Johannesburg, South Africa | – Mozambique must complete contract negotiations for the production of liquefied natural gas (LNG) and also fast track key structural reforms to maintain strong economic growth, the International Monetary Fund said this week.
The IMF forecasts the southern African nation’s economy to expand by 7.5 percent in 2014 from 7 percent the previous year, but said delays in implementing reforms to tax administration and public financial management could hurt medium-term growth.
The 2014 forecast is down from a previous projection of 8 percent. “Completion of the contract negotiations for the production of liquefied natural gas (LNG) is a critical milestone for the launch of this project, one of the largest in sub-Saharan Africa,” the IMF said in a statement.
Despite the heightened risks from an uncertain global outlook, Mozambique growth would remain strong in the medium term, boosted by natural resource and infrastructure investment, the IMF said.
Mozambican officials expect more than $30 billion will be invested initially in the natural gas sector to build capacity to produce 20 million tonnes per year of liquefied natural gas (LNG), with first exports due to start in 2018. U.S. oil major Anadarko Petroleum Corp and Italy’s Eni are already developing multi-billion-dollar LNG export projects in the country.
In December, Mozambique extended by over three months a licensing round for 15 new offshore and onshore blocks for gas and oil exploration and production.