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.
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’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.
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.
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.
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.