IMF Continues to Back Gas, Despite the Resource Curse

Attempts to limit gas in Mozambique are “not sensible”, IMF representative in Mozambique, Alexis Meyer-Cirkel, said in an open briefing 23 November. “I think that this discussion, preventing Mozambique from developing this wealth, disproportionately penalises a country that has not contributed to the creation of the problem and that is a poorer country,” he stressed.

“Mozambique is a country that emits very little” carbon, in proportion to its population and in comparison to other countries in the world, he added.

The IMF has always promoted gas and other big resource projects in Mozambique, but Meyer- Cirkel went on to raise some questions. He showed the slide on the preceding page, predicting that in the post-Covid period African non-resource countries are recovering well, but resource countries are not.

African resource counties are predicted to lose 2.9% of per capital GDP between 2019 and 2022, while non-resource countries are expected to gain 3.8% of GDP – a huge difference. The reason, he explained, is that non-resource countries have more diversified and flexible economies and can better respond to difficulties.

This point was underlined the next day by a presentation at the annual UEM-Wider Inclusive Growth Conference. Fernando Lichucha from Universidade Eduardo Mondlane (UEM) showed that in 1992-6, agriculture accounted for half of Mozambican GDP growth. By 1997-2001 manufacturing was also important. But by 2012-16 growth was driven by services and the extractives, with manufacturing and agriculture having a tiny role. Yet more than 70% of the population still has agriculture as their main activity.

This, in turn, drives the widening inequality. Commerce, finance, services and “other” account for 58% of all people with secondary education, and 85% of all with higher education. So widening inequality is driven by a better educated elite in the services, finance and extractive sector.

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