Despite Mozambique’s long-standing potential for investment, the business environment remains fraught with significant challenges. While the Central Bank has succeeded in stabilizing the exchange rate and controlling inflation, there are problems to access U.S. dollars from the banking system. Although the Central Bank lowered its Monetary Policy Rate to 9.25% in January 2026, credit remains largely inaccessible to many local businesses and individuals. 

The government has repeatedly emphasized its commitment to attracting large-scale investments through public statements and economic reforms, yet Mozambique’s bureaucratic system often fails to address the needs of the private sector, particularly small and medium-sized enterprises. Many businesses cite the cumbersome regulatory environment and a lack of skilled labor as major hurdles to scalable growth. In addition, a top-down, hierarchical approach to decision-making undermines market efficiency. These issues, combined with recent political protests, highlight growing frustrations with the government’s ability to implement meaningful reforms and create a more conducive environment for private sector. 

Even though Mozambique’s labor force continues to grow, the labor market remains rigid, and well-educated workers are in short supply. One of the country’s most pressing challenges is the ongoing shortage of skilled labor, which is reflected in its ranking of 182 out of 193 countries on the United Nations’ 2025 Human Development Index. This shortage remains a key barrier to economic growth and development. In response to these labor market issues, the Mozambican parliament passed a revised labor law on August 25, 2023. The new legislation introduced a range of reforms aimed at improving worker rights and conditions, including provisions on harassment, mixed remuneration, alternative work schedules, and the suspension of employment due to force majeure. It also introduced measures to promote equal treatment for both foreign and domestic workers, marking a step toward improved and consistent labor practices.

Land Rights

In Mozambique, private land ownership is not allowed, but land can be leased from the government for renewable 50-year terms. The 1997 Land Law grants a land use right (Direito do Uso e Aproveitamento da Terra, or DUAT), which functions as a long-term lease. While DUATs provide the right to use land, they do not confer indefinite ownership of the land itself, or any resources found on said land. Therefore, DUATs are not easily leveraged as collateral for financing. In addition, acquiring a DUAT and securing construction permits can be a lengthy and complex process. As a result, businesses are advised to approach land leasing with caution and consult local legal experts to ensure the legitimacy of sellers and the legality of transactions.

In 2023, Mozambique’s parliament passed an investment law designed to facilitate the transfer of DUATs. The government has also begun efforts to revise the Land Law to improve transparency and create a more market-friendly environment. However, it remains unclear when these reforms will take effect and whether they will adequately address the challenges related to the transferability and bankability of DUATs.

Infrastructure

While significant improvements are being made, particularly in Maputo and other urban centers, much of Mozambique still suffers from inadequate infrastructure. Roads are generally poor, with the exception of key stretches of the EN1 highway (which runs north to south) and the EN4 highway connecting Maputo to the South African border. Many bridges are prone to being washed out during the rainy season, and the government often lacks the resources to rebuild them in a timely manner. Asphalt roads in many areas are deteriorating, riddled with potholes, and make travel slow and hazardous. Secondary and tertiary dirt roads are frequently in poor condition. The London School of Economics and Political Science’s Growth Lab’s Mozambique Growth Diagnostic Study finds that poor infrastructure, a burdensome regulatory environment, and a stagnant agricultural sector hinder economic diversification and inclusive growth. The report recommends infrastructure improvements and regulatory reforms to unlock the country’s economic potential.

Mozambique is divided into three east-west development corridors that link its ports to inland parts and neighboring countries: the Maputo Corridor (south; linked with South Africa and Eswatini), the Beira Corridor (center; linked with Zimbabwe), and the Nacala Corridor (north; linked with Malawi and Zambia). These corridors include multiple transport logistics and industrial developments, which are all in different stages of expansion and repair. These corridors are also used to move goods to and from neighboring land locked countries (Malawi, Zambia, and Zimbabwe).

Although the government is working to expand electricity access, particularly through renewables and microgrids, less than 40 percent of the population had consistent access to electricity in 2023, according to the World Bank. Some mines and other heavy industries lack sufficient electricity and must run diesel generators for their operations. 4G and 5G mobile phone coverage is largely limited to urban areas, with rural regions often operating on 3G networks or no coverage. U.S. company Starlink’s entrance into the Mozambican market in 2022 has helped expand internet access in rural areas for customers who can afford it.  According to World Bank Data, less than 20% of the Mozambican population had access to Internet services in 2023. Other communication networks also remain underdeveloped.  

Access to Finance

Inflationary pressures have forced the Central Bank to maintain a tight monetary policy, characterized by relatively high interest rates and stringent reserve requirements for commercial banks. As a result, access to finance remains a significant challenge for both individuals and businesses. Commercial banks typically charge high interest rates (prime rate stands at 15.6% as of March 2026), partly due to the absence of established credit history or rating systems, which makes it difficult for small and medium-sized enterprises (SMEs) to secure affordable financing. 

Domestic public debt has reached 454.4 billion meticais (about USD 7.1 billion), an increase of nearly 39 billion meticais (about USD 610 million) since December 2024. The reliance on short-term domestic borrowing is straining treasury bill and bond markets, crowding out private investment, and complicating the government’s ability to finance its budget. In addition, payments for imported goods can be complicated, as foreign currency transactions require approval from the Central Bank. In 2025, multinational and local companies complained that persistent challenges obtaining foreign currency from the banking system affected their ability to provide goods and services.

Political Unrest

Following the October 2024 Presidential elections, political protests in Mozambique were driven by growing public frustration with undemocratic processes, lack of economic opportunity, corruption, and the slow pace of reforms. These protests, which largely affected urban centers like Maputo but also coincided with invasions of mines and other businesses by local communities in various parts of the country, disrupted daily life and raised concerns among investors about the country’s stability. A heavy-handed police response contributed to over 300 deaths. While the new government under President Daniel Chapo had effectively restored order in most parts of the country in early 2025, the period of unrest dampened investor confidence, and was expected to further hinder economic growth, and exacerbate challenges such as inflation, unemployment, and inadequate public services, all of which have been cited by observers as drivers of instability.

Lack of Transparency

Lack of transparency in government procurement processes and slow decision-making can lead to delays in projects and, in some cases, render them unsustainable. While Mozambican law mandates public tenders for government projects exceeding $10 million, tenders are often not issued as required. Moreover, when tenders are issued, they are sometimes not conducted fairly, undermining competition and accountability.

Due Diligence Concerns

The U.S. law enforcement community advises businesses and investors to exercise caution and conduct thorough due diligence when engaging in ventures in Mozambique. This is due to the frequent use of legitimate businesses to conceal illicit activities, the prevalence of trade-based money laundering, and widespread corruption across various government sectors. By taking these precautions, both U.S. and Mozambican trade partners can protect their best interests.

In response, the government of Mozambique is working to strengthen its legal and regulatory framework for anti-money laundering (AML) and countering the financing of terrorism (CFT), following its addition to the Financial Action Task Force’s (FATF’s) “grey list” of jurisdictions under increased monitoring in October 2022.  In October 2025 Mozambique was removed from the “grey list”.

The U.S. government recommends that U.S. businesses seek assistance from trusted auditing and consulting firms or the U.S. Commercial Service to receive local market advice and help vet potential local partners.