Economic and Political Overview

flag Mozambique Mozambique: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

Mozambique saw robust economic growth before 2016, averaging over 7% annually from 2000 to 2015. However, between 2016 and 2021, several shocks—such as the hidden debt crisis, cyclones, COVID-19, and conflict in the north—severely affected economic activity and reversed poverty reduction efforts. The economy continues to rely heavily on natural resources, with extractive industries driving growth. According to the IMF, overall growth in 2024 was 1.9%, from 5.4% one year earlier, due to a weaker contribution of the extractives sector and a slowdown in Q4 amid widespread social unrest triggered by the results of October's elections. Growth is projected to recover to 3.0% in 2025 as social conditions stabilize and economic activity, particularly in services, gains momentum. However, elevated uncertainty, tighter fiscal policies, and foreign exchange shortages pose risks to the forecast (IMF).

Fitch estimates that the general government deficit widened to 6.5% of GDP in 2024. Disruptions to economic activity following the elections led to a revenue shortfall, estimated by the government at 3% of GDP, prompting some spending reductions. The change in government has delayed the 2025 budget production. Addressing the large public sector wage bill amid social unrest remains a significant challenge for the new administration. A more stable domestic environment is expected to support some revenue recovery in 2025 while financing constraints on spending are projected to reduce the deficit to 4.4%. Given higher deficits, Fitch now anticipates a slower reduction in general government debt/GDP compared to previous projections. The debt is still expected to decrease to 93.8% of GDP in 2024 (compared to a peer median of 68.2%), mainly due to an out-of-court settlement of liabilities from the "hidden-debt scandal." Debt/GDP at the end of 2026 is now forecasted at 93.4%. Inflation pressures have increased but remain manageable. The outlook faces significant downside risks, including extreme climate events, a slower pace or reversal of fiscal reforms due to the upcoming presidential elections, and a potential deterioration of the security situation in the north. A worsening fiscal stance could raise the risk of debt refinancing and the rollover of domestic debt. The Bank of Mozambique began a loosening cycle in January 2024, cutting the policy rate by 500bps to 12.25%. In late January 2025, it also reduced reserve requirements on local currency deposits from 39% to 29%. Despite supply chain disruptions and rising food prices due to social unrest, inflation stayed below the 5% target (IMF).

The unemployment rate was estimated at 3.8% in 2023 according to the World Bank (modelled ILO estimate). Frequent natural disasters hinder economic activity and food security, worsening poverty, which was projected at 74.7% in 2023 based on the USD 2.15 poverty line. High underemployment and inequality pose major challenges to economic inclusion, while the informal sector, which includes over 80% of the labour force, dominates the job market, leaving many workers without social protection (World Bank). The IMF estimated the country’s GDP per capita (PPP) to be only USD 1,729 in 2024.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 20.9622.5024.5526.2927.95
GDP (Constant Prices, Annual % Change) 5.44.34.33.93.8
GDP per Capita (USD) 618645685714739
General Government Gross Debt (in % of GDP) 93.996.096.593.889.0
Inflation Rate (%) 7.03.54.35.45.5
Current Account (billions USD) -2.22-6.74-7.37-7.86-7.33
Current Account (in % of GDP) -10.6-29.9-30.0-29.9-26.2

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Mozambique is rich in natural resources and produces a large variety of agricultural products. It has significant coal and gas reserves and hydroelectric potential and possesses the world’s largest reserves of tantalite. It is among the largest producers of cassava and oilseeds (FAO). Although agriculture employs 69.5% of the country's active population, it represents 25.9% of GDP (World Bank, latest data available). The majority of agriculture in Mozambique is subsistence-based, with farmers growing food primarily for their own consumption, and the country continues to be a net food importer. Moreover, the sector is particularly vulnerable to natural disasters such as droughts and floods. The main crops in the country are corn, cassava, beans, rice, and a variety of vegetables and oilseeds. Agricultural production in Mozambique grew at an average annual rate of 1.5% between 2018 and 2022. However, the sector faces challenges such as low productivity and competitiveness, limited access to advanced technologies, inadequate rural infrastructure, and low value addition.

