Oil and gas prices have been on a steady decline over the years, creating major concerns for global leaders. But for Mozambique, there’s hope during these turbulent times as an estimated 20 billion barrels of natural gas has been found off its coast.
The country sits seventh on the table of poorest countries in the world and has an undisclosed debt worth $1.4 billion (10.7% of GDP), but this discovery could add $39 billion dollars to its economy by 2035, according to a Standard Bank estimation in 2015.
Although only a fraction of the reserves of a country like Russia, which has more than 48.7 trillion barrels, Mozambique’s 20 billion barrels raises its energy profile to rank as the seventh largest reserve in Africa.
The nation emerged as a giant in natural gas in 2012 when 85 trillion cubic feet of natural gas was found in the Rovuma basin, which has been described as “one of the largest gas finds in years.”
The economies of African oil producing countries have felt the impact of the collapse of oil prices. Christine Lagarde, managing director of the International Monetary Fund, expressed her worries about the fate of low-income oil producers like Nigeria.
“That’s a country that is facing… a real hardship and a necessity to very promptly redesign its business model and realign its interests with a completely new reality,” she said in a 2016 interview on the sidelines of the Albright Institute at Wellesley College.