187. Mozambique should further strengthen its frameworks for monetary and fiscal policy, based on the principles of transparency, stability, responsibility, fairness and efficiency. This, together with its status as a “donor darling”, should be used to deliver economic stability over the long term and as a lever to eradicate stubbornly high poverty levels. The APR Panel has every reason to believe that Mozambique is firmly pursuing this path. 2.5.3 Minerals, Land and Other Natural Resources 188. Mozambique, like many African countries, is blessed with considerable quantities of natural resources, especially mineral wealth. The country’s primary natural resources are coal, natural gas, mineral sands and probably oil. 189. Mozambique, unlike other African countries, is predominantly virgin territory, with most of the country’s natural resources yet untouched. The government is determined to change this through increased exploration and exploitation of its natural resources in order to contribute positively to growth and poverty reduction. 190. The rights to Mozambique’s minerals, including heavy metals, coal, natural gas and possible oil reserves, have been auctioned off to multinational companies at a rapid rate in recent years. For instance, the South African company Sasol is exporting natural gas from Inhambane province, while the Ireland-based firm Kenmare and the South African company Corridor Sands are mining titanium deposits in Gaza province, about 200 km north of the capital, Maputo. Moreover, an array of companies from Brazil, Canada, Italy, Malaysia, Norway and the USA are prospecting for oil reserves. 191. Care should be taken, given the consequences of mineral extraction in some developing countries. Australia, Botswana, Canada and Norway have managed to use their mineral wealth for the good of their economies and populations, but this has not necessarily been the case in countries such as Angola, Equatorial Guinea, Nigeria and the Sudan, where vast oil reserves have failed to improve the livelihoods of the majority of those countries’ inhabitants. 192. Available evidence shows that, when poorly managed, the relationship between a country’s natural resource wealth and GDP growth is negative. In such a case, natural resource wealth has no demonstrable relationship with a population’s overall wellbeing, as measured by the HDI. The negative effects of poorly managed mineral wealth on a country’s economy and population can inflate the local currency, making other enterprises less competitive in the international market. Fluctuations in the price of oil, gas and minerals can create a volatile exchange rate that often discourages FDI. Moreover, mineral revenue windfalls also have a tendency to encourage poor government policy and increase foreign debt. 85