Mozambique

Mozambique, a country in Southeast Africa with a coast on the Indian Ocean, is bordered by Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west, and Swaziland and South Africa to the southwest, with a long coastline along the Indian Ocean. Formerly a Portuguese colony until gaining independence in 1975, Mozambique is administratively divided into ten provinces and the capital city of Maputo, which holds provincial status. The official language is Portuguese, and the local currency is the Mozambican Metical (MZN).

Following a decade of robust expansion—with real GDP growth averaging 7.0% between 2010 and 2015, driven by rapid growth in the mining sector, major infrastructure investment, along with the exploration and discovery of vast natural gas reserves resulting in rapid increase in foreign direct investment (FDI), including investment in coal and natural gas, the economy slowed substantially.

Revelations of historical corruption were one of the main drivers of economic slowdown from 2016 onwards, with many donor agencies (including the World Bank) withholding much-needed financial aid from the country. From 2016 to 2019, growth moderated to an average of 3.3% due to reduced donor support following the disclosure of undisclosed public debt, the impact of natural disasters, and rising insecurity in the northern Cabo Delgado province which negatively affected the mining and oil and gas sectors through interrupted operations in the region. The COVID-19 pandemic further constrained economic performance, with GDP contracting by 1.3% in 2020. A recovery followed, supported by improvements in agriculture and services, although growth remained below potential.

In 2024, Mozambique’s economy showed early momentum, with the country experiencing GDP growth during Q1-Q3. However, due to civil/political unrest following the October 9 general elections, there was a sharp contraction in Q4, resulting in a limited overall GDP growth of 1.85%, significantly below the pre-election 5.5% forecast for 2024. As the country continues to recover from the economic repercussions caused by the civil unrest, the government has since revised its 2025 growth projection to 2.9%, down from an earlier estimate of 5%.

Looking ahead, Mozambique’s medium- to long-term growth prospects remain highly promising, underpinned by the continued development of its liquefied natural gas (LNG) sector. Following the start of commercial LNG production in late 2022 and a surge in exports in 2024, the country is emerging as a key global energy supplier. This momentum is driven by the success of the Coral Sul FLNG project (Area 4) and the anticipated restart of the Mozambique LNG project (Area 1). With its strategic geographic position and access to Asian markets, and provided that the security situation in the North is stabilised, Mozambique is well placed to become a major LNG exporter and regional gas hub. The expansion of the LNG industry is expected to generate significant economic spillovers, not only for oil and gas operators but also across supporting industries and public revenues, making it a central pillar of the country’s future development.

PwC has an extensive network of offices in most countries on the African continent. PwC Mozambique offers a range of tax, legal, audit, advisory, and consulting services. Our professionals support clients with local knowledge and skills and with access to a broad range of other professionals across the PwC global network of firms.