Mozambique NEWS briefings

1. Economic & Finance Briefing:  June to August 2025 Update

Economic and Financial Briefing: June-August 2025

This quarter, Mozambique's economic landscape showed a mix of cautious recovery, ambitious investment plans, and persistent fiscal and financial challenges. The government, under its new leadership, focused on attracting foreign capital and stabilizing key macroeconomic indicators.

Macroeconomic Performance

• Economic Outlook: The Mozambican economy began to show signs of gradual recovery after a sharp slowdown in late 2024 and early 2025. The International Monetary Fund (IMF) projected a 2.5% GDP growth for 2025, driven by a recovery in the services sector during the second half of the year. The Purchasing Managers Index (PMI) confirmed this trend, indicating the strongest business activity growth in two years in July.

• Inflation and Interest Rates: Inflation remained contained at 4% year-on-year in July, below the central bank's target. In response, the Bank of Mozambique continued its loosening cycle by cutting its monetary policy rate, the MIMO, to 10.25%.

• Fiscal and Debt Concerns: Despite the positive growth signs, the country's fiscal position remained fragile. The fiscal deficit reached 2.4% of the full-year GDP in the first half of 2025 due to subdued tax revenues and continued government spending. Total public debt is projected to increase to 96.5% of GDP in 2025, leading the IMF to recommend "front-loaded fiscal consolidation" to ensure long-term sustainability.

Investment and Foreign Capital

• Landmark Investment Deals: A major highlight was the signing of a $20 billion strategic cooperation agreement with a Qatari investment group in August. The deal targets key sectors like agriculture, energy, and infrastructure. In a further sign of renewed confidence, key contractors for the TotalEnergies LNG project in Cabo Delgado confirmed that a phased restart of the multi-billion-dollar project was underway in July.

• Foreign Exchange Shortages: A major obstacle for businesses and trade was the shortage of foreign currency. The current account deficit remained subdued, reflecting these tight financial conditions that are weighing on imports. This issue led to a wider spread between the official and parallel exchange rates.

• Sovereign Wealth Fund: The Mozambique Sovereign Fund (FSM), which collects revenues from the nation's gas and oil projects, saw its collections for the first half of 2025 exceed the total for all of 2024. This fund is intended to finance social projects and promote long-term stability.

Government Initiatives

• Support for Small Businesses: The government, with financing from the World Bank, launched a $40 million Mutual Guarantee Fund in August to provide credit guarantees to small and medium-sized enterprises (SMEs). This initiative is specifically aimed at addressing the difficulty these businesses face in accessing financing due to high interest rates.

• Budgeting and Fiscal Prudence: The new government's 2025 State Budget was finally approved, prioritizing spending on health, education, and infrastructure while making a controversial cut of approximately 35% to the defense budget. In July, the government announced it would retain up to 25% of various budgeted expenditures to manage the fiscal deficit and maintain a tight control on spending.

Monetary Policy & Currency Briefing: June-August 2025

This quarter saw the Bank of Mozambique continue its trend of monetary easing while the national currency faced pressures from foreign exchange shortages. The government and private sector debated the causes of the currency issues, highlighting the delicate balance between monetary policy and fiscal stability.

Monetary Policy and Interest Rates

The Bank of Mozambique (BdM) continued its strategy of gradually lowering its benchmark interest rate, the MIMO rate, which began in late 2024. The BdM's Monetary Policy Committee cut the rate twice during this period:

• June: The MIMO rate was reduced to 11% from 11.75%.

• July: The rate was further cut to 10.25%, its lowest point since 2021.

These decisions were made in response to moderating inflation, which stood at 4.2% in June and had a downward trajectory toward the single-digit target. The central bank's goal is to stimulate economic growth by making credit more accessible to the private sector. The BdM maintains that the outlook for single-digit inflation is stable, supported by a favorable global trend in commodity prices.

Currency and Foreign Exchange

Despite the stability of the metical (MZN) against major currencies like the US dollar, a persistent shortage of foreign currency in the market was a major point of contention.

• Exchange Rate: The metical remained relatively stable, with the exchange rate against the US dollar fluctuating around 63.83 MZN per USD in late August.

