Mozambique’s Economic Outlook

Mozambique country report

Introduction The discovery of large natural gas reserves in the Rovuma Basin has positioned Mozambique as an exciting investment opportunity in Africa. Natural resource discoveries are attracting major investment and demanding a qualified workforce, although the large majority of Mozambique’s workforce does not possess the necessary skills.

Nevertheless, Mozambique’s socioeconomic prospects heavily depend on how effectively government will manage new windfalls going forward as natural gas projects come online post 2020. Regardless of its impressive economic growth performance over the past 15 years, Mozambique remains a low income economy. Recent growth came from a low base, and has not been very inclusive.

The majority of Mozambique’s population is based in rural areas, with just 31.9% of the population living in urban areas. The urban population is growing by 3.3% per year, while the country’s overall average population growth is 2.5%. It is projected that by 2040 around 40% of the population will live in cities.

Despite the country’s current debt conundrum, the projected economic boom associated with the development of the gas sector is expected to have multiple positive externalities for the rest of the economy. To rationalise public operations, promote good governance, improve transparency and reduce fiscal risks, government has approved an independent external audit of public funds and legislation to reform public enterprises.

More privatisations and the closure of public companies is anticipated over the short term given public sector mismanagement and also increased competition from the private sector. This is viewed as a progressive move for the economy in general, and provide numerous opportunities for firms looking to expand into Mozambique.

Please read more Mozambique country report (.pdf)

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