Mozambique flag Mozambique: Economic and Political Overview

The economic context of Mozambique

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Mozambique’s economy recorded average growth rates above 7% of GDP over the period 2000-2016, supported by foreign investment, the rapid growth of the mining sector and the increase in coal and hydrocarbon reserves. However, the economy has slowed down, impacted by a sovereign debt crisis, the passage of tropical cyclones and more recently the Covid-19 pandemic and the war in Ukraine. For the first time in thirty years, GDP contracted by -1.2% in 2020 (IMF). Driven by the full lifting of COVID-related restrictions, a strong vaccination campaign and the start of liquefied natural gas (LNG) production at the Coral South offshore site, GDP growth increased by 3.7% in 2022, from 2.3% in 2021 (IMF). It is expected to further accelerate to 4.9% in 2023 and 8.2% in 2024, supported by offshore gas production and rising mining output (IMF). Among the downside risks are a deterioration of the security situation in the gas-rich Cabo Delgado province, leading to further delays to large gas projects, and the occurrence of natural disasters.

In 2022, despite a challenging global environment, Mozambique’s economy continued to recover from the pandemic-induced recession, boosted by large LNG investments. Solid revenue performance and spending restraint helped improve public finances. Budget deficit decreased from -3.7% GDP in 2021 to -3.4% GDP in 2022 (IMF). According to IMF estimates, fiscal deficit will deteriorate to -4.3% GDP in 2023 before decreasing to -3.4% GDP in 2024 and starting a medium-term consolidation. Public debt decreased from 106.4% GDP in 2021 to 102.4% GDP in 2022, but it is expected to slightly rise to 102.6% GDP in 2023 before reducing to 99.8% in 