadvocatingacautiousapproach.Itisclearthatsomedecisivesteps(eg

legislativereform,variousstudies,bilateralpartnershipsandEITImembership)have

beentakentowardscreatingaregulatoryframeworkfornaturalgasproduction.Concerns

remain,however,aroundcorruptionandalackoftransparencyandaccountability.Donors


27


andcivilsocietyorganisationscontinuetocallforgreatercommitmenttogoodgovernance

andtheeradicationofcorruption;ithasbecomeincreasinglyurgenttoaddressthese

shortcomingsifthegassectoristorealiseitsfullsocialpotential.

TheGoMshould regard theurgentdevelopmentalneedsofMozambiqueand its

peopleasitsprimaryconcern,andaccepttheimplicationsofsuchanapproach.These

wouldincluderevisitingunfavourablecontractsandgivingstatecontractnegotiators

enoughauthoritytoensurethatfuturecontractsinthegassectorarefairtoallparties.

Theargumentthatoverlylenientconditionsformega-projectsservetoattractFDIand

arethereforeofthemselvesgoodforthecountryinthelongrundoesnotholdwater

whentakenagainstMozambique’slowlevelofdevelopment.TheGoMmustunderstand

thatthegasdiscoverieshavecreatedasenseofhopeinMozambiqueandthathopes

frustratedcouldbringwiththemalevelofunrestandinstabilitydetrimentaltothepeace

andstabilitythatfosterinwardinvestment.Achievingsuchadelicatebalancedemands

firstandforemostapoliticalcommitmentonthepartofMozambique’selectedleadersto

improvingthecircumstancesoftheircitizensbydevisingpracticalandworkablestrategies

formaximisingthesocio-economicbenefitsaccruingfromthegasbonanza.

Wellmanaged,thegaswindfallcouldmoveMozambique’seconomysteadilyforward

bymakingthecountryanetexporteroftheresource;increasinggrowthratesevenfurther

andcuttingrelianceondonorfunding;itwillprovidetheprimaryresourceforalocalgas-

basedindustry,increaseenergyaccessforhouseholdsandbusinesses,andmakeavailable

moregovernmentfundsfordevelopmentprogrammes.

Whetherthiswillhappenafter2018willdependonmanyfactors.Amongthemare

GoMdevelopmentpolicies;thequalityoflegislationgoverningthesectorandtherigour

withwhichitisenforced;andtransparencyinmanagingrevenuesaccruingfromoperating

companies.Theremustalsobestringentaccountabilitystructures,strongmechanisms

dealingwithcorruption,andconsistentandunbiasedlegalrecoursewherelegislative

complianceislacking.

Mostimportantly,theremustbethepoliticalwillandcommitmentatgovernmentlevel

todistributethenewgasrevenuesinawaythatwillimprovethelotofMozambicansin

general.Atpresenttheyaresomeofthepoorestpeopleintheworld;butitmaybethat

theywillnotlongremainso.

e n d n o t e S

1 VermaN,‘MozambiquetooffernewblocksinQ12013-ministry’,Reuters,16October2012,

http://af.reuters.com/article/investingNews/idAFJOE89F01D20121016.

2 Personalinterview,seniorofficial,NationalDepartmentofMineralResources,Maputo,15May

2012;personalinterview,seniorofficial,NationalDepartmentofPlanningandDevelopment,

Maputo,17May2012.

3 ICFInternational,‘NationalgasmasterplanforMozambique:Draftreportexecutivesummary’

wassubmittedtotheGovernmentofMozambiqueSteeringCommittee26August2012with

thefulldocumentexpectedin2013.Thedocumentpresentsasummaryofoptionsavailable

inutilisingthegasasliquefiednaturalgasexportsorforlocalindustry.Itrecognisestheneed

tobenefitabroadbaseofsociety.

28



4 Personalinterview,seniorofficial,NationalDepartmentofPlanningandDevelopment,Maputo,

17May2012.

