Mozambique Economy

By | October 1, 2021


Despite its rich resources, Mozambique experienced an economic decline with independence. After the civil war, which largely devastated the country, and years of socialist planned economy, the market economy reorientation began to show its first successes in the early 1990s. Mozambique suffered a major setback from the devastating floods in 2000/01 and 2019. Large parts of the infrastructure were destroyed and thousands of people lost their livelihoods. To support the economic fresh start and to fight poverty, Mozambique was one of the first countries to participate in the HIPC initiative (Heavily Indebted Poor Countries; developing countries ) $ 4.3 billion foreign debt canceled. With the help of large foreign investments, an export-oriented industrial sector has emerged, which has enabled Mozambique to grow at an average of 6 to 8% (2018: 5.3%) in recent years. Mozambique is still one of the poorest countries on earth. Most of the population still lives from agriculture and activities in the informal sector. Around a quarter of the state budget is still financed by development aid.

Foreign trade: For years, imports have not been covered by exports (import value 2017: 5.7 billion US $; export value: 4.7 billion US $). When it comes to exports, aluminum, electricity, natural gas, tobacco, shrimp, sugar, cotton and cashew nuts dominate. Mainly machines, vehicles, fuels and grain are imported. The most important trading partners are the Republic of South Africa, China, India and the Netherlands.


According to smber, the second most important branch of the economy (after the service sector) is the agricultural sector with a share of the gross domestic product (GDP) of (2017) 21.8%. Three quarters of the population live on small farms, usually subsistence farming. The most important staple foods are cassava, corn, millet, potatoes, sweet potatoes and rice. For export, tobacco, cashew nuts, sugar cane, cotton, tea, sisal, coconut palms (copra) and citrus fruits are mainly grown on state farms and plantations run by foreigners. Drought disasters, but also floods, often cause major crop failures; therefore, food has to be imported to supply the population. Because of the spread of the tsetse fly, cattle farming is not very well developed.

Forestry: Around 48% of the country’s area is designated as forest area. Almost 90% of the logs are used as firewood, lumber and construction timber are exported (the main customer is the Republic of South Africa).

Fisheries: Only after independence in 1975 did the development of the fishing industry begin and in 1976 the fishing zone was expanded to 200 nautical miles off the coast. The EU is granted fishing rights in exchange for foreign exchange. The most important national export goods are shrimp.

Natural resources

Mozambique has a variety of natural resources. Currently only natural gas, coal, salt and bauxite are mined to a significant extent. The remaining occurrences include copper, iron and manganese ore, tantalite, zirconium, uranium, nickel, gold, titanium and precious stones are still rarely used, but are attracting increasing attention from international investors. Major projects include the development of the Pande natural gas fields in the center of the country, including an approximately 900 km long natural gas pipeline to the Republic of South Africa, and the extraction of titanium sands in the provinces of Nampula and Gaza.

Energy industry

Mozambique has great hydropower potential. After the restoration of the Cabora Bassa Dam on the Zambezi and the power lines, Mozambique can once again supply electricity to the Republic of South Africa and Zimbabwe.


The manufacturing industry has a share of (2017) 17.6% of GDP. The most important branch of industry is metal smelting. Further areas are the processing of agricultural products (cotton ginning, sugar refineries, peeling systems for cashew nuts, mills), the food and luxury goods industry, the production of consumer goods and cement. Important industrial locations are the Maputo area (including MOZAL aluminum smelter [ Maputo corridor ] and oil refinery) and Beira (chemical, food, textile, wood processing). The large companies are mostly foreign owned.


The service sector generated 54.2% of GDP (2017) and employed 22.4% of the workforce. This economic sector generates its greatest sales in the areas of trade and transit traffic.

Tourism: Tourism is still underdeveloped, but it is showing high growth rates. In 2017 around 1.4 million foreign visitors came (mainly from Eastern and Southern Africa). Tourist attractions are the national parks and animal reserves, the port city of Mozambique on the coral island of the same name with its colonial buildings (UNESCO World Heritage Site since 1991) and the capital Maputo. Southern Mozambique was a traditional holiday destination for white South Africans until the country’s independence. Many hotels and beaches have been restored or newly built in recent years.


Mozambique is an important transit country for its neighbors, Malawi, Zambia, Zimbabwe and Eswatini, which are cut off from the sea. For this reason, programs worth millions were started in the 1990s as part of the economic reconstruction in order to restore the transport routes of the country that had been destroyed in the civil war. However, much of the progress was undone by the flood disasters of 2000/01 and 2019. The railway network has connections to Zimbabwe, Malawi, Eswatini and the Republic of South Africa. The main overseas ports are Maputo, Beira and Nacala.

International airports are located in Maputo, Beira and Nampula, and there are around 20 other domestic airports and airports.

Mozambique Economy