Mozambique is a Portuguese-speaking country located in Southern Africa along the Indian Ocean. With a surface area roughly the size of Texas and Louisiana, the country’s coastline is over 1,600 miles long, extending from Tanzania to South Africa, or roughly the distance from Miami, FL, to Portland, ME. The economy is recovering from a slowdown during the COVID-19 pandemic. Growth reached 4.4% in the first half of 2022. According to the World Bank, the medium-term economic outlook is positive. Growth is expected to accelerate to 6%-7% between 2023 and 2025, driven by the countinued recovery in services, increased liquied natural gas (LNG) producton, and high commodity prices. However, an ISIS-affiliated insurgency in the northern province of Cabo Delgado, global energy companies’ decisions on whether or not to move forward with large onshore LNG projects, commondity price instability related to Russia’s invasion of Ukraine, as well as low levels of human capital, corruption, poor infrastrucutre, complicated and unclear bureaucratic processes, and the country’s vulnerability to climate disasters are prominent risks that contribute to uncertainty in the Mozambican market.
In response to the suspension of international funding to the government’s budget, as well as the aforementioned risks, the Mozambican Government launched the Pacote de Medidas de Aceleração Económica (PAE) in August 2022. This economic acceleration stimulas package initiated by President Filipe Nyusi aims to put the private sector at the center of the country’s economic development. President Nyusi’s administration has expressed interest in completing these reforms by the end of his term in 2024. The reforms are divided into two areas, a set of fiscal and economic reforms and improvements to the business environment. While implementation still remains to be seen, the government has made good progress so far, such welcome reforms implementing an online visa application system and no-visa tourism from select countries, including the United States. As written, the reforms would make it easier for U.S. companies across all sectors, but most specifically in agriculture and power generation, to enter the market and move capital in and out of the country.
In June 2019, the Government of Mozambique and the United States Department of Commerce entered a Bilateral Memorandum of Understanding on Commercial Relations and Priority Projects to help facilitate trade and investment in the areas of agribusiness, energy, infrastructure, fisheries, financial services, and tourism —the first ever negotiated between the two countries.
South Africa is Mozambique’s largest trading partner. China, India, the Netherlands, and Portugal are also important trading partners. U.S. and French investment in the energy sector – particularly by TotalEnergies and a consortium led by ExxonMobil in natural gas projects in the Rovuma Basin in the northern province of Cabo Delgado – are expected to create significant demand for U.S. exports once the projects move forward, and the two countries may be among the largest investors in Mozambique over the next decade.
Mozambique is dependent on donor support many of its development needs. The largest bilateral donor of development assistance is the United States, which had over $800 million bilateral assistance to Mozambique in fiscal year 2022, primarily implemented through the US Agency for International Development, and focused on the health, education, agriculture, governance, and environment sectors. In September 2023, the United States’ Millenium Challenge Corporation (MCC) and the Government of Mozambique signed Mozambique’s second MCC compact, or Compact II, which intends to invest $537 million over five years in rural infrastructure, agriculture, climate change mitigation in Mozambique’s central Zambezia Province. The U.S.-supported World Bank and Africa Development Bank (AfDB) annually are the largest financiers of infrastructure development in Mozambique.
Basic Economic Statistics (2022):
· Total Population: 33 million
· Nominal GDP: $18 Billion
· Nominal GDP Per Capita: $544
· GDP Growth Rate (% Change): 4.1%
· Inflation (% Change from Prior Year): 9.8%
U.S. Goods Trade with Mozambique in 2022
· U.S. Exports to Mozambique: $235 million
· U.S. Imports from Mozambique: $177 million
U.S. Trade with Mozambique Top 5 Products in 2022
Imports:
1. Miscellaneous Manufactures ($87 million)
2. Minerals & Ores ($51 million)
3. Processed Foods ($15 million)
4. Goods Returned ($8 million)
5. Nonmetallic Mineral Products ($7 million)
Exports:
1. Petroleum & Coal Products ($94 million)
2. Chemicals ($82 million)
3. Transportation Equipment ($12 million)
4. Machinery, Except Electrical ($11 million)
5. Processed Foods ($6 million)
More information can be found on ITA’s Industry & Analysis Country Reports.
Political Environment
Visit State Department’s website for background on the country’s political and economic environment.