• Shortages and Backlog: The private sector, represented by the Confederation of Economic Associations (CTA), highlighted that the limited availability of foreign currency was a significant constraint on businesses. This shortage created a backlog of at least $600 million in unmet demand, affecting imports of raw materials, fuel, and essential goods.

• Blame Game: President Daniel Chapo accused the banking sector of "creating" the shortages and turning them into "business opportunities," a claim that was strongly debated. In response, business leaders urged the government to implement policies that promote exchange rate stability and encourage domestic generation of foreign currency. The shortages were also linked to a decline in external aid disbursements, particularly following the dissolution of the USAID office in the country.

Public Debt and Fiscal Outlook

The country's financial stability also faced pressure from a growing debt burden.

• Public Debt: The BdM warned that pressure on domestic public indebtedness continued to rise, reaching over 454.3 billion meticais (about $7.1 billion) by July, an increase from the end of 2024.

• Fiscal Tightening: To address the growing deficit and maintain fiscal stability, the government's 2025 budget included a controversial 35% cut to the defense budget. Additionally, the government announced it would retain up to 25% of various budgeted expenditures to control spending.

2. Mozambique Social Scene: June to August 2025 

Social Issues Briefing: June-August 2025

The period from June to August 2025 saw a convergence of long-standing social issues in Mozambique, intensified by conflict, climate shocks, and public health emergencies. The humanitarian situation remained critical, particularly in the northern provinces.

Humanitarian Crisis and Displacement

The humanitarian situation worsened throughout this quarter, primarily driven by the ongoing insurgency in Cabo Delgado and the effects of drought and cyclones.

• Conflict-Driven Displacement: A new wave of attacks by armed groups in July led to the displacement of nearly 60,000 people in just two weeks, with Chiúre being the hardest-hit district. This brought the total number of internally displaced persons (IDPs) in the country to over 850,000 by August, according to the UNHCR. Many of these displaced people, a majority of whom are children, are living in precarious conditions with limited access to basic services.

• Climate and Food Insecurity: The country is grappling with the effects of a prolonged drought and recent cyclones, which have compounded the crisis. This has led to widespread food insecurity, with over 140,000 children pushed into acute malnutrition. In many communities, families have resorted to "extreme coping strategies," including child marriage and forced labor, to survive.

• Humanitarian Aid Shortfalls: The humanitarian response is under severe strain. As of June, funding levels had fallen by nearly 28% compared to the previous year, leaving most aid clusters critically under-resourced. This has resulted in a significant reduction in assistance, with food distributions now occurring every two months and meeting only a fraction of people's daily caloric needs.

Public Health Concerns

Mozambique faced a serious public health challenge with the declaration of an Mpox outbreak in July.

• Mpox Outbreak: The government declared an outbreak of Mpox on July 11, with the first confirmed cases of the Clade Ib variant. Cases were reported across all provinces, with a notable concentration in the Lago District of Niassa province. The Ministry of Health is finalizing a national response plan, with support from organizations like UNICEF to provide monitoring, patient treatment, and community awareness.

• Ongoing Cholera Epidemic: The country also continued to battle an ongoing cholera outbreak, with nearly 4,500 new cases reported between October 2024 and July 2025. This persistent epidemic is fueled by poor access to safe water, weak infrastructure, and the compounded effects of recent cyclones.

Social Tensions in Urban Centers

In Maputo, social issues manifested as tensions over informal trade and political unrest.

• Vendor Relocation: The Maputo City Council announced in July that it would crack down on informal vendors operating on sidewalks and roadsides, a move aimed at improving public safety and traffic flow. This led to pushback from vendors who argue that their street locations provide more customer traffic. The initiative highlights the difficult balance between urban development and the livelihoods of a large informal sector.

3. Mozambique Infrastructure & Development Briefing - June to August 2025

Infrastructure & Development Briefing: June-August 2025

This quarter was a mix of significant announcements and continued challenges for Mozambique's infrastructure and development goals. While the government secured a massive investment deal and launched new initiatives, the persistent security crisis and fiscal pressures remained key obstacles.

Key Developments and Investment

• Major Investment Deal: The biggest news of the quarter was a $20 billion strategic agreement signed in August with the Qatari investment group, Al Mansour Holdings. This long-term investment is slated for a wide range of sectors, including energy, agriculture, and infrastructure, with a focus on job creation. This deal is a major vote of confidence in Mozambique's potential.