Mozambique’s natural resources include recently discovered gas and coal, high-quality iron ore, gold, bauxite, graphite, marble, and the rare mineral tantalite. The mining sector holds substantial potential for revenue generation and foreign investment. The manufacturing sector is still weak (7% of GDP) and is dominated by the production of the Mozal aluminium smelter. Overall, the industrial sector contributes to 21.3% of the country's GDP and employs 9.1% of the active population. Mozambican industrial production declined slightly in the first nine months of 2024 compared to the same period in 2023, reaching EUR 1.702 million, according to government data. The basic metallurgical industry remained the largest contributor, accounting for 31.8% of total production, but saw a year-on-year decline of 4.1% to EUR 541 million. The food industry followed, representing 28.9% of total output, with production rising by 6.8% from January to September to EUR 491 million.

The service sector represents 40.8% of GDP and accounts for more than one-fifth of total employment (21.5%). Tourism is the main industry, although it is still performing well below its potential. In addition to expanding financial services, the tertiary sector has a growing number of micro-scale retail businesses. The banking sector is primarily controlled by foreign-owned financial institutions, with 19 commercial banks among a total of 40 financial institutions. The major players include Millennium BIM (with Portuguese and Mozambican shareholders), BCI (with Portuguese and Mozambican shareholders), and Standard Bank (with South African shareholders). Together, these three banks account for over 70% of all financial assets, including deposits and loans (data from the U.S. Trade Administration).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 69.5 9.1 21.5
Value Added (in % of GDP) 25.9 21.3 40.8
Value Added (Annual % Change) 3.8 13.8 3.1

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Mozambique Metical (MZN) - Average Annual Exchange Rate For 1 MUR 1.771.841.781.761.77

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
51,6/100
World Rank:
153
Regional Rank:
36

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

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Foreign Trade in Figures

Mozambique is open to foreign trade, which represents more than 106% of the country's GDP (World Bank, latest data available). According to data from Comtrade, in 2023, the country’s main exports comprised coal (21.3%), petroleum gas and other gaseous hydrocarbons (20.9%), unwrought aluminium (13.2%), electrical energy (8.0%), and coke and semi-coke of coal, lignite or peat (5.6%); whereas imports were led by petroleum oils and oils obtained from bituminous (16.4%), fluorides; fluorosilicates, fluoroaluminates (3.8%), rice (3.5%), wheat and meslin (2.8%), and motor vehicles for the transport of goods (2.6%). Revenues from natural gas and electricity exports rose by USD 1,184.1 million and USD 87.2 million, respectively. In contrast, income from aluminium, mineral coal, and heavy sands exports dropped by 33.1%, 22%, and 8.4%, respectively (data Central Bank).

The country's main customers in 2023 were India (15.6%), China (14.2%), South Africa (14.0%), South Korea (5.6%), and the United Kingdom (4.8%); while the main suppliers were South Africa (23.2%), China (15.4%), the United Arab Emirates (10.3%), India (8.0%), and Singapore (6.1% - Comtrade). Mozambique is a member of the WTO and of the South African Development Community (SADC), and has signed trade agreements with Malawi and Zimbabwe. In February 2018, Mozambique joined the EU–SADC EPA that was signed in June 2016 by Botswana, Lesotho, Namibia, South Africa, and Swaziland. The country also signed the African Continental Free Trade Agreement. Customs duties remain high and there are numerous non-tariff barriers in the country (such as slow customs clearance procedures).

Mozambique's trade balance is negative and is expected to remain so until exports of coal and gas to Asia develop further.  In 2023, the country exported USD 8.2 billion, importing 10.1 billion (stable and -31.1% year-on-year, respectively, as the high import figure in 2022 was driven by the arrival of the Coral Sul FLNG floating platform). As per services, exports reached USD 1 billion against USD 2.1 billion in imports (data WTO). The World Bank estimated the country’s trade balance to be negative by 15.1% of GDP in 2023, from 35.6% the previous year. According to preliminary figures from the Central Bank, from January to September 2024, Mozambique's goods exports generated USD 6.1 billion, marking an increase of USD 218 million compared to the same period in 2023. Meanwhile, the goods import bill decreased by 1.7%, reaching USD 6.4 billion.

