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 Eswatini 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).

Currently, Mozambique’s economy exhibits fragile and volatile growth, strongly constrained by high levels of public debt, fiscal limitations, and a heavy dependence on the extractive sector. Following the contraction recorded at the end of 2024, associated with post‑electoral instability, economic activity in 2025 has been recovering gradually, albeit at a moderate pace, with growth projections standing at around 2–3%. Economic momentum continues to be driven mainly by natural gas projects and mining, while non‑extractive sectors remain constrained by structural bottlenecks, institutional weaknesses, and recurrent climate shocks. Despite some improvement in macroeconomic conditions, growth remains below the level required to significantly reduce poverty and promote more inclusive economic development.

The economic slowdown that began in 2016 was associated with governance weaknesses and the impact of undisclosed public debt, which constrained access to external financing and undermined investor confidence. Since then, economic performance has been shaped by persistent structural challenges, including insecurity in Cabo Delgado province, tight fiscal conditions, high public debt, and a strong reliance on the extractive sector. While offshore natural gas projects and mining have continued to provide support to growth, economic activity has remained volatile and narrowly based, with limited expansion in non‑extractive sectors. In 2025, the recovery remains fragile and gradual, with growth constrained by post‑electoral disruptions, fiscal pressures and climate‑related shocks, highlighting the ongoing difficulties in achieving sustained and more inclusive economic growth.

In 2025, Mozambique’s economy has been recovering only gradually following the sharp contraction in late 2024, with economic activity remaining fragile and uneven across sectors. According to IMF World Economic Outlook (WEO) estimates, real GDP growth in 2025 is projected at around 2.5%, broadly consistent with the government’s revised growth projection of 2.9% under the Economic and Social Plan and State Budget. Provisional data for the first half of 2025 point to continued weakness in industry and services, while overall growth remains heavily dependent on the extractive sector, particularly offshore natural gas production. Inflation is estimated to remain within a 4–7% range, supported by a relatively stable exchange rate and an accommodative monetary policy stance, while public finances continue to be constrained by limited revenue mobilization and high debt service costs.

Looking ahead, Mozambique’s medium‑ to long‑term growth prospects remain favorable, strongly underpinned by the continued development of its liquefied natural gas (LNG) sector. In 2025, the Coral Sul FLNG project (Area 4) consolidated its position as the backbone of the sector, having surpassed the milestone of 100 LNG cargoes exported since operations began in November 2022, with regular shipments mainly directed to Asian markets. In parallel, during 2025, TotalEnergies announced the decision to lift force majeure and move towards the restart of the Mozambique LNG project (Area 1), following improvements in security conditions in the north of the country, although implementation remains subject to government approval and the evolution of the security environment. Benefiting from a strategic geographic location and preferential access to Asian markets, Mozambique is well positioned to strengthen its role as a major LNG exporter and a potential regional gas hub. The expansion of the LNG sector is expected to generate significant economic spillovers over the coming decade, through higher public revenues, increased foreign direct investment, and the development of associated value chains, thereby consolidating LNG as a central pillar of the country’s future economic growth and development.

PwC Mozambique

PwC has an extensive network of offices in most countries on the African continent. PwC Mozambique offers a range of tax, regulatory, 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.