• LNG Project Restart: The highly anticipated restart of the $20 billion TotalEnergies LNG project was a focal point. After being suspended since 2021 due to the northern insurgency, the company announced in May that it was aiming to restart work by mid-2025. By July, Saipem, a key contractor, confirmed that a phased restart was underway, a critical step for both the country's economy and its infrastructure development.

• Road Network Upgrades: Infrastructure projects continued on key trade corridors. Trans African Concessions (TRAC) announced that it had commenced several new projects along the N4 route connecting Mozambique to South Africa. These projects, which began in June and July, include rehabilitation and upgrades to improve safety and efficiency.

New Governance and Sectoral Initiatives

• Public Works Authority: In June, the government created a new public administration body, the Administração Nacional de Obras Públicas (ANOP). This agency is designed to manage, coordinate, and supervise public infrastructure projects nationwide, aiming to bring greater efficiency and accountability to public works.

• Rural Connectivity: The government is also addressing the digital divide. In August, the Communications Regulatory Authority of Mozambique initiated a public tender for the first phase of its Rural Connectivity Project. The initiative aims to provide essential digital services and mobile network infrastructure (2G and 4G) in at least 30 rural locations, promoting an inclusive digital transformation.

Challenges and Outlook

• Displaced Persons: The insurgency in the north continues to be a major development challenge. A new wave of attacks in July displaced over 60,000 people, placing immense strain on already stretched humanitarian resources and hindering development efforts in the region.

• World Bank Concerns: The World Bank lowered its economic growth forecast for Mozambique to 3% for 2025, a significant revision from earlier estimates. The institution pointed to a deteriorating external environment and domestic headwinds, including high public debt and rising debt servicing costs.

• Contracting Challenges: Mozambican contractors are facing difficulties in participating in large-scale projects, particularly those funded by the World Bank. The Mozambican Federation of Building Contractors (FME) has called on the World Bank to ease its requirements, as national companies struggle to meet the strict criteria, leading to foreign firms winning most tenders and exporting profits.

Energy & Infrastructure Briefing: June-August 2025

This quarter marked a period of critical advancements for Mozambique's energy infrastructure, driven by both the long-awaited return of major gas projects and significant progress in the renewable energy sector.

Resumption of LNG Megaprojects

The main story was the official restart of the $20 billion TotalEnergies LNG project in Cabo Delgado province. After being suspended in 2021 due to security threats, the project received a go-ahead in July.

• Phased Restart: The government and TotalEnergies, along with its contractors, confirmed a progressive sequence of restart operations. The move came after the Mozambican government, with the help of allied forces from Rwanda and SADC, secured the area around the project site in the Afungi peninsula.

• Investor Confidence: The resumption is a major step toward restoring investor confidence in the country's gas sector. This comes as Mozambique also finalizes a $20 billion strategic agreement with a Qatari investment group, which includes investments in the energy sector.

• Other Projects: While the TotalEnergies project received the most attention, the country is also moving forward with other energy developments. The government expects to receive capital gains tax from Galp's sale of its stake in the Area 4 consortium, which includes the Rovuma LNG project.

Advancing Renewable Energy

Beyond natural gas, Mozambique is making significant strides in its commitment to a greener energy mix. The government and international partners are heavily investing in solar and wind power.

• Major Solar Projects: Feasibility studies for a 400 MW solar plant have been finalized, and a tender has been issued for a 200 MW solar and wind project. These initiatives are part of a broader strategy to boost the country's renewable energy capacity and reduce reliance on hydropower.

• Rural Electrification: The World Bank and other donors approved a $131 million project aimed at expanding electricity access. The initiative seeks to connect over 700,000 people to the national grid through the construction of new power lines and the installation of off-grid systems in rural communities. The government's goal is to achieve universal energy access by 2030.

• Renewable Targets: A new Renewable Energy Atlas shows that Mozambique aims to triple its renewable energy capacity by 2030, with a long-term goal of 7.5 GW of solar and 2.5 GW of wind power by 2050. This demonstrates a clear government strategy to diversify the energy landscape and attract green investment.

