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Maputo, Mozambique

Mozambique

Status
Meaningful progress
Joined
15 May 2009
Latest validation
2019
Latest data from
2016
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Overview and role of the EITI

Mozambique has seen significant economic growth between 2000 and 2015, due in part to the development of the country’s extractive resources. The mining sector – largely driven by exploitation of coal, graphite, gold and other metals – accounts for about 7% of the national GDP and 6% of the government’s revenues in 2019. However, the sector has seen a decline in recent years. Exploration and commercialisation of the country’s gas reserves are likely to increase the significance of its extractive sector to the national economy, and negotiations for the establishment of an LNG plant are underway.

Mozambique has been using the EITI process to improve transparency in the management of state-owned enterprises and to inform debate on subnational revenues and on legal and policy reforms.

Economic contribution of the extractive industries

6%
to government revenues
30%
to exports
7%
to GDP
  • Step 1
  • Step 2
  • Step 3

Download country data

Download open data on government and company revenues, revenues by revenue stream and indicator, summary data and more.


Innovations and policy reforms

  • EITI reporting has shown discrepancies in allocations of extractive revenues to communities and a lack of clarity around the revenue sharing formula and criteria. This has contributed to national debate on the need for legal reforms.
  • Mozambique EITI has contributed to disclosures of cost recovery audits for natural gas projects.
  • Mozambique is using the EITI platform to conduct a study on the oversight of state-owned enterprises participating in the extractive sector.
  • The EITI has contributed to the disclosure of Mozambique’s mining and oil and gas contracts.

Extractive sector data

Production and exports

Crude Oil

Revenue collection

Level of detail 2

Revenue distribution

2016
Standardised revenue types

Top paying companies

2016

Extractive sector management

Tax and legal framework

Mozambique’s mining sector is governed by the Mining Law while its oil and gas sector is governed by the Petroleum Law. The sector is regulated by the National Mining Institute (INAMI), which regulates the exploration, processing, export and import of minerals, and the National Petroleum Institute (INP), which administers oil and gas activities and grants licenses.

The Ministry of Economy and Finance (MEF) collects tax revenue through the Tax Authority, in accordance with the Tax Law.

Licenses and contracts

Mining rights are awarded on a first come first served basis. The law also allows the government to hold a public tender for mining activities and operations. Production sharing agreements define the conditions for hydrocarbon exploration and extraction and are obtained through competitive bidding and direct negotiations.

Both mining and oil and gas contracts are publicly disclosed in Mozambique as mandated by the law.

Beneficial ownership

Mozambique does not have a legal framework mandating the disclosure of beneficial ownership. While the government has a company registry, the latter is not fully electronic, accessible or centralised, as data is collected and held at the provincial level.

The government is working on developing legislation to allow for the consistent collection of information on beneficial owners through the company register.

Revenue distribution

According to the law, a portion of extractive revenues are to be channelled to the development of communities in areas that host extractive activities. The amount varies per year as determined in the state budget and was set at 2.75% for 2019, according to the latest EITI reporting.


EITI implementation

Governance

Mozambique EITI is administered by the Mozambique Multi-Stakeholder Group (MSG), also known as the Coordinating Committee, which is hosted by the Minister of Mineral Resources and Energy. The President of the Coordinating Committee is the Minister of Energy and Mineral Resources, Hon. Enersto Max Tonela.

Validation

Mozambique was found to have made meaningful progress with considerable improvements in implementing the 2016 EITI Standard in October 2019, following its second Validation. Mozambique has fully addressed six of the 19 corrective actions identified in its previous Validation. The next Validation is expected to commence in July 2022.

Timeline

Scorecard

Latest Validation: 16 October 2019
Year

Assessment of EITI requirements

  • Not met
  • Partly met
  • Mostly met
  • Fully met
  • Exceeded
Scorecard by requirement View more Assessment View more

Overall Progress

MSG oversight

1.1Government engagement

Minister of Mineral Resources and Energy Max Tonela and his predecessor Leticia Klemens have demonstrated active engagement in the EITI. Implementation is more embedded into government agencies and their discussions than before.

