Mozambique parliament adds $56mn of gas revenue to 2026 budget

Mozambique’s parliament approved a MZN3.5746bn ($55.9mn) increase to the 2026 state budget on October 24, allocating previously collected natural gas revenues to roads, flood recovery, damaged public buildings and a parliamentary complex amid opposition concerns over spending priorities and implementation deadlines.

The amendment to the Economic and Social Plan and State Budget (PESOE) passed by 164 votes to 62 during an extraordinary session in Maputo attended by 226 of the 250 deputies. The governing Frelimo party supported the measure, while Podemos, Renamo and the Democratic Movement of Mozambique (MDM) opposed it, Diário Económico reported on October 25, citing Portuguese news agency Lusa.

The revision incorporates unspent Rovuma Basin gas revenues carried forward from the previous financial year and held in the transitional account of Mozambique’s sovereign wealth fund. It does not represent additional gas revenue collected in 2026. The amendment more than doubles the oil and gas revenue allocated to the 2026 budget, to MZN6.518bn from MZN2.9434bn, according to details released by parliament’s standing committee and reported by Notícias.

Under the sovereign wealth fund framework approved by parliament in December 2023, 60% of revenue from the first 15 years of gas production in the Rovuma Basin’s Areas 1 and 4 goes to the state budget and 40% to the fund. Louveira said in May that Mozambique expected $76.8mn in gas revenue in 2026, down from $79.2mn in 2025. Most current output comes from the Coral South floating LNG platform operated by Eni (BIT:ENI), and the $7.2bn Coral North platform is due to double production from 2028.

Finance Minister Carla Louveira said MZN1.2bn would finance road and bridge rehabilitation, MZN1.1746bn reconstruction following the 2026 floods, and MZN700mn the restoration of public buildings damaged during the 2024–2025 post-election unrest.

A further MZN500mn, approximately 14% of the additional allocation, is earmarked for the planned parliamentary complex in Mocuba, Zambézia province, according to O País. Construction is expected to take about two years, with the foundation stone due to be laid in the coming days, state news agency AIM reported. The project was already included in government planning, and the allocation does not represent its total construction cost.

Louveira said the additional spending would be financed from available domestic resources without new borrowing.

Total budgeted expenditure rises from MZN520.6342bn to MZN524.2088bn, equivalent to 32.1% of GDP, while domestic resources increase from MZN442.9527bn to MZN446.5273bn, or 27.3% of GDP.

The revision adds approximately 0.7% to previously planned expenditure. Because domestic resources and spending increase by the same amount, their nominal difference remains unchanged, although that calculation does not by itself establish the government’s fiscal deficit.

The government initially approved the proposed amendment on May 26 to support public investment and reconstruction following floods and post-election disturbances.

Opposition lawmakers questioned whether the additional allocations could be contracted and spent effectively before year-end. MDM deputy Judite Macuácua argued that the remaining two months were insufficient for procurement procedures, while Renamo deputy Glória Salvador said outstanding payments to teachers, contractors and suppliers should take priority. Podemos, the largest opposition party, said its position was not one of automatic rejection but called for the funds to be distributed according to transparent criteria, AIM reported.

The concerns follow weak execution of previously approved gas-funded investments. Mozambique spent MZN1.0999bn, or 37.37%, of the MZN2.9434bn allocated to strategic projects financed by Rovuma gas revenues during the first half of 2026, according to government figures reported by Carta de Moçambique.

That execution rate concerns earlier allocations, not the spending authorised on October 24. Parliamentary approval permits the revised expenditure, but does not establish that the projects have been contracted or the funds disbursed.

Parliament’s final ordinary session of the year opens on October 28 and runs until December, with the proposed 2027 budget and the government’s 2025 financial accounts also on the agenda.

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