Mozambique’s Oil and Gas Paradox: Governance and Inclusive Development
Resource wealth does not automatically deliver socioeconomic progress, particularly where governance structures are weak, and historic inequalities persist. Exploring the Nexus Between Oil and Gas Investments and Development in Mozambique examines how the country’s vast natural gas reserves, especially in the Rovuma Basin, have attracted major international investment but are yet to generate broad-based development gains. Instead, longstanding governance challenges, inequality, and political instability continue to shape how resource revenues are distributed, reinforcing concerns about the “resource curse,” where natural wealth fails to deliver inclusive growth.
The report highlights how Mozambique’s heavy dependence on extractives has been accompanied by corruption risks, governance instability, and widening inequality. In regions such as Cabo Delgado, where most gas projects are concentrated, local communities have seen limited benefits, with many gains going to multinational corporations and political elites. Expected outcomes including job creation, industrial diversification, improved infrastructure, and better public services, have fallen short. Weak public finance management and debt sustainability concerns, including the legacy of hidden liabilities, have further constrained the country’s ability to convert resource revenues into tangible development outcomes.
Despite years of exploration and the promise of liquefied natural gas revenues, poverty, unemployment, and regional disparities persist. In some gas-producing areas, communities have even lost access to traditional livelihoods such as fishing and farming, while infrastructure and service delivery remain inadequate. This highlights a central finding of the report: Oil and gas investment alone does not guarantee inclusive development. Without strong transparency, accountability, and fair revenue-sharing frameworks, resource wealth risks entrenching elite capture and perpetuating inequality.
To address these challenges, the report recommends strengthening downstream industries and diversifying the economy to reduce reliance on raw gas exports. Enhancing local content policies, building domestic technical capacity, and ensuring Mozambican participation across supply chains are critical to broadening benefits. Equally important are strong governance reforms, transparent contract management, and accountable use of revenues for essentials such as health, education, and infrastructure. Investment in renewable energy alongside hydrocarbons is also encouraged to promote long-term resilience.
In conclusion, the report underscores that Mozambique can only translate its natural gas wealth into broad-based development through strengthened institutions, transparent fiscal governance, and inclusive policy frameworks. While the country has taken important steps such as establishing a Sovereign Wealth Fund to manage and stabilise future revenues, drawing lessons from peers like Ghana, these measures must be supported by sustained transparency, accountability, and effective implementation.
By Emmaculate Awuor, Campaigns & Communication.
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