From conflict and long deferred revenues to falling gas demand, there are many reasons to believe Mozambique’s LNG deal has become a liability.
Maputo, Mozambique | AFRICAN ARGUMENTS | Ever since major natural gas deposits were discovered off Mozambique’s northern coast in 2010, there have been high expectations that the find will bring economic prosperity to the country.
In 2016, for instance, an International Monetary Fund (IMF) report predicted that the export of liquid natural gas (LNG) would transform Mozambique’s economy. It projected a total revenue of $500 billion by 2045 and an average real GDP growth rate of about 24% between 2021 and 2025. For a country mired in debt and ranked as having the 181th lowest human development index in the world (out of 188), this was momentous.
14 years on from the discovery of gas, however, economic development in Mozambique has not improved. Rates of extreme poverty remained at 61-63% between 2016 and 2023. In fact, in Cabo Delgado, the province where LNG facilities are under construction, poverty has gotten worse.
Hope that natural gas will bring in vast sums of money and improve quality of life remains high in Mozambique. Yet people in many African countries have held similar hopes in extractive projects only to be left desperately disappointed.
Is it still reasonable for Mozambique to expect LNG to deliver massive economic development in the future, especially when the world is shifting away from fossil fuels.
From conflict and long deferred revenues to falling gas demand, there are many reasons to believe #Mozambique’s #LNG deal has become a liability.https://t.co/bATNdQobQV
— African Arguments (@africaarguments) February 28, 2024
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