4. Mozambique International Relations & Trade Briefing: June - August  2025 Update

The international relations and trade landscape in Mozambique from June to August 2025 was marked by a strategic push to attract foreign investment and strengthen key bilateral partnerships. This period showed the new administration's focus on economic revitalization and security cooperation, while also highlighting ongoing challenges.

Strengthening Key Bilateral Partnerships

• Renewed Russian Ties: Mozambique celebrated 50 years of diplomatic relations with Russia in June. In July, Foreign Ministers from both countries met in Moscow to reaffirm their long-standing partnership, which dates back to Mozambique's independence struggle. The discussions focused on deepening cooperation in trade, economic, and military-technical sectors. Russia reiterated its willingness to provide support for Mozambique's counter-terrorism efforts, a key area of bilateral cooperation.

• Security and Trade with Rwanda: President Daniel Chapo's visit to Rwanda in August was a major diplomatic event. The nations renewed their Status of Forces Agreement, which formalizes Rwanda's military presence in Cabo Delgado province. The agreement underscores the central role Rwanda plays in Mozambique's security strategy. In addition to security, the leaders signed a Memorandum of Understanding to boost bilateral trade and investment, particularly in sectors like agriculture and tourism.

Trade and Foreign Investment

The new government made attracting foreign investment a top priority, with some notable successes.

• Landmark Investment Deal: In August, the government signed a $20 billion strategic cooperation agreement with a Qatari investment group, Al Mansour Holdings. This deal targets a wide range of sectors, including energy, agriculture, and infrastructure, and is seen as a significant step toward economic diversification.

• LNG Project Restart: The highly anticipated restart of the TotalEnergies LNG project in Cabo Delgado moved closer to reality. In July, key contractors confirmed a phased restart of operations, which is a critical sign of renewed investor confidence and a boost to Mozambique's economic prospects.

• Intra-African Trade: Mozambique launched its first shipment of goods under the African Continental Free Trade Area (AfCFTA) framework, a move to boost intra-African trade and advance regional economic integration. By August, reports indicated that Mozambique's exports to other African countries had reached $1.5 billion over the past year, highlighting the growing importance of regional trade.

Challenges and External Perceptions

Despite the positive developments, the country continued to face external challenges.

• Foreign Currency Shortages: The private sector highlighted a shortage of foreign currency, which created a significant backlog in unmet demand for imports. This issue led to some foreign partners, such as the South African airline Airlink, to threaten to stop selling tickets inside Mozambique due to difficulties repatriating funds.

• Humanitarian Aid Gaps: The ongoing insurgency in the north continues to be a humanitarian crisis that impacts international relations. A UN report in August noted a major funding shortfall, with the humanitarian response plan receiving only 19% of the requested funding, hindering aid efforts and reflecting a gap between international pledges and on-the-ground support.

5. Mozambique Public Safety & Security Briefing: June to August 2025 

The security situation in Mozambique from June to August 2025 was dominated by two primary issues: the escalating insurgency in the northern province of Cabo Delgado and ongoing concerns over public safety and police conduct in urban areas, particularly Maputo.

Northern Insurgency Escalates

The conflict in Cabo Delgado saw a significant and worrying escalation. The period was marked by an increase in the intensity and geographic spread of attacks by non-state armed groups.

• Renewed Violence and Displacement: A new wave of attacks in July displaced over 56,000 people in just two weeks, marking the largest wave of displacement since February. The violence extended southward into the districts of Ancuabe, Chiúre, and Erati (in neighboring Nampula province), forcing tens of thousands of families to flee their homes and seek refuge in makeshift camps.

• Humanitarian Crisis: This surge in violence exacerbated an already dire humanitarian situation. The UN reported that the conflict has displaced over 850,000 people in total. The new attacks have hindered humanitarian access, with armed groups setting up informal checkpoints and extorting money from civilians and aid workers.

• Government Response: In response to the escalating threat, Mozambique's armed forces, with continued support from Rwandan and Southern African Development Community (SADC) troops, launched several offensives. These operations led to the recapture of key towns and bases from the insurgents, including parts of the Macomia district. President Daniel Chapo pledged to strengthen the capacity of the country's armed forces to better combat terrorism.

