Mozambique positions itself as an attractive destination for Foreign Direct Investment (FDI), emerging as a key player in the economic growth of Southern Africa. With vast natural resources, arable land, and a strategic location along the Indian Ocean, the country continues to capture the attention of global investors. However, for 2025, investment prospects remain shaped by a balance between significant opportunities and structural challenges.
Promising Sectors for Investment
Energy and Natural Resources
The energy sector stands out as the primary attraction for foreign investors, with a particular focus on liquefied natural gas (LNG) projects in the Rovuma Basin, which have garnered the interest of multinationals such as TotalEnergies and ExxonMobil. These projects, in addition to promising significant revenue for the country, have the potential to transform Mozambique into one of the world’s largest natural gas exporters.
Beyond gas, mineral resources such as coal, graphite, and rubies continue to draw investors, especially from Asia and Europe. Mozambique is one of the largest producers of high-quality graphite, which is essential for manufacturing lithium-ion batteries, driving the global energy revolution.
Agriculture and Agro-Processing
With over 36 million hectares of arable land, only a small percentage is being efficiently cultivated. This presents a unique opportunity for investment in cash crops such as cotton, cashew, sugar, and horticulture. The growing global demand for food positions agriculture as a promising area for FDI expansion.
Additionally, the development of agro-processing units to locally transform agricultural products could enhance Mozambique’s competitiveness in the global market while generating jobs and promoting rural development.
Tourism
With diverse landscapes that include stunning beaches, natural reserves, and unique cultural heritage, Mozambique presents itself as an emerging tourist destination. Locations such as the Bazaruto Archipelago and the Niassa National Reserve attract tourists seeking authentic and exclusive experiences. The development of modern tourist infrastructure, including hotels, resorts, and transport networks, is essential to unlocking the sector’s growth potential.
Regulatory and Structural Challenges
Legal Environment and Bureaucracy
While Mozambique has made progress in regulatory reforms, the legal framework for FDI still presents significant challenges. The law governing Land Use and Benefit Rights (DUAT) remains a barrier for foreign investors, as land is state-owned and only granted under specific conditions.
Additionally, bureaucracy in licensing processes and a lack of clarity in fiscal policies often discourage long-term investments. Simplifying these processes is a priority to enhance the country’s competitiveness.
Infrastructure and Connectivity
The insufficiency of transport, energy, and communication infrastructure is one of the main obstacles to economic growth. Ports such as Maputo, Beira, and Nacala play a crucial role in international trade but require modernization to meet growing demand.
The development of road and rail networks connecting production regions to international markets is also essential to reducing logistics costs and increasing Mozambique’s appeal to investors.
Political Instability and Risk Perception
Although efforts to stabilize the political situation and combat insecurity in northern Mozambique are noteworthy, perceptions of risk associated with armed conflicts and corruption continue to concern investors. Improving transparency and strengthening the rule of law are critical steps to ensuring investor confidence.
Initiatives to Attract FDI
Government Reforms and Incentives
The Mozambican government, through the Investment and Export Promotion Agency (APIEX), has implemented fiscal and financial incentives to attract investors. These include tax exemptions, visa facilitation, and access to special economic zones such as Nacala, which offer favorable investment conditions.
Moreover, the National Development Strategy (ENDE) 2025-2044 prioritizes creating a business-friendly environment, emphasizing the need to diversify the economy and promote industrialization.
Public-Private Partnerships (PPPs)
PPPs have been promoted as a viable model for developing essential infrastructure and services. These partnerships enable investors to participate in strategic projects such as constructing roads, ports, and power plants, ensuring sustainable returns.
Prospects for 2025
For 2025, Mozambique faces a promising but challenging landscape. Success in attracting and retaining foreign investments will depend on deep reforms, infrastructure modernization, and political and economic stability.
While sectors such as natural gas, agriculture, and tourism continue to lead as growth areas, the country must focus on economic diversification and strengthening institutional capacities. Mozambique has the potential to become a leading FDI destination in Southern Africa, but only with an integrated and strategic approach will it be possible to turn opportunities into tangible realities.
