A sovereign wealth fund in Mauritania and Anadarko announcing its final investment decision for Mozambique are actions from June 18 that may emerge to become significant factors impacting geomarket developments in Africa.
Mauritania: Presidential candidate Mohamed Ould El Ghazouani stated his government would establish a sovereign wealth fund to manage proceeds from the country’s nascent hydrocarbons industry.
Significance: El Ghazouani is the ruling Union for the Republic’s presidential candidate standing for election on June 22. The currently serving defense minister was selected by the ruling party to ensure regime continuity for the post-Mohamed Ould Abdel Aziz presidency. Given Mauritania’s rising geopolitical outlook thanks to significant investment pledges made to develop the country’s offshore hydrocarbons deposits, there have been concerns for domestic instability informed by clan-based competition to control extractive resource-derived patronage. By potentially placing some of the hydrocarbons revenues in an independently and professionally managed sovereign wealth fund not only would the government expect to receive market-priced investment returns but mitigate domestic threats fearing the new government is monopolizing these crucial revenues.
Mozambique: The CEO of Anadarko announced the company’s final investment decision for it’s liquified natural gas project for Mozambique.
Significance: The final investment decision formally inaugurates the estimated $25 billion liquified natural gas project that is intended to produce almost thirteen million tonnes per year of output by 2024. The Anadarko-led investment will redouble pressure on the Mozambique government to ensure a transparent regulatory and fiscal regime as well as secure security environment, both of which have been challenged by the government’s political opposition and local area Islamist militant insecurity in Cabo Delgado province where the Anadarko project will be housed.