The 2011 discovery of a major
off-shore gas field, combined
with extensive coal reserves
inland, has prompted some to
suggest that Mozambique, one of
the world's poorest countries, has
hit the jackpot.
The gas is thought to be worth an
estimated $350bn (£233bn) while
projections predict that from 2015
the country could produce 100
million tonnes a year, putting it just
outside the top 10 producers in the
world.
Such riches, for a country with an
economy that produces just $26bn
(£17bn) a year and is rebuilding
itself after a 16-year brutal civil war
that ended in 1992, does sound
promising.
It is certainly enough to make a
difference to Mozambique, which
has bumped along the bottom of a
range of indices measuring poverty,
health and education for decades.
But turning those resources into
riches is not straightforward.
Two paths
Consider the contrasting
experiences of Norway and Nigeria,
two nations that made major oil
finds in the 1960s.
Today, Norway exports six times
more energy than it consumes and,
per capita, is one of the richest
countries in the world.
Nigeria, by contrast, still imports
energy and at least $400bn
(£266bn) of oil revenue is thought
to have been stolen or misspent
since independence in 1960.
It remains one of the poorest
nations on the planet.
It is an unfair comparison in many
ways, but one that nevertheless
starkly illustrates the fact that an
abundance of natural resources does
not automatically lead to wealth and
prosperity.
The main reason for the disparity is
of course their relative wealth.
While Norway was already rich
enough to pay for the expertise and
infrastructure development needed
to drive its nascent oil industry
Nigeria had to rely on multinational
companies to pay these costs.
Norway also set up a sovereign fund
to reinvest and save for the post-oil
future. It is now worth 40% more
than Norway's entire economy.
As a result much of the resulting
profits went to those who provided
the necessary investment.
Like many developing countries,
Mozambique finds itself in a similar
position.
Extracting gas from an off-shore
gas field is expensive and time
consuming. It can take a decade
before off-shore gas can be
extracted from a new field.
Mozambique is only expected to gain
around $20bn (£13bn) during the
lifetime of the 100 trillion cubic feet
(2.8 trillion cubic metres) of gas
discovered.
That is less than 10% of its
estimated $350bn (£233bn) total
value.
Industry experts say such a paltry
sum is consistent with what a
developing country would expect to
receive, given the high level of
outside investment.
Sebastien Marlier, an analyst at the
Economist Intelligence Unit who
tracks developments in Mozambique,
is not confident that the country will
be East Africa's Norway.
"I think Mozambique will have a very
hard time reaching the standards
set by Norway," says the economist.
The challenges are immense. To
properly exploit the resources
underground, Mozambique needs a
solid infrastructure, expertise and
above all, a competent, honest
government.
"Corruption has become a major
concern in Mozambique," says Mr
Marlier.
"A small elite associated with the
ruling party and with strong business
interests, dominates the economy."
Concerns focus on the way mining
and exploration licences are agreed
between the government and
multinational companies that have
been queuing up to buy into the
boom.
The licences are effectively a right
to exploit a find and, and once
bought, can be traded.
Depending on market conditions,
their price can rise dramatically, or
indeed fall. Early buyers stand to
make a profit if the finds turn out to
be more valuable than first thought.
Furthermore, many multinational
firms operating in Mozambique
secured tax exemptions for up to 15
years.
When they bought the licences, in
some cases more than a decade ago,
the country was considered to be
such a high risk prospect that
strong incentives were needed to
attract investment.
If capital gains taxes had been paid
on the 2011 sale of the Benga coal
mine by Riverdale to Rio Tinto for $
3.8bn (£2.5bn) Mozambique would
have netted hundreds of millions of
dollars.

m.bbc.co.uk/news/world-africa-22008933