Mozambique could join Africa’s largest economies such as Nigeria and Angola by 2028 once its offshore natural gas , the biggest ever discovered on the continent, reaches full production capacity as planned, the International Monetary Fund (IMF) said in recent report.
According to the IMF the economy of one of the poorest countries in the world could grow by an annual 24 percent between 2021 and 2025, before slowing down to about 3 to 4 percent by 2028.
“After liquefied natural gas production reaches its peak level in 2028, with the final liquefaction train starting operation, the real gross domestic product growth will moderate to 3 percent to 4 percent,” the IMF predicted.
In 2010, The country discovered an estimated 180 trillion cubic feet of natural gas — equivalent to the entire gas reserve of Nigeria — in Rovuma Basin in the Cabo Delgado province.
The southern African nation might become the world’s third-biggest liquefied natural gas exporter after Qatar and Australia once gas production hits its peak.
US company Anadarko and Italy’s ENI are currently developing plans to build Liquefied Natural Gas (LNG) plants worth hundreds of billion dollars to market the gas.
IMF prediction is based on expectation that the two operators will take their Final Investment Decisions (FID) by the middle of this year. However, the IMF acknowledges that gas prices have dropped substantially and further price decreases could pose risks to the viability of the planned liquefaction plants.
The fall in commodity prices has caused a cash crunch in Mozambique. Apart from natural gas, the nation’s other main exports are coal, cotton, sugar and aluminium, whose prices have fallen over several months.
“The volatility of oil and gas prices can restrain the development of a gas hub in Mozambique,” research firm Frost & Sullivan said in another report.