5 BucuaneA&PMulder,‘ExpandingexploitationofnaturalresourcesinMozambique:Will

itbeablessingoracurse?’inDeBritoLet al.,(eds),Reflections of economic questions,papers

presented at the inaugural conference of the Institute for Social and Economic Studies.Mozambique:

IESE,2007,p.104.

6 IsmailK,‘TheStructuralManifestationofthe“DutchDisease”:TheCaseofOilExporting

Countries’,IMFWorkingPaper10/103.Washington,DC:InternationalMonetaryFund,April

2010,p.4.

7 IEA(InternationalEnergyAgency), ‘Goldenrules foragoldenageofgas’,WorldEnergy

OutlookonUnconventionalGas.Paris:IEA,2012,p.9.

8 Op. cit.p.10.

9 WrightS,‘Anunconventionalbonanza’,The Economist,14June2012,http://www.economist.

com/node/21558432.

10 CPI(CentreforInvestmentPromotioninMozambique),http://www.cpi.co.mz/;CIA(Central

IntelligenceAgency),Langley,https://www.cia.gov/library/publications/the-world-factbook/

geos/mz.html.

11 RasmussenHL,‘DonorsputbrakesonMozambiqueaid’,Mail and Guardian,1June2010,

http://mg.co.za/article/2010-07-01-donors-put-brakes-on-mozambique-aid.

12 BiasE,‘ExplorationandminingopportunitiesinMozambique’,presentation,MiningIndaba

2012,CapeTown,6–9February2012.

13 Ibid.

14 Personalinterview,Researcher,WWF(WorldWildlifeFund),Maputo,16May2012.

15 RibeiroD&JDimon,Oil or Development: Results from a field study on the environmental and

social impacts of oil exploration along the northern Coast,JustiçaAmbiental,September2011.

16 Personalinterview,researcher,WWF,Maputo,16May2012.

17 NoormahomedAR,‘OverviewofMozambique’snaturalgasandoilpotential’,Presentation,

Washington,DC,29November–1December2006.

18 NPI(NationalPetroleumInstitute),‘HistoryofpetroleumexplorationinMozambique’,http://

www.inp.gov.mz/Exploration-Production/History-of-Petroleum-Exploration-in-Mozambique2,

accessed10July2012.

19 Sasol,AnnualReview,Johannesburg:Sasol,2004,p.38.

20 Sasol,‘PresidentsChissanoandMbekiinauguratenaturalgasventureinMozambique’,Sasol

NewsCentre,1June2004,http://www.sasol.com/sasol_internet/frontend/navigation.jsp?articl

eId=8500001&navid=4&rootid=4,accessed10July2012.

21 Personalinterview,seniormanager,SasolMozambique,Maputo,17February2012.

22 EsterhuizenI,‘SasolopensexpandedgasprocessingfacilityinMozambique’,Engineering News

Online,30May2012,http://www.engineeringnews.co.za/article/sasol-opens-expanded-gas-

processing-facility-in-mozambique-2012-05-30.

23 NPI,Pressrelease,http://www.inp-mz.com/Press.htm,London,15July2005.

24 Pretorius,op. cit.

25 RepublicofMozambique,PetroleumLawNo3/2001of21February,p.6.

26 Personalinterview,seniormanager,EmpresaNacionaldeHidrocarbonetosdeMoçambique

(ENH),Maputo,15May2012.

27 Ibid.

28 Ibid.


29


29 Ibid.

30 AnadarkoPetroleumCorporation,‘Mozambique:Developingnaturalgas’,Texas:Anadarko,nd.

31 ICFInternational,‘NaturalgasmasterplanforMozambique:Draftreportexecutivesummary’,

Fairfax:ICFInternational,26August2012,p.1.

32 Ibid.

33 PlankD,‘Aid,debtandtheendofsovereignty:Mozambiqueanditsdonors’,Journal of Modern

African Studies,31,3,1993,p.409.

