The first discoveries of natural gas in the Rovuma Basin, off the northern coast of Mozambique, were made in 2011. Due to the lack of local infrastructure and sufficient market, the discoveries will be developed and produced as a liquefied natural gas development. In recent years there has been an ongoing process to revise the Mozambican petroleum legal framework, with the new Petroleum Law being the first step.
Mozambique's most eagerly awaited legislative reform of modern times is finally underway with the enactment and entry into force of the new Commercial Code. After many years of indecision and setbacks, the government has finally approved a statute which replaces most of the country's pre and post-independence company and commercial legislation.
As part of the ongoing reworking of the legislation governing the mining sector, a new set of Marketing Regulations for Mineral Products was recently approved by the Council of Ministers. The main purpose of this new decree is to define the rules which apply to the trade in mineral products, as well as the terms and conditions of the licensing procedure for entities wishing to conduct such business.
The government of Mozambique recognizes the importance of electrification for the welfare of the population and the economic growth of the country. Regulations are being drafted to further the development of the country's energy sector; the liberalization of the electricity distribution and transmission markets should encourage foreign investors to play a part in this development.
Despite the country's significant hydropower potential, only 7% of Mozambique households have access to electricity. To remedy this situation, major plans are underway to develop the country's electricity sector at all levels, the most important of which is the World Bank-sponsored Energy Reform and Access Programme.
As part of the ongoing reform of the petroleum exploration and production legislation, the government has approved a set of new Petroleum Production Tax (Royalty) Regulations. The regulations set out fixed tax rates for the production of crude oil and natural gas, and clarify the tax treatment of non-resident oil service contractors and subcontractors.
The privatization framework was recently revised in a decisive move to attract more private investment to certain sectors and companies which were previously in state hands. The business community is eagerly awaiting the implementation of the programme and the arrival of foreign players who are willing to avail of the new commercial opportunities.
In a country with limited financial resources, where until recently only 5% of the population benefited from electricity, private enterprise could play an important role in electrification. As a result, the government has been particularly active in searching for legal mechanisms to attract private companies, in particular foreign investors, to the domestic electricity sector.
The government recently approved a new set of licensing regulations with the aim of streamlining procedures for the licensing of manufacturing activities. The new regulations govern the requirements and procedures for the licensing of all types of manufacturing activity, irrespective of business sector, and aim to minimize bureaucracy and speed up the procedure.
The long-awaited Petroleum Operations Regulations will provide further guidance and clarity on how to negotiate petroleum concessions with the government. However, another step needed to attract more international players to Mozambique remains outstanding - the special tax and customs regime for petroleum operations.
The Bank of Mozambique has approved new regulations setting out a new legal framework which reflects the dynamics of the modern Mozambique Interbank Money Market, and which introduces new means of communication between the Bank of Mozambique and the institutions authorized to participate in the market.
A wholesale reform of the legal framework governing the exploitation of national mineral resources is underway in order to attract foreign investment in Mozambique's natural resources. However, a full assessment of the government's commitment to this effort will only be possible once the new Special Tax Regime for Mining has been enacted.
Mozambique recently enacted legislation that aims to curb money-laundering activities, continuing a trend towards making its financial system more modern and transparent. While it is too soon to draw conclusions as to whether the new legislation will be enforced successfully, the initial signs are encouraging.