Opportunities in Transport and Logistics Infrastructure in Mozambique
Opportunities in Transport and Logistics Infrastructure: Road and Rail Networks in Mozambique
Mozambique's strategic position as a coastal gateway to Southern Africa's landlocked economies makes its transport and logistics infrastructure a cornerstone of regional trade and investment. As outlined in Pillar 3 of the National Development Strategy (ENDE) 2025–2044, the government is prioritizing upgrades to road and rail networks to support Special Economic Zones (SEZs) like Nacala and Manga-Mungassa. This includes rehabilitating the N1 highway and expanding the Nacala and Maputo rail corridors, with ambitious targets such as adding 2,000 km of new rail lines. Public-Private Partnerships (PPPs) are central to these efforts, unlocking billions in investments through models like Build-Operate-Transfer (BOT) and Rehabilitate-Operate-Own-Transfer (ROOT). As of September 2025, recent funding announcements—totaling over US$1.1 billion for the N1 alone and €145 million for Maputo rail—signal strong momentum, positioning Mozambique as a logistics hub under the African Continental Free Trade Area (AfCFTA). For investors, these projects offer high ROI (15–25%) in construction, operations, and ancillary services, while fostering synergies with SEZs for agro-processing, mining, and manufacturing exports.
Upgrading the N1 Highway: Enhancing North-South Connectivity
The N1 (EN1), Mozambique's primary north-south artery spanning 2,620 km from the South African border to the Tanzanian frontier, is critical for domestic freight and regional trade. Chronic underinvestment has led to frequent disruptions from floods and poor maintenance, but 2025 marks a turning point with multi-billion-dollar rehabilitation programs. These upgrades will improve road safety, reduce transit times by up to 30%, and alleviate congestion on parallel corridors, directly benefiting SEZs by facilitating raw material inflows and finished goods outflows.
Key Developments and Targets
- US$1.1 Billion Rehabilitation Program: Launched in May 2025, this initiative—backed by the World Bank (US$850 million initial phase), Saudi Fund for Development (US$50 million), and other partners—targets 340 km in the first phase, focusing on high-traffic sections like Benfica-Zimpeto and 3 de Fevereiro-Incoluane. The full program aims to rehabilitate 1,053 km of priority routes to a 7-meter carriageway with sealed shoulders, enhancing resilience to cyclones.
- Private Sector Advocacy: In February 2025, the Confederation of Economic Associations (CTA) urged comprehensive N1 upgrades to support post-election economic recovery, emphasizing tax relief and burden reduction for logistics firms.
- Regional Impact: Improved N1 connectivity will link southern SEZs (e.g., Macaneta Tourism Resort) to central hubs like Beira, boosting tourism and agro-exports. The African Development Bank (AfDB) is co-financing complementary projects, such as the 287-km Beira-Zimbabwe road rehabilitation.
Investment Opportunities
- PPP Models: BOT concessions for tolling, maintenance, and smart infrastructure (e.g., IoT-enabled traffic management). Estimated project value: US$400 million for initial phases, with opportunities for equipment suppliers and engineering firms.
- Ancillary Services: Contracts for rest areas, fuel depots, and EV charging stations along the route, aligning with green transition goals.
- Risk-Return Profile: Low political risk in southern stretches; 10–15-year concessions with revenue from tolls and freight surcharges. Contact ANE (National Road Administration) via APIEX for Expressions of Interest (EoIs).
Expanding the Nacala Rail Corridor: Northern Gateway to Landlocked Markets
The Nacala Corridor, a 1,026-km multimodal route linking the Port of Nacala to Malawi and Zambia, is pivotal for mineral exports (e.g., coal from Tete) and agricultural trade. ENDE targets integrate it with SEZs like Nacala (1,539 km², focusing on logistics and agro-processing), aiming to double capacity and create an East-West link to Angola's Lobito Corridor. Recent Japanese investments underscore its role in critical minerals supply chains.
