Key Economic Sectors & Drivers - Mozambique 2025

Mozambique's economic landscape in 2025 is dominated by a defining contrast: the immense, resource-driven potential promised by its extractive megaprojects, and the persistent structural weakness of sectors responsible for sustaining the majority of its population. Economic growth continues to be critically dependent on Foreign Direct Investment (FDI) concentrated in capital-intensive resource extraction, which both drives macroeconomic performance and exacerbates the risk of a non-inclusive, "dual-speed" economy.

The National Industrialization Programme (PRONAI 2021-2035) prioritizes agriculture, energy, mining, and industry as key sectors.

I. The Extractive Industry: Primary Economic Driver and High Risk

The extractive sector, encompassing natural gas, coal, and minerals, remains the single most important force shaping Mozambique's economic trajectory and attracting foreign capital. FDI flows are overwhelmingly concentrated here, accounting for 40% of FDI between 2019 and 2023 in the energy sector alone. The extractive industry was the most significant contributor to GDP growth in 2023.

A. Natural Gas (LNG)

The massive offshore reserves in the Rovuma Basin, estimated at 100 to 180 trillion cubic feet, position Mozambique to become a major global Liquefied Natural Gas (LNG) exporter.

The Coral Sul Floating LNG (FLNG) project, led by Eni, began production in 2022 and continues to be a major growth factor. Eni is expected to advance its second floating platform, Coral Norte, potentially reaching a final investment decision in 2025.
The Mozambique LNG project (Area 1), led by TotalEnergies, which represents a $20.5 billion development. Construction, halted due to insecurity, is expected to resume by mid-2025.
The Rovuma LNG project (Area 4), led by ExxonMobil, which is nearing the lifting of force majeure, paving the way for future investment decisions.

Dependencies and Risks: The entire sector's operational readiness depends heavily on security guarantees in Cabo Delgado. Furthermore, the economy is exposed to global commodity price volatility and faces long-term risks, including the global energy transition potentially rendering fossil fuel reserves "stranded resources". Revenue projection relies on LNG stabilizing public debt and providing potential revenues estimated at $100 billion.

B. Mining 

The country holds substantial coal reserves (the most-extracted mineral), graphite, titanium, iron ore, and high-grade rubies. Drivers: Global demand for minerals, particularly graphite (critical for the electric vehicle industry), continues to encourage investment. Coal mining attracted approximately US$282 million in FDI during the first quarter of 2025. Dependencies: The sector is vulnerable to global price fluctuations, exchange rate volatility, and systemic corruption in customs and licensing. Its long-term progress depends on the development of necessary infrastructure through public-private partnerships.

II. Agriculture: Social Backbone and Structural Constraints

Agriculture is fundamental to Mozambique, supporting the livelihoods of the majority of the population and constituting the non-extractive backbone of the economy.

• Status & Importance: The sector employs over 70% of the active labor force and accounts for between 24% and 25.9% of GDP. It is the main source of income for 85% of rural households.

• Drivers: Mozambique has considerable agricultural potential with ample arable land and diverse agro-climatic zones. Government policy recognizes agriculture as a constitutional priority with the potential to accelerate industrialization. Products like tobacco, vegetables, peanuts, and cashews are key exports.

• Dependencies and Constraints: Despite its social importance, the sector suffers from low productivity, is largely subsistence-based, and is critically vulnerable to climate shocks like floods and droughts. Development is hampered by inadequate rural infrastructure, limited access to finance and technology, and reliance on rain-fed agriculture.

III. Services, Logistics, and Infrastructure

The Services sector is the largest component of GDP, representing 40.8% to 55.7% of the national output. This sector has absorbed much of the labor shifting from agriculture.

A. Transport and Logistics

Mozambique's logistics sector is strategically important due to the country's extensive coastline and its role as a key cargo gateway for landlocked neighbors like Zambia, Zimbabwe, and Malawi.Drivers: Investment in infrastructure continues, with DP World beginning a USD 165 million development of the Port of Maputo container terminal in 2025. The government aims to increase the logistics sector's contribution to GDP from 8% to 20% by 2027.Dependencies: The potential of this sector is held back by the low quality of transport infrastructure (ranking 116th globally in 2016 LPI), inadequate border efficiency, and a critical need for enhanced digitalization of customs procedures.

B. Financial Services

The financial sector is vital for intermediation and is highly concentrated, with three banks accounting for over 70% of financial assets, and majority controlled by foreign-owned institutions.

Dependencies: Financial institutions operate in an environment marked by pre-existing vulnerabilities, including high bank exposure to sovereign risk and a high share of assets and liabilities denominated in foreign currency. The high public domestic debt crowds out local enterprises from financing. Companies involved in mega-projects tend to rely on credit lines from their international shareholders and sponsors rather than the local financial sector.

C. Tourism 

• Tourism, designated as a priority sector by the government, holds strong potential due to Mozambique's pristine Indian Ocean coastline and rich cultural heritage.
• Drivers: Investment is spurred by projects such as the Macaneta Integrated Tourism Resort Zone (budgeted at US$774 million). Tourism development is concentrated in Priority Areas for Tourism Investment (PATIs), and is partly catalyzed by the growth of the extractive sector which attracts multinational companies, driving demand for MICE (meetings, incentives, conferences, and exhibitions) tourism in Maputo.
• Dependencies: Despite its potential, the sector has historically underperformed compared to regional peers and requires significant improvements in infrastructure like roads and airports to realize its potential.

IV. Manufacturing and Industrialization

The Manufacturing sector remains weak, typically accounting for less than 15% of GDP (only 7% in some accounts).

• Dependencies: Mozambique's history of growth based on FDI megaprojects (like the Mozal aluminum smelter, the basic metallurgical industry being the largest contributor to industrial production at 31.8% in the first nine months of 2024) has led to high export concentration and vulnerability to commodity price fluctuations. The competitiveness of the manufacturing and agricultural exports has been eroded by gas sector activities, a concept often related to Dutch Disease.

• Opportunities for Diversification: The government's structural transformation vision relies on developing downstream industries and linkages, including agro-processing, wood processing, textile production, and building materials (cement, bricks).

Overarching Challenge: Enclave Growth

The core dependency across all non-extractive sectors is on the efficient, inclusive use of resource revenues. The economy's growth momentum is sustained by Foreign Direct Investment (FDI) into capital-intensive extractive projects. This historic reliance on mega-projects, beginning with Mozal and coal, has driven growth but resulted in limited linkages to the broader economy and insufficient job creation for the rapidly growing labor force. The challenge for 2025 and beyond is ensuring that the SWF (Sovereign Wealth Fund), launched in 2025 to manage gas revenues, successfully steers funds into developing sustainable, labor-intensive sectors like agribusiness and manufacturing to diversify the economy and reduce dependence on volatile extractives.