34 AbrahamssonH,‘Theinternationalpoliticaleconomyofstructuraladjustment:Thecaseof

Mozambique’,European Journal of Development Research,7,2,1995,p.313.

35 PlankD,op. cit.,p.411.

36 MarshalJ,‘StructuraladjustmentandsocialpolicyinMozambique’,Review of African Political

Economy,47,1990,pp.29–31.

37 PlankD,op. cit.,p.411.

38 USDepartmentofState,‘AbriefhistoryofMozambique,Part2:Theroadtopeace’,http://

africanhistory.about.com/od/mozambique/p/MozambiqueHist2.htm,accessed,23July2013

39 AfricanElectionsDatabase, ‘ElectionsinMozambique’,http://africanelections.tripod.com.

mz.html,accessed13July2012.

40 UNDP(UnitedNationsDevelopmentProgramme),ReportontheMillenniumDevelopment

Goals: Mozambique 2010, 28 February 2011, p. 6, http://undp.org.mz/en/Publications/

National-Reports/Report-on-the-Millennium-Development-Goals-Mozambique-2010.

41 DibbenP,‘Transport,tradeandeconomicdevelopmentinMozambique:Anagendaforchange’,

inDeBritoL et al.(eds),op. cit.,p.198.

42 AbrahamssonH,op. cit.,p.299.

43 ManningC&MMalbrough, ‘TheChangingDynamicsofForeignAidandDemocracyin

Mozambique’,UNU-WIDERWorkingPaper,2012/18.Tokyo:UnitedNationsUniversity,2012,

p.3.

44 ManningC&MMalbrough,op. cit.,p.4.

45 De Renzio P & J Hanlon, ‘Contested sovereignty in Mozambique: The dilemmas of aid

dependence’,ManagingAidDependencyProject,GEGWorkingPaper2007/25,Oxford:Global

EconomicsGovernanceProgramme,January2007,p.2.

46 Personal interview, senior researcher, IESE (Institute for Social and Economic Studies),

Maputo,16May2012.

47 Bruschi F, ‘Mozambique at a Turning Point: From Aid Dependence to Development

Effectiveness’,GREAT Insights,1,10,2012,pp.9–10.

48 InterviewwithPresidentArmandoEmilioGuebuza,Brussels,16December2012,GREAT

Insights,1,10,2012,p.1.

49 OECD (Organisation for Economic Co-operation and Development), Development: Aid

to developing countries falls because of global recession,4April2012,http://www.oecd.org/

newsroom/developmentaidtodevelopingcountriesfallsbecauseofglobalrecession.htm,accessed

18January2013.

50 Ibid.

51 Personalinterview,seniorresearcher,IESE,Maputo,16May2012.

52 Ibid.

53 DeRenzioP&JHanlon,op. cit.

54 DibbenP,op. cit.,p.199.

55 UNDP,op. cit.,p.7–8.

30



56 Personalinterview,seniorresearcher,IESE,Maputo,16May2012.


58 AbrahamssonH,op. cit.,p.315.

59 DeRenzioP&JHanlon,op. cit.,p.4.

60 AndersonEJ,‘WhatdoeshydrocarbonwealthmeanforforeignaidinMozambique?’,Policy

Briefing50.Johannesburg:SouthAfricanInstituteofInternationalAffairs,2012.p.4.

61 AndersonEJ,op. cit.p.2.

62 UNDP,Human Development Report 2011,Sustainability and Equity: A better future for all,

Summary.NewYork:UNDP,2011,p.20.

63 UNDP,op. cit.,p.4.

64 RepublicofMozambique,ActionPlanfortheReductionofAbsolutePoverty2001–2005,

Strategy document for the reduction of poverty and promotion of economic growth,

Washington,DC:IMF,April2001,p.1.