Urban Public Safety and Police Accountability

While the insurgency in the north captured international attention, the capital, Maputo, faced its own security challenges, particularly related to political protests and organized crime.

• Protests and Police Conduct: Public safety in Maputo was a recurring concern, as demonstrations related to the contested 2024 elections continued. The U.S. Embassy issued multiple security alerts warning of possible protests. In a significant development for accountability, the Attorney General's Office opened 31 legal proceedings against police officers implicated in the violent repression of post-election protests.

• Anti-Crime Initiatives: In an effort to enhance public safety, the government launched a new 8-year strategic plan (2025-2033) to combat crime. This plan focuses on modernizing criminal investigations, strengthening institutions, and building public trust. The new administration also announced its intention to create a new General Inspectorate of State, a body with a mandate to prevent and combat corruption, which President Chapo identified as one of the country's most pressing threats.

• Kidnapping and Urban Crime: Kidnapping remains a serious threat in urban centers, including Maputo and Beira, with both locals and foreigners being targeted. General crime, such as armed robbery and carjackings, also continues to be a concern, prompting travel advisories from countries like Australia and Canada warning their citizens to exercise a high degree of caution.

6. Mozambique Culture & Lifestyle: June to August 2025 Snapshot

This briefing summarizes the latest news and trends regarding culture, tourism, and lifestyle in Mozambique from June to August 2025. The period was marked by major cultural events and a strong push to promote tourism as a key economic driver, despite ongoing challenges.

Cultural Vibrancy and National Unity

Mozambique's cultural scene was highly active this quarter, with events focused on national identity and artistic expression.

• National Festival of Culture: The biggest cultural event was the 12th National Festival of Culture held in Tete in August. The festival, which brought together over 1,200 participants from across the country, celebrated the 50th anniversary of national independence with the theme, "50 Years of Consolidating National Unity and Peace Through Culture." President Daniel Chapo opened the event, emphasizing the role of culture in building national identity and promoting peace.

• Art and Literature: In Maputo, a variety of artistic and literary events took place, including the launch of a new book by journalist Omardine Omar, "The Adventures of Detective Malaica Muniga," and a multidisciplinary performance titled "Don't Let the Fire Burn Until Late." These events showcase a vibrant local arts scene.

• International Showcases: On the world stage, Mozambique celebrated its National Day at Expo 2025 in Osaka, Japan, in June. The event aimed to strengthen bilateral relations and project a dynamic image of the country, highlighting its cultural richness and potential for innovation.

7. Mozambique Tourism, Hospitality & Travel:  June to August 2025 Update

Tourism and Economic Development

The government continued to prioritize tourism as a strategic pillar for economic growth, even as the sector faced some significant hurdles.

• Forum on Tourism Investment: In August, Maputo hosted the African Diplomatic Tourism and Investment Forum (ADTIF). The forum underscored the government's commitment to sustainable development and attracting investment in tourism. The Ministry of Agriculture and Environment highlighted new legislation aimed at improving conservation management and making the sector more attractive to investors.

• Tourism Challenges: Despite these efforts, the tourism sector faced challenges. South African airline Airlink threatened to stop selling tickets inside Mozambique due to difficulties in repatriating funds, a symptom of the country's broader foreign currency shortages. Additionally, while coastal areas saw a tourist boom during peak seasons, off-season occupancy rates remained low, creating a challenge for sustainable tourism business models.

• Real Estate and Urban Lifestyle: In Maputo, the real estate market showed moderate growth, with property prices increasing by 3-7% annually by mid-2025. This was driven by economic recovery and foreign investment. The rise in prices was most notable in prime districts like Polana Cimento and emerging suburban areas like Matola, signaling a growing middle class and a shift in urban lifestyle patterns.

8. Maputo News - June to August 2025

Maputo in Focus: June-August 2025 Briefing

This briefing provides an overview of key events and trends in and around Maputo from June to August 2025. This period was characterized by continued political and social tensions, particularly in the aftermath of the 2024 general election, alongside a concerted push for economic development.

Political and Security Landscape

Maputo was a focal point for political and security developments. The city remained on high alert due to ongoing protests and a heavy police presence.