 
Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 7,4286,5148,75814,67110,098
Exports of Goods (million USD) 4,6693,7205,7048,2998,276
Imports of Services (million USD) 2,7622,7782,5572,5752,123
Exports of Services (million USD) 9317818221,128997
Imports of Goods and Services (Annual % Change) -11.2-4.29.730.9-25.2
Exports of Goods and Services (Annual % Change) -2.7-15.216.826.5-5.3
Imports of Goods and Services (in % of GDP) 68.467.171.785.560.3
Exports of Goods and Services (in % of GDP) 37.132.840.449.845.3
Trade Balance (million USD) -2,212-2,202-2,257-5,056-903
Trade Balance (Including Service) (million USD) -4,069-4,210-4,008-6,523-1,891
Foreign Trade (in % of GDP) 105.699.9112.1135.3105.6

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2023
India 15.6%
China 14.2%
South Africa 14.0%
South Korea 5.6%
United Kingdom 4.8%
See More Countries 45.7%
Main Suppliers
(% of Imports)
2023
South Africa 23.2%
China 15.4%
United Arab Emirates 10.3%
India 8.0%
Singapore 6.1%
See More Countries 37.0%

Source: Comtrade, Latest Available Data

 
 

Main Products

8.3 bn USD of products exported in 2023
Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal 21.3%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 20.9%
Unwrought aluminiumUnwrought aluminium 13.2%
Electrical energyElectrical energy 8.0%
Coke and semi-coke of coal, of lignite or of peat,...Coke and semi-coke of coal, of lignite or of peat, whether or not agglomerated; retort carbon 5.6%
See More Products 31.1%
10.1 bn USD of products imported in 2023
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 16.4%
Fluorides; fluorosilicates, fluoroaluminates and...Fluorides; fluorosilicates, fluoroaluminates and other complex fluorine salts (excl. inorganic or organic compounds of mercury) 3.8%
RiceRice 3.5%
Wheat and meslinWheat and meslin 2.8%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 2.6%
See More Products 70.9%

Source: Comtrade, Latest Available Data

 
 

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Ministry of Agriculture and Rural Development
Ministry of Mineral Resources and Energy
Ministry of Finance
Statistical Office
National Institute of Statistics
Central Bank
Central Bank
Stock Exchange
Stock Exchange of Mozambique
Search Engines
Google
Economic Portals
Institute of Social and Economic Studies (IESE - Instituto de Estudos Sociais e Económicos)

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Political Outline

Current Political Leaders
President: Daniel Francisco CHAPO (since 15 January 2025)
Prime Minister: Maria Benvinda Delfina LEVI (since 17 January 2025)
Next Election Dates
Presidential: 2029
Legislative: October 2029
Main Political Parties
The two main political parties in Mozambique are the Mozambique Liberation Front (Frente de Libertação de Moçambique - FRELIMO), the sole legal political party until 1991 and the current ruling party, which is generally more popular in the south and some northern areas; and the opposition party RENAMO (Mozambican National Resistance), which has stronger support in the central provinces of Manica, Sofala, Zambezia, and Nampula. In total, there are numerous smaller parties active at regional or national levels. The Democratic Movement of Mozambique (MDM) is the third party represented in the Assembly of the Republic.
Type of State
Presidential Republic.
Executive Power
The Constitution of Mozambique gives strong power to the President of the Republic, as he functions as the head of state, head of government, commander-in-chief of the armed forces, and as a symbol of national unity. The President is directly elected for a five-year term.
The Prime Minister is appointed by the President. His functions include advising the President, assisting in governing the country, and coordinating the activities of other Ministers.
Legislative Power
Mozambique has a unicameral system: the Assembly of the Republic (Assembleia da República) has 250 members. 248 representatives are elected in multi-seat constituencies through party-list proportional representation, while 2 members representing Mozambicans living abroad are also elected through party-list proportional representation. Members serve 5-year terms.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
108/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
5/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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Latest Update: May 2025