Mozambique’s Extractive Riches: Will They Be a Game Changer and the Road to Prosperity, or Another Chapter in the Resource Curse?

On the south-eastern coast of Africa, Mozambique is a country of extraordinary natural beauty and cultural diversity. While its natural riches have been known to the world for centuries, it is only recently that the discovery of extensive gas reserves and coal deposits have drawn the attention of foreign investors and spurred the expansion of essential infrastructure and the review of outdated and inadequate legislation and institutions. As one of the least developed countries in the world, Mozambique faces significant challenges to bring these resources safely and sustainably to market, and to manage the resulting funds. In the aftermath of independence and a devastating civil war, the country has already made significant progress to build social stability, and begin to lift its population out of poverty. However, much work remains – and while extractives offer opportunities for prosperity and growth, the influence of multinational corporations, donors and international organizations (each with competing interests) has served to complicate an already complex environment.

The Capstone team, consisting of SIPA and Columbia Law School students, has reviewed Mozambique’s unique economic, legal, institutional, environmental, and social context to assess the potential impact of the extractive industry (both positive and negative). Through consultation, research and interviews, the team has drawn on the experiences of other countries to formulate a number of specific and implementable recommendations that will help Mozambique to mitigate the risks and maximize the benefits of extractives development. The team’s particular focus has been to harness the existing strengths and potential within Mozambique civil society and government, and to prioritize key areas of reform such as education/capacity building, managing resettlement of communities, and the creation of a sovereign wealth fund and thereby avoid the all too common excesses of the now well known resource curse. 

Press Release:

SIPA News (http://new.sipa.columbia.edu/news-center/article/capstone-13-mozambique-governance-watch)