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Ambassador Peter H. Vrooman’s Remarks for Parliamentary Retreat on Sovereign Wealth Fund
4 MINUTE READ
February 27, 2023

Friday, February 24, 2023

Bilene

Honorable Mr. Niquice, valued partners from the National Assembly and civil society, distinguished guests:

We all know that Mozambique’s vast natural wealth has the potential to utterly transform its economy.  New revenues could improve the delivery of services such as health care and education for millions of Mozambicans, pay for the construction or reconstruction of durable infrastructure, and prepare the country to mitigate the effects of climate change.

We are gathered here because we share a common goal.  Whether we represent the National Assembly of Mozambique, Mozambique’s vibrant civil society, or a dedicated international partner like the United States, we all want Mozambique’s future to be more prosperous and resilient.

Many countries blessed with natural resources have failed to utilize their resources in a sustainable, transparent way.  In some cases, the blessing of natural wealth has become a curse as they were plagued by inflation, corruption, instability, market volatility, and even civil unrest.

But many places have turned natural wealth into lasting, reliable funds that support long-term growth and development and yield concrete benefits for citizens.  In 1982, voters in the U.S. state of Alabama approved the creation of a trust fund to capture revenues and royalties from natural gas.  For decades, the Alabama Trust Fund has been used to pay for state infrastructure, health care, public safety, and wildlife conservation.

Closer to home, Botswana invests a portion of its revenue from diamond exports in its successful Pula Fund.  The Pula Fund was structured in accordance with the Santiago Principles.  Detailed information about the fund is published every month online and in the government gazette, and the fund is audited every year.  With this commitment to transparency and accountability, citizens of Botswana can trust that the Pula Fund is being administered for their benefit.

Perhaps the biggest challenge you all face is how to structure Mozambique’s Sovereign Wealth Fund to make it transparent, independently managed, and free of political influence.  A successful law will need to clearly delineate responsibilities and authorities so that the managers of the fund are accountable to the Mozambican people.

If you will permit me a short illustration – imagine we have a great treasure, and the rightful owners of the treasure have asked us to design a box to keep it safe.  If we build a strong box and put three locks on it, then hand all three keys to the same person, there’s a real risk that people will not trust the safety of their investment – and rightly so.  To create trust, we should give the three keys to three different people who share responsibility for the treasure’s safety.  In this case, we should design a fund with independent management and oversight that prioritizes transparency by openly sharing accurate data with the public.

We encourage representatives of Parliament and civil society to work together to study international best practices, debate options, consult widely with stakeholders, and create a law that meets the needs of the Mozambican people. And after the law is passed, we hope that civil society, Parliament and other stakeholders will continue to work together to oversee its implementation in a transparent and accountable way.  And of course, the United States and other partners will continue to support Mozambique as it constructs a prosperous and stable future for all its citizens.

Estamos juntos.  Muito Obrigado.