Natural Gas and Socio-Economic Transformation in Mozambique: Some Preliminary Evidence

The aim of this article is to extend the state of analysis on the impacts of gas development in Mozambique by evaluating the relationship between the gas sector, the Mozambican economy, and social change. As the resource curse framework is only limited to economic growth, this work utilizes two alternative frameworks—the Staples approach and the Linkages approach—that are melded into an institutional analysis, looking simultaneously at “benefits, costs, and uncertainties” or “blessings, uncertainties, and curses,” and used to conceptualize progress more widely to include not only growth, but other externalities and broader social change as applied to the case of Mozambique. In so doing, the evidence suggests that the natural gas industry in Mozambique has contributed to both the expansion in economic growth and social change. However, the positive experience with social change arises from direct intervention and not necessarily the result of the related economic growth. Indeed, in the process of economic growth, the production and export of natural gas in Mozambique have raised the possibility of major socio-economic and ecological dangers. Contrary to the theoretical criticism of spending windfall revenues on social services as wasteful, we argue that only strategic social and ecological expenditures of gas revenues can provide and increase the chances of the gas industry becoming transformational economically, socially, and ecologically. The article is organized as follows; the next section deals with conceptualizing the paper and describing the sources of data. This is followed by sections that present the results, a discussion of those results, and conclusions and policy implications from the study.

Publisher: International Research Center for Energy and Economic Development (ICEED)