1.2Industry engagement

The challenges appear to be largely the same as identified in the first Validation. Companies do not appear to be fully, actively and effectively engaging in the design, implementation and monitoring of EITI implementation. Communication on the EITI within the constituency is weak.

1.3Civil society engagement

Civil society is fully, actively and effectively engaged in the EITI process and has contributed significantly to EITI implementation in Mozambique. Civil society representatives’ ability to participate in the EITI process does not appear to have been restricted or affected by the legal, regulatory, administrative and actual environment. Civil sociery has played an active role in overseeing the EITI reporting process and contributing to public debate related to extractive sector governance.

1.4MSG governance

The MSG consists of self-appointed representatives from each constituency and functions in an equitable, inclusive manner. The constituencies are adequately represented, although participationby companies continues to be limited (see Requirement 1.2). Civil society and government representatives appear to communicate and coordinate on the EITI with their broader constituencies.

1.5Work plan

The MSG has agreed a work plan which reflects the national priorities for the sector, and there is evidence of progress in more clearly articulating the objectives of EITI implementation.

Licenses and contracts

2.1Legal framework

The 2013-14 EITI Report provides a summary description of the fiscal regime, including the level of fiscal devolution, an overview of the relevant laws and regulations, and information on the roles and responsibilities of the relevant government agencies involved in the governance of the petroleum and mining sectors.

2.2License allocations

The process for awarding licenses is comprehensively disclosed, and the Secretariat commends the EITI Report for critically assessing the licensing framework and for making recommendations to address deficiencies. However, the report does not include a list of licenses awarded and transferred in the period under review, and the license cadastre does not allow the user to search for licenses by award or transfer date.

2.3License register

The mining cadastre includes detailed information on mining licenses. Required data points for petroleum licenses are available on the INP website.

2.4Policy on contract disclosure

The 2013-14 EITI Report outlines the government’s policy on contract transparency as mandated by the 2014 Petroleum and Mining Laws, as well as actual practice.

2.5Beneficial ownership

Not assessed

Implementing countries are not yet required to address beneficial ownership and progress with this requirement does not yet have any implications for a country’s EITI status. Stakeholders from civil society and industry expressed interest in making ownership information transparent.

2.6State participation

The 2015-2016 EITI Report discloses the level of state ownership and describes state participation in general terms. However, the policy defining the financial relationship between the state and extractive sector SOEs remains unclear and practices are only partly covered.

Monitoring production

3.1Exploration data

The 2013-14 EITI Report includes a comprehensive overview of both the mining and oil and hydrocarbon sector, including reserves, new development projects and ongoing exploration activities.

3.2Production data

The 2013-14 EITI Report includes information on production values and volumes, and has attempted to obtain information disaggregated by company through the EITI reporting process.

3.3Export data

The 2013-14 EITI Report includes information on production values and volumes, and has attempted to obtain information disaggregated by company through the EITI reporting process.

Revenue collection

4.1Comprehensiveness

The comprehensiveness of reconciliation of 2015-2016 data cannot be reliably assessed as total government revenues from the extractive sector are unknown and the rationale behind materiality decisions is not disclosed.

4.2In-kind revenues

The 2015-2016 EITI Report and the Administrative Court’s report include comprehensive information about gas royalties paid in-kind. However, the value of proceeds from the sale of in-kind gas revenues in 2015-2016 is not clear. There are also discrepancies between the information disclosed in the EITI Report and that provided in the MSG’s feedbac kon the draft assessment.

4.3Barter agreements

The 2015-2016 EITI Report attempts to address the requirement regarding agreements concluded in the period underreview. However, the terms of these agreements are not detailed, and it remains unclear whether they actually contain infrastructure or barter provisionsin exchange for oil, gas or mining concessions. Stakeholder consultations suggest that agreements that fall under the requirement do not exist in Mozambique, which could indicate that the requirement is not applicable. However, the MSG does not appear to havethoroughlydiscussed the matter or investigated the agreements presented in the EITI Report.

4.4Transportation revenues

The report describes thoroughly the actors involved in the transportation of gas and coal, changes in ownership structuresand transportation routes. The Secretariat considers that ROMPCO’s revenues from the transport of gas are not government revenue as such, but any material revenues that CMG as an SOE receives from its shareholding in ROMPCO are transportation revenues as defined in Requirement 4.4. The information in to included ibn the 2015-2016 EITI Report but was subsequently disclosed.