65 RepublicofMozambique,PovertyReductionActionPlan2011-2014,Wasington:IMF,May

2011,p.7.

66 ‘MemorandumofUnderstandingbetweentheGovernmentofMozambiqueandtheProgramme

AidPartnersontheProvisionofGeneralBudgetSupport’,March2009,p.4,http://www.pap.

org.mz/others_reports.htm,accessed11July2012.

67 Ibid.

68 IMF,‘Debtreliefundertheheavilyindebtedpoorcountries(HIPC)initiative’,2April2013,

http://www.imf.org/external/np/exr/facts/hipc.htm,accessed23July2013.

69 RepublicofMozambique,PetroleumLawNo3/2001,op. cit.,p.1.

70 ICFInternational,op. cit.,p.3.


72 Ibid.

73 Personalinterview,seniorofficial,MinistryofMineralResources,Maputo,15May2012.

74 TheEITIisaninternationalstandardwhichaimstoenhancetransparencyintheextractive

sector,includingmining,oilandgas,throughthefulldisclosureoftaxandroyaltypayments

andreceiptsbycompaniesandgovernmentsrespectively,seewww.eiti.org.


76 EITI(ExtractiveIndustriesTransparencyInternational),Extractive Industries Transparency

Initiative, Second Reconciliation Report – Year 2009,Maputo,May2012,p.10.

77 Personalinterview,seniorofficial,MinistryofMineralResources,Maputo,15May2012

78 ICFInternational,op. cit.,pp.32–36.

79 ManningC&MMalbrough,opcit.,p.6.

80 RasmussenHL,op. cit.

81 Fin24,‘NetherlandsstopsbudgetaidtoMozambique’,13July2012,http://www.fin24.com/

Economy/Netherlands-stops-budget-aid-to-Mozambique-20120713.

82 ‘Report2012:Netherlands’,Brussels:AidWatch.http://aidwatch.concordeurope.org/countries/

project/netherlands/,accessed23August2012.

83 Tran M, ‘Drop in aid shows declining will for global partnership on development’, The

Guardian,20September2012,http://www.guardian.co.uk/global-development/2012/sep/20/

drop-aid-declining-will-global-partnership.

84 LloydR,‘CountriesattheCrossroads2011:Mozambique’,FreedomHouse.Washington,DC:

FreedomHouse,2011.

85 LloydR,op. cit.


31


86 Corruption Perceptions Index 2011. Berlin: Transparency International, 2011, accessed

8August2012.

87 Personalinterview,seniorresearcher,CentreforPublicIntegrity,Maputo,17May2012.

88 Ibid.

89 Personalinterview,researcher,WWF,Maputo,16May2012.

90 Personalinterview,seniorresearcher,CentreforPublicIntegrity,Maputo,17May2012.

91 Martini M, ‘Overview of corruption and anti-corruption in Mozambique’, Transparency

International,Anti-corruptionResourceCentre,5March2012,pp.8–9,accessed9August

2012.

92 PereiraPG&JCTrindade,‘OverviewandanalysisoftheAnti-corruptionlegislativepackage

ofMozambique:Findings’,Basel:BaselInstituteonGovernance,31October2011,http://

www.baselgovernance.org/fileadmin/docs/publications/commissioned_studies/Mozambique_

Findings.pdf.

93 MartiniM,op. cit.,p.9.

94 Ibid.


96 Personalinterview,seniorofficial,CommercialDepartment,ENH,Maputo,15May2012.

97 LeeR,‘Majorsteptowardsminingtransparency’,OpenSocietyInitiativeforSouthernAfrica,

28October2012,http://www.osisa.org/economic-justice/mozambique/major-step-towards-

greater-mining-transparency,accessed23January2013.

98 Ibid.

99 All Africa Global Media, ‘Mozambique:BenefitsofMega-ProjectsExplainedtoParliament’,

11April2012,http://allafrica.com/stories/201204111170.html.

