Mozambique's Agriculture and Agro-Industry

Mozambique's agriculture and agro-industry sectors in 2025 present compelling opportunities for investors seeking to transform subsistence farming into commercial agribusiness. With over 36 million hectares of arable land and a sector contributing 25-27% to GDP while employing 70% of the workforce, the focus is on modernizing value chains to boost productivity, reduce post-harvest losses, and enhance exports. Recent reforms, including the 2023 Investment Law and the Economic Acceleration Package, emphasize fiscal incentives for agro-processing and climate-resilient projects, amid a backdrop of $1.1 billion in agricultural investments from 2020-2024 and $5 billion in approved projects in H1 2025 alone. However, challenges like post-election disruptions and climate vulnerabilities underscore the need for strategic, resilient approaches. This insight highlights key initiatives and opportunities, particularly in irrigation, seed technology, processing hubs, and specific commodities.

Transforming Subsistence Farming into Commercial Agribusiness

Mozambique's agricultural landscape is dominated by smallholders (97% of farms under 2 hectares), but government strategies aim to commercialize through value chain modernization. Initiatives like the National Agricultural Development Strategy (2030) and the $2.9 billion investment plan (2022-2026) prioritize integrating smallholders into markets via outgrower schemes, technology adoption, and agro-processing. Investors can capitalize on this by funding joint ventures that link farmers to processors, reducing 25-30% post-harvest losses and capturing premiums in global chains. Programs like TechnoServe's support for cashew and poultry value chains demonstrate scalable models, generating jobs and improving rural incomes. The Dutch Agri Trade Mission in March 2025 highlights growing international interest, offering matchmaking for tech-driven agribusiness.

Irrigation Expansion in the Limpopo and Zambezi Basins

With only 4% of arable land irrigated, expansion in the Limpopo and Zambezi basins is a priority to combat climate vulnerability and triple irrigated areas by 2025. The Baixo Limpopo Irrigation and Climate Resilience Project, funded by the Climate Investment Funds, upgrades infrastructure for 300 km of roads and irrigation systems, enhancing productivity in Gaza Province. In the Zambezi, ambitious plans target high-potential valleys for rice and sugarcane, supported by the Africa Water Investment Program's $30 billion pipeline, including flood management. IWMI's AI citizen-science tools in Limpopo enable real-time monitoring, ideal for investors in precision irrigation tech. Opportunities include PPPs for solar-powered systems, yielding ROIs through increased yields (up to 20% in resilient crops) and alignment with the $20 million AfDB grant for climate-smart agriculture

Seed Technology Dissemination

Seed systems are being strengthened to boost productivity, with the government allocating $20 million in 2025 for the seed production chain, aiming to improve access for smallholders. FAO's September 2025 webinar showcased decade-long improvements, including biotech and drought-resistant varieties. USAID's SEMEAR project disseminates improved seeds for better agriculture, while GENESS enhances quality access in the Mozambique Channel region. Investors can engage in seed multiplication ventures or tech platforms like mobile-based dissemination, as highlighted in 2025 trends for African agriculture. IRRI's rice initiatives and delayed salinity projects (now early 2025) offer entry points for climate-resilient seeds, potentially increasing yields by 15-20%.

Processing Hubs in Special Economic Zones (SEZs) like Nacala and Mocuba

SEZs are pivotal for agro-industry, with Nacala and Mocuba emerging as hubs for processing and logistics. Nacala, the first SEZ, hosts over 100 companies and continues as a development epicenter, focusing on agro-processing amid $4.2 billion in H1 2025 approvals. Mocuba's planned SEZ targets value addition in crops like sesame and cashews, supported by ENDE 2025-2044's industrial parks. IFC notes untapped potential in serviced land for manufacturing, while JICA's Nampula studies highlight agro-processing synergies. Investors can establish facilities for export-oriented processing, benefiting from streamlined regulations and incentives in these zones.

Opportunities in Cashew, Cotton, and Sugarcane Processing

Three key commodities—cashew, cotton, and sugarcane—offer particularly strong potential for agro-processing ventures in Mozambique.

Cashew remains the flagship crop, with production projected to reach 218,900 tons in 2025, representing growth of about 23%. Recent value chain reforms, underpinned by new legislation, are expected to strengthen competitiveness. This creates opportunities for new processing plants and efficiency gains in benchmarking costs for export markets, particularly India and the European Union. Initiatives by organizations such as TechnoServe further support the sector with technical guidance and cost analysis.

Cotton also presents scope for integrated value chain development, especially when linked with oilseed production. Government incentives, including farmer price alignments, and financing from commercial banks for ginning and textile ventures, are improving the sector's attractiveness. Expanded research and training institutes are part of broader policy measures aimed at raising farmer incomes while building stronger supply chains.

Sugarcane continues to serve as a cornerstone export crop, accounting for roughly 20% of Mozambique's agricultural trade. Policy incentives, including those identified through MAFAP analyses, highlight opportunities for processing not only into refined sugar but also into biofuels. Ongoing basin expansion projects are designed to support large-scale mills, reinforcing the sector's industrial potential.

Across all three commodities, joint ventures with joint venture companies (JVCs) are playing a catalytic role by providing farmers with inputs and extension services. Such partnerships enhance scalability while anchoring commercial processing in inclusive supply chains.

Incentives for Export-Oriented Projects

The 2023 Investment Law offers tax credits (5-10% on IRPC for 5 years), customs exemptions on capital goods, and accelerated depreciation (50% increase for agro-industrial assets). SEZs provide IRPC exemptions (1-10 years) and VAT rebates for agriculture. The Economic Acceleration Package includes fiscal perks for agro-processing over three years, plus visa reforms for investors. AfDB's $20 million grant drives investments in climate-smart practices, while USDA and IFAD support food security projects. APIEX facilitates approvals, with $40 million funds for small businesses at FACIM 2025.