4.5SOE transactions

The 2015-2016 EITI Report discloses payments from SOEs to government entities in material revenue streams. However, the report does not disclose transaction between SOEs and their subsidiaries. It remains unclear, whether the National Directorate of Treasury (DNT) received dividends from extractive companies, as it was not a reporting entity.

4.6Direct subnational payments

The materiality of subnational payments by extractive companies remains unclear.

4.7Disaggregation

The 2013-14 EITI Report contains financial data disaggregated by individual company and revenue flow. The data is not explicitly disaggregated by government entity, although it indicates which entity receives each revenue stream.

4.8Data timeliness

The 2013-14 EITI Report was published less than one year following the end of the latest financial year covered by the report.

4.9Data quality

Discrepancies in the 2015-2016 EITI Report were not material, and at least company data appears to be backed by agreed assurances. However, the report does not include an assessment of the reliability of financial data or document companies’ compliance with agreed assurances. It is unclear whether any assurances were requested from government entities. The report does not provide an overview of the audit practices of reporting entities.

Revenue allocation

5.1Distribution of revenues

The 2015-2016 EITI Report discloses which revenues are recorded in the national budget and describes the allocation of revenues that are not.

5.2Subnational transfers

Details about actual transfers are disclosed,and efforts to reconcile the data and include information about the use of funds are commendable. The report demonstrates that transfers corresponded to the budgeted amounts. However, it remains unclear whether actual transfers represent 2.75% of the collected production tax in the base year and how the portion transferred to each community is calculated.

5.3Revenue management and expenditures

Not assessed

The 2013-14 EITI Report includes a description on allocation of revenue from extractives for specific programs and geographic regions. There is no additional information such as projected production, commodity prices and revenue forecasts. Reporting on revenue management and expenditures is encouraged but not required by the EITI Standard and progress with this requirement will not have any implications for a country’s EITI status.

Socio-economic contribution

6.1Mandatory social expenditures

The 2015-2016 EITI Report clearly differentiates between mandatory and voluntary social expenditures. However, it is unclear whether disclosures of mandatory social expenditures in the EITI Report are comprehensive.The legal basis for mandatory expenditures isunclear. The report does not disclose beneficiaries of mandatory social contributions nor whether the contributions were made in cash or in kind.

6.2Quasi-fiscal expenditures

There is no indication that SOEs currently undertake quasi-fiscal expenditures (QFEs).However, the lack of QFEs in the year under review could not be confirmedand the MSG does not appear to have undertaken a comprehensive review of QFEs as part of preparations for the 2015-2016 EITI Report.

6.3Economic contribution

The 2015-2016 EITI Report discloses information about the extractive sector’s contribution to the GDP, exports and employment. However, inconsistencies between the EITI Report and other publicly accessible sources in total government revenue figures prevent a comprehensive understanding of the sector’s contribution to the economy.

Outcomes and impact

7.1Public debate

The MSG is undertaking efforts to ensure that EITI implementation is contributing to public debate. Especially civil societyhasanalysedthe data and conductedoutreach across the country. Providing comprehensive and timely information onissues of broad public interest, such as state participation in the extractive sector, could result in further debate. The interim national secretariat’s efforts to engage with parliamentarians are encouraging. However, EITI data is not published in open format, which makes it more difficult to analyse. The lack of financial resources is limiting the MSG’s efforts to communicate findings from the report.

7.2Data accessibility

EITI Mozambique has made various efforts to make data available such as producing summary briefs and brochures. However, all EITI Reports published by Mozambique EITI are in PDF format and are not machine-readable which makes accessibility to data files challenging.

7.3Follow up on recommendations

There is no documentation of the MSG systematically following up on recommendations from the 2015-2016 EITI Report. However, the MSG and individual constituencies have considered recommendations and acted upon lessons learnt from EITI reporting and the first Validation.The identified weaknesses and opportunities are reflected in work plans.

7.4Outcomes and impact of implementation

The multi-stakeholder group (MSG) has reviewed the outcomes and impact of EITI implementation on natural resource governance through the production of annual progress reports.


Key documents


Contacts