Key Developments and Targets
- US$7 Billion Japanese Commitment (2025): Announced at the Tokyo International Conference on African Development (TICAD), this funding—via JBIC, NEXI, and AfDB—focuses on railway expansion (up to 2,000 km new lines), port upgrades, and border modernization. It supports projects like the 912-km Moatize-Nacala line (capacity: 22 million tonnes/year) and links to Malawi's Kasiya Rutile-Graphite mine.
- AfDB and Tripartite Agreements: US$2.7 billion Nacala Rail and Port Project (ongoing since 2017) rehabilitates 682 km and builds 230 km of new track, with 2025 extensions to Zambia. A tripartite pact with Malawi and Zambia standardizes operations.
- Port Integration: Nacala Port's 2025 expansion (US$249 million JICA loan) handles 50% more containers, supporting SEZ projects with refrigerated cargo for agro-exports.
Investment Opportunities
- PPP Models: ROOT/BOOT for rail rehabilitation and dry ports; e.g., Mota-Engil's 245-km Malawi sections (US$500+ million total corridor value).
- Logistics Hubs: Develop intermodal facilities in Nacala SEZ for warehousing and last-mile distribution, with ESG focus on green rail (e.g., solar-powered sidings).
- Risk-Return Profile: High growth from mineral booms; 20-year concessions with offtake guarantees from Vale/Mitsui. Mitigate northern security risks via SADC partnerships.
Expanding the Maputo Rail Corridor: Southern Trade Engine
The Maputo Corridor, a 600-km route connecting South Africa's Gauteng industrial heartland to Maputo Port, handles 30 million tonnes annually and supports SEZs like Manga-Mungassa (217 ha, industry/logistics focus). Upgrades aim to shift 65% road freight to rail, reducing emissions and costs while easing N4 highway congestion.
Key Developments and Targets
- €145 Million EU-France Funding (2025): Signed in mid-2025, this doubles the Ressano Garcia-Maputo line (capacity: 19 million tonnes/year) and modernizes signaling, under Global Gateway. Phase 2 (US$80 million) targets 20 million tonnes by 2030.
- Port and SEZ Synergies: DP World's US$2 billion Maputo Port extension (2025 concession renewal) integrates with Nkomazi SEZ for value-added manufacturing. MPDC-CFM partnership rehabilitates Machipanda Line (US$150 million).
- CFM's €193 Million Rail Plan (2025–2030): Includes line duplications and rolling stock acquisitions for southern/central systems, boosting SEZ access.
Investment Opportunities
- PPP Models: DBOOT for rail expansions and dry ports; e.g., Lebombo Dry Port upgrades for border efficiency.
- SEZ Linkages: Industrial parks in Manga-Mungassa for logistics tech (e.g., automated warehousing), with tax holidays under Investment Law.
- Risk-Return Profile: Stable southern corridor; 15-year concessions with trade volume guarantees from South Africa (US$2+ billion annual bilateral trade).
UTE SEZ: Emerging Hub for Dry Ports and Logistics PPPs
The UTE Special Economic Zone (681 ha in Niassa Province) allocates 152 ha for a dry port, positioning it as a northern logistics node linked to the Nacala Corridor. Created in 2019, UTE targets industrial and trade facilitation, with PPPs for intermodal facilities to serve mining and agriculture.
Key Developments and Targets
- Dry Port Focus: 2025 plans integrate UTE with Nacala rail for container handling, reducing road dependency. APIEX is soliciting PPPs for US$100–200 million in hub development.
- Broader Context: Aligns with ENDE's 2,000 km rail goal; potential East-West extensions via Lobito enhance UTE's role.
Investment Opportunities
- PPP Models: BOT for dry port construction/operation, including customs tech and warehousing.
- Value Chain Integration: Link to Niassa's resources for export processing; incentives include IRPC exemptions.
- Risk-Return Profile: Emerging but high-potential; 10–20% ROI with AfDB guarantees.