Mozambique to Establish Sovereign Wealth Fund.

Mozambique is to join other African countries to create a sovereign wealth fund using revenues from its LNG exports. According to the country's finance minister, projections showed that at their peak in the 2040s, the state is expected to receive more than $6 billion a year from gas exports.

Why is it important: The country is gas-rich with 150tr cubic feet
(tcf) of proven natural gas discovered off the coast of northern Mozambique in
2010, resulting in growing international investors' interest in the huge
mineral wealth and its prospects. The Mozambique government intends to utilise
projected revenues to settle debts and grow the economy.

The bottom line: Mozambique started exporting LNG in November
last year. The prospect of a well-managed sovereign wealth fund opens the
opportunity for long-term investing that ensures portfolio diversification,
profitability and return on investment for state-owned resources which
ultimately leads to economic development.