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Mozambique borders Tanzania, Malawi, Zambia, Zimbabwe, South Africa, and Eswatini. Its long Indian Ocean coastline of 2,500 kilometers faces east to Madagascar.

About two-thirds of its estimated 33 million (2022) people live and work in rural areas. The country is endowed with ample resources of arable land, water, and energy, as well as mineral resources and newly discovered natural offshore gas; three deep seaports; and a relatively large potential pool of labor. It is also strategically located: four of the six countries it borders are landlocked and hence dependent on Mozambique as a conduit to global markets. Mozambique’s strong ties to the region’s economic engine, South Africa, underscore the importance of its economic, political, and social development to the stability and growth of southern Africa as a whole.

Political Context

The Front for the Liberation of Mozambique (Frelimo) and the Mozambican National Resistance (Renamo) remain the country’s main political forces, followed by the Mozambique Democratic Movement (MDM). Frelimo won in a landslide in both the 2019 presidential and legislative elections, securing a two-thirds majority in the national assembly. Frelimo also won provincial elections, held for the first time in the same year, thus appointing governors in all the country’s 10 provinces. The last municipal elections took place in 2018. Frelimo came up largely victorious in these too, winning 44 out of 53 cities and towns across the country. Renamo won eight municipalities in the central and northern, most populous provinces, while MDM retained its stronghold in the strategic, central port city of Beira. Mozambique will hold its sixth municipal elections in October 2023, marking the beginning of another electoral cycle that will culminate in the presidential, legislative, and provincial elections a year later in October 2024.

District elections, initially planned for 2024, are in doubt. As part of the peace deal to end hostilities with Renamo, and which constituted a condition for Renamo’s military wing disarmament (the Demobilization Disarmament and Reintegration [DDR]), an amendment to the constitution introduced elections at the district level for 2024. However, in December 2022, during his annual briefing at the Assembly of the Republic, the president of the republic announced the creation of a consultative group to assess the feasibility of district elections.

The Government pledges to complete its DDR efforts of Renamo’s residual forces. The DDR process has made substantial progress albeit at a slower pace. It is estimated that it has now reached over 80% of its completion rate, paving the way for a definitive peace and an effective end to hostilities and attacks, mostly against civilians, perpetrated by Renamo's residual forces over the years in the central region of Mozambique. 

Mozambique is still grappling with a military insurgency in parts of the gas-rich province of Cabo-Delgado; the four-year conflict has caused an estimated 4,000 deaths and displaced nearly one million people. About four million people are likely to face high levels of food insecurity as a result of the combined effects of climate shocks and the conflict, which is also threatening the economic potential of lucrative Liquified Natural Gas (LNG) investments in the area. The arrival of regional troops has helped stabilize the situation to a degree. The government approved a reconstruction plan for the province, as well as the Programa de Resiliência e Desenvolvimento Integrado do Norte de Moçambique (PREDIN). The latter is a short- to medium-term approach to conflict prevention and conflict mitigation, social cohesion, and resilience, intended for Cabo Delgado, Niassa, and Nampula provinces.

Challenges related to civic voice remain. The civic space in Mozambique has gone from “obstructed” to “repressive,” according to the latest CIVICUS Monitor Report. The Freedom House (2020) classified Mozambique as partly free since 1994, while the Economist Intelligence Unit (2020) notes in its Democracy Index 2019 report that Mozambique is slipping from a hybrid to an authoritarian system based on indicators for electoral process and pluralism, functioning of Government, political participation, political culture, and civil liberties. 

Economic Outlook

The economy is recovering from the protracted slowdown in recent years, with growth reaching 4.4% in the first half of 2022. Mozambique experienced its first economic contraction in nearly three decades in 2020, with an additional 250,000-300,000 urban people pushed into structurally high poverty levels. It is estimated that overall, more than 60% of people live in poverty and more than one million people have been displaced by the conflict in Cabo Delgado. The instability in Cabo Delgado has slowed expected outcomes from investments in the liquefied natural gas (LNG) sector, and currently one offshore project, with an investment of $7 billion has started production. Larger projects, more than $50 billion of investment, are expected to start production in 2026 and 2028, an almost two-year delay.

According to the 2023 World Bank’s Mozambique Economic Update report, the medium-term economic outlook is positive, with growth expected to accelerate to 6% over 2023-2025, driven by continued recovery in services, increased LNG production, and high commodity prices. Downside risks remain. The uncertain global recovery, the war in Ukraine, the low levels of human capital, and the country’s vulnerability to climate disasters, risk further limiting Mozambique’s options for diversifying sources of growth.

Development Challenges

Despite having one of the fastest growing economies in Sub-Saharan Africa from 2000-2015, job-creation, poverty reduction, and human capital accumulation are still limited, with most of the substantial wealth generated benefiting limited sections of the economy. With a human capital index of 0.36, extremely low levels of human capital are a structural constraint to rapid, inclusive, and sustainable growth in Mozambique. Basic services in education and health are unevenly delivered across the country, driving spatial inequalities, with limited mechanisms to protect the most vulnerable from the impacts of shocks, thus driving fragility, instability, and violence.

The lack of availability of good training and weak links between supply and demand compound a weak labor market and low productivity growth. Disempowerment among girls and women hinders growth through unfavorable levels of fertility, high child and maternal mortality, low levels of skills among women, and the poor productivity of women in the labor market.

Additional challenges include maintaining macroeconomic stability, considering the country’s exposure to commodity price fluctuations, and making further efforts to reestablish confidence through improved economic governance and increased transparency. Structural reforms are needed to support the struggling private sector. That, and diversifying the economy away from its focus on capital-intensive projects and low-productivity subsistence agriculture—while strengthening the key drivers of inclusion, such as improved quality of education and health service delivery—could in turn improve social indicators.

Last Updated: Mar 20, 2023

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Mozambique: Commitments by Fiscal Year (in millions of dollars)*

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Main Office Contact
Av. Kenneth Kaunda, 1224
Maputo, Mozambique
For general information and inquiries
Leonor Costa Neves
External Affairs Officer
+258 844032383
For project-related issues and complaints