100 ‘Mozambique:Planningministerdefendsmega-projects’,Pretoria:TradeMarkSouthernAfrica,

25 November 2010, http://www.trademarksa.org/news/mozambique-planning-minister-

defends-mega-projects,accessed10July2012.

101 Personal interview, senior commissioner, South African High Commission, Maputo,

Mozambique,16February2012.

102 ‘Casestudy:BHPBilliton–MozalAluminiumSmelterinMozambique’,Melbourne:Business

forMillenniumDevelopment,http://www.b4md.com.au/Files/MDG2_CaseStudy.pdf,accessed

10July2012.

103 Ibid.

104 BarradasS,‘Momatitaniummineralsandsproject’,Mining Weekly,7July2006.

105 Business Report,‘Valeopens$1.7bncoalmineinMozambique’,9May2011.

106 Sonne-Schmit C, Arndt C & M Magaua, ‘Contribution of mega-projects to GDP in

Mozambique’,paperpresentedatIIIESEConference,Maputo,22–23April2009,p.5.

107 Ibid.

108 Afrodad(AfricanForumandNetworkonDebtandDevelopment),‘Whathastaxgottodowith

development?AcriticallookatMozambique’staxsystem’.Harare:Afrodad,2011,p.9.

109 MeijerR,‘CountryReport:Mozambique’,Utrecht:Rabobank,October2011,p.4.

110 All Africa Global Media, ‘Mozambique: New bill envisages renegotiating megaprojects’,

11May2011,http://allafrica.com/stories/201105111043.html.

111 Personalinterview,assistantresearcher,IESE,16May2012.

112 All Africa Global Media,11May2011,op. cit.

113 Mahumane G, Mulder P & D Nadaud, ‘Energy outlook for Mozambique 2012–2030

LEAP-basedscenariosforenergy-baseddemandandpowergeneration’,paperpresentedat

32



Mozambique:AccumulationandTransformationintheContextoftheInternationalCrisis,

IESE3rdInternationalConference,Maputo,4–5September2012.


115 JansenR,‘Anadarko,ENIpushonwithMozambiqueLNG’,3January2013.London:TCE

Today,accessed30January2013.


117 Ibid.

118 Ibid.

119 Macauhub,‘RessanoGarciapowerplantinMozambiquetoopenonWednesday’,17July2012,

http://www.macauhub.com.mo/en/2012/07/17/ressano-garcia-power-plant-in-mozambique-to-

open-wednesday/.

120 CreamerT,‘Sasol,EDMsigncontractforRessanoGarciagas-firedpowerplant’,Mining Weekly,

13December2012,http://www.engineeringnews.co.za/article/sasol-edm-sign-contract-for-

ressano-garcia-gas-fired-power-plant-2012-12-13.

121 Fin24,‘PetroSAintalkswithMozambiqueonGTLplant’,25April2012,http://www.fin24.com/

Companies/Industrial/PetroSA-in-talks-with-Mozambique-on-GTL-plant-20120425.


123 ICFInternational,op. cit.p.21.

124 Personalinterview,seniorofficial,MinistryofPlanningandDevelopment,Maputo,17May

2012.

125 Aiogace(AngolaInternationalOilandGasConferenceandExhibition)2012,‘Utilisingand

identifyingnewoilandgasresourcesforthebenefitofAngola’sfuturegenerations’,Interview

withMozambicanMinisterofMineralResourcesEsparançaBias,Luanda,7–9May2012.

126 RepublicofMozambique,PetroleumLawNo3/2001,op. cit.

127 RepublicofMozambique,DepartmentofMineralResources,PetroleumLawReview(unofficial

translation).

128 OssemaneR, ‘Is theExtractive IndustriesTransparency InitiativeRelevant forReducing

DiversionsofPublicRevenue?TheMozambicanExperience’,PolicyBriefing,61.Johannesburg:

SouthAfricanInstituteofInternationalAffairs,2013.


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