• Political Tensions and Protests: The post-election political crisis continued to fuel discontent. In July, the U.S. Embassy in Maputo issued a security alert warning of potential protests at the airport and other key locations, anticipating the arrival of opposition leader Venâncio Mondlane, a central figure in the post-election disputes. This unrest stemmed from deep-seated frustration with the ruling FRELIMO party and the perception of a rigged election.

• Police Accountability: In a significant move towards justice, the Attorney General's Office initiated 31 criminal proceedings against police officers implicated in the violent suppression of post-election protests. This follows a Human Rights Watch report that implicated police in widespread abuses, including the deaths of over 300 people in Maputo and other cities.

• National Unity and Commemoration: In contrast to the political divisions, the country celebrated its 50th anniversary of independence in June with a grand ceremony in Matola, Maputo Province. The event was marked by a call for national unity and a focus on achieving "economic independence."

Economic Developments

Maputo's economy showed signs of slow recovery but continued to face headwinds from national challenges.

• Improving Economic Activity: A survey by Standard Bank's Mozambican branch indicated that economic activity in the country recorded its strongest growth in two years in July. This was driven by increased new business and an expansion in the construction sector, with firms highlighting new projects in Maputo Province.

• Investment and Growth: The Governor of Maputo Province announced that over the past five years, the province had approved 68 investment projects worth more than $2 billion. This investment reinforces the region's position as the country's economic and industrial hub, particularly in areas like the Beluluane Industrial Park.

• Trade and Infrastructure: The 60th annual Maputo International Fair (FACIM) in August attracted over 3,000 exhibitors from nearly 30 countries, highlighting the city's role as a regional trade hub. The government also launched a $40 million fund to support small and medium-sized enterprises (SMEs), aimed at boosting local economic activity.

Social and Urban Issues

The capital grappled with social issues related to urban management, public health, and security.

• Public Health: The U.S. Embassy in Maputo issued a health alert in August regarding an Mpox outbreak, urging residents to stay informed and take precautions. This highlighted the public health challenges the country faces.

• Urban Management: Maputo's city council began a crackdown on informal street vendors, leading to tensions as vendors were restricted from operating in certain areas, particularly around Praça dos Combatentes. This initiative, aimed at improving traffic flow and public safety, underscores the ongoing challenge of balancing urban development with the livelihoods of the large informal sector.

Maputo Port Activity: June-August 2025 Briefing

The Port of Maputo experienced a challenging but ultimately resilient quarter from June to August 2025. While facing a drop in cargo volumes, the port and its partners pushed forward with major infrastructure projects aimed at reinforcing its strategic role as a regional trade hub.

Cargo Volumes and Trade Challenges

The first half of 2025 was difficult for the Port of Maputo.

• Significant Decline: According to the Maputo Port Development Company (MPDC), the port handled 14 million tons of cargo from January to June, a 14% decline compared to the same period in 2024.

• Reasons for the Drop: This decline was attributed to a combination of factors, including social unrest and protests following Mozambique's disputed 2024 elections, which caused logistical delays. Furthermore, lower ferrochrome exports from South Africa due to that country's electricity constraints also impacted volumes.

• Signs of Recovery: Despite the slump, port CEO Osório Lucas noted a "steep recovery" in recent weeks, with volumes picking up significantly in May and June and into July. The port's dry-bulk terminal handled 6.5 million tons in the first half of the year, with July setting a record with 1.5 million tons handled.

Infrastructure and Expansion Projects

The port's long-term strategy remains focused on massive infrastructure upgrades to increase capacity and competitiveness.

• Expansion Underway: The $2 billion expansion project is moving forward, with the first phase, a $164 million container terminal upgrade, well underway. This project, which began in late January, aims to more than double container capacity from 255,000 to 530,000 TEUs (twenty-foot equivalent units) within the next two years.

• Key Upgrades: The expansion includes extending the quay by 400 meters, deepening the berth draft from 12 to 16 meters to accommodate larger "post-Panamax" vessels, and increasing the number of refrigerated plugs for agricultural exports.

• New Rail Investment: In July, Mozambique secured a €144 million funding package from France and the European Union to upgrade the rail corridor connecting the Port of Maputo to South Africa. The project aims to increase the corridor's freight capacity to 19 million tons per year, which will significantly improve efficiency and reduce the reliance on trucking.