top of page

Exploring Business Opportunities in Mozambique: What You Need to Know

Writer's picture: Alice SantosAlice Santos

Updated: May 21, 2024




Mozambique’s economy has shown resilience and potential for growth, primarily

driven by its natural resource sectors. Projections indicate an average growth rate of around

7% annually from 2022. The country is rich in natural gas, coal, and minerals, with

significant discoveries of offshore gas reserves in the Rovuma Basin. These resources have

attracted major international companies and have the potential to create a ripple effect across

the economy, thus transforming the country’s economic landscape.

The country acts as a hub connecting international markets through its seaports and

the Southern African Development Community (SADC). Its investment framework is

bolstered by membership agreements with international organizations like the ICSID and

MIGA.

In the last ten years, Mozambique’s economy has benefited from foreign direct

investment in various sectors. In terms of distribution, the mining industry remains the

primary recipient of foreign capital, followed by the production and distribution of electricity,

gas, and water, manufacturing, and the transport, storage, and communication sector.

The Mozambican government has implemented reforms and maintained sound

economic policies to create an inviting environment for investors. It has also initiated a

privatization program for public companies. Mozambique’s Investment Law and regulations

generally do not differentiate based on investor origin or restrict foreign ownership or control

of companies. The government encourages public-private partnerships, especially in

infrastructure development, which is one of the country’s top priorities


Key Investment Sectors


Energy and Natural Resources: The discovery of vast natural gas reserves has

positioned Mozambique as a significant player in the global energy market. Projects like the

Coral South FLNG and the Mozambique LNG project have attracted substantial foreign

investment. The country also possesses large coal deposits, particularly in the Tete province, which are being developed for both export and domestic energy production. Renewable energy is another area drawing investor interest. With an estimated 70% gap in energy access, Mozambique is ripe for investments in solar, wind, and hydropower projects.


Agriculture: Agriculture remains a cornerstone of Mozambique’s economy,

employing the majority of the population. The sector offers opportunities in agribusiness,

particularly in the production of cash crops such as sugarcane, tobacco, and cashew nuts.

Investments in improving agricultural productivity and infrastructure can yield significant

returns. With 36 million hectares of arable land, much of it still unutilized, the country offers

significant potential for agricultural development and export.


Infrastructure Development: Mozambique’s infrastructure, particularly in

transportation and energy, requires substantial development. Investments in ports, railways,

pipelines and roads are critical to supporting the country’s economic growth. The government has been actively seeking partnerships to improve these infrastructures, which are vital for both domestic and international trade.


Tourism: Mozambique has the potential to become a major tourist destination.

Investment in hotels, resorts, and related services can tap into this potential, particularly as

the government seeks to promote tourism as a key economic sector.


Financial Services: The sector is expanding, with a young and growing population

providing a robust consumer market. Banking, insurance, and capital markets are areas with potential for commercial success, reflecting the changing business and regulatory

environment.


Investment Incentives

The Mozambican government has implemented several policies to attract foreign

investment. These include tax incentives, reduced tariffs, and the establishment of Special

Economic Zones that offer benefits such as tax breaks and simplified administrative

procedures. The Investment Promotion Centre provides support to investors, helping to

navigate the regulatory landscape and access these incentives.


Challenges

Regulatory Environment: The regulatory framework in Mozambique can be complex

and bureaucratic. Due diligence is required to obtain licenses, property rights, and navigating the legal system.


Infrastructure Deficits: Despite ongoing development projects, Mozambique’s

infrastructure still lags behind in some areas.


Economic Diversification: While efforts to diversify the economy are ongoing,

investors should be aware that Mozambique’s economy remains heavily reliant on its natural resources.


Despite these challenges, the government’s commitment to improving the investment

climate and the strategic use of natural resources positions Mozambique as an attractive

destination for investors looking to capitalize on the country’s potential.


References

2 views0 comments

Comments


bottom of page