According to Research and Markets, Mozambique’s construction industry is set to grow 3% in 2025, fueled by key infrastructure projects such as Total Energies LNG and Port of Maputo. However, infrastructure development is challenged by political unrest and natural disasters. Nevertheless, financial analysts foresee a significant increase in construction activity starting in 2026, driven by the development of two major liquified natural gas (LNG) plants in Cabo Delgado province. The Millennium Challenge Corporation signed a $500 million (and $37.5 million in government contribution) Mozambique compact in September 2023. 

The Mozambique Compact was strategically designed to stabilize a resource-rich nation by constructing and rehabilitating roads and bridges along the central transportation and trade routes in Zambezia and along the Nacala corridor, improving fiscal responsibility, restoring regional fisheries, and improving governance in the mining sector. These projects as well as other channeled investments in transport infrastructure, electricity transmission grids, and hydropower are expected to boost government revenues and promote long-term investment in Mozambique’s infrastructure. The London School of Economics (LSE) conducted a Mozambique Growth Diagnostics study, commissioned by the U.S. government, identifying infrastructure and burdensome regulatory environment as key constraints to economic growth, hindering private investment and economic diversification. 

A Portuguese-speaking country and former Portuguese colony until 1975, Mozambique’s construction activities were largely carried out by Portuguese companies and targeted a portfolio of civil and public works. The sector has grown to include energy, transportation, and ICT projects initiated by various international corporations. Chinese companies experienced market share growth over the last decade, leading projects in housing, roads, sports facilities, airports, and government buildings. Two landmark projects financed by the Chinese government include the Maputo Ring Road and Africa’s longest suspension bridge spanning the Maputo Bay to connect Maputo with Katembe inaugurated in 2018.  Other major competitors come from Brazil, South Africa, and Turkey. 

Financing remains a major drag on investment and growth as the government struggles to raise capital for infrastructure projects in the country and international financiers shy away from offering loans. Ambiguous public-private partnership (PPP) rules, concession laws, and regulatory frameworks hinder private sector capital investment. Additionally, the economy is hampered by complicated bureaucratic processes and a lack of communication among institutional and private investors. Finally, as in other sectors, Mozambique’s design and construction industry lacks skilled labor.

Leading Sub-sectors

Low-Cost Residential Solutions

Mozambique continues to register high poverty rates. The World Bank highlights that more than half of the population lives under the poverty line and cannot afford adequate housing. The Government of Mozambique offers housing and construction finance through public-private partnerships. However, most housing is funded through short and medium-term consumer loans. Additionally, depending on the availability of the land, large-scale projects may be responsible for implementing resettlement plans to restore and improve the lives of the displaced. The government’s cyclone reconstruction cabinet (GREPOC) states that 300,000 households were damaged by cyclone Idai (2019) in Beira and are yet to be resettled.

Commercial & Institutional Buildings

According to the African Investor, the expected massive economic growth in Mozambique will increase demand for housing and commercial spaces, driving up property value and rental income potential. Previously, the Government of Mozambique funded the modernization of its ministries and institutes. However, such funding stalled beginning in 2016 due to public expenditure constraints. Most projects are developed and financed by the local private sector and development finance institutions. 

Sustainable & Resilient Infrastructure

Due to its coastal position, Mozambique is vulnerable to natural hazards, including cyclones, floods, and coastal erosion. After the devastation from cyclones Kenneth and Idai in 2019, International donors allocated $1.2 billion towards repairing damage from the cyclones, but the government estimated that $3.2 billion will be required to conclude adequate restoration. After witnessing the damage caused by cyclone Idai in Central Mozambique, the Government of Mozambique created the Post-Cyclone Idai Reconstruction Office to supervise planning, implementation, monitoring, evaluation, recovery and reconstruction in affected provinces. National projects range from installing prefabricated modular steel bridges and constructing dams and water reservoirs to closing unsafe landfills – which are prone to landslides - in favor of more modern waste disposal systems.  

Water & Sanitation

According to World Vision, 37% of the Mozambican population lacks access to basic water services. However, high discrepancies persist in water and sanitation access between people who live in rural and urban areas. The Mozambique government committed to universal access to safe drinking water, sanitation, and hygiene services by 2030. Such efforts involve transforming water systems from wells, boreholes and traditional latrines to small scale water management and treatment infrastructure. Additionally, the Government of Mozambique announced its National Urban Water Supply and Sanitation Strategy which targets to commit US $3.1 billion to establish urban water infrastructure projects within the years 2022-2032. Projects include treatment and desalination plants, transmission mains, distribution centers as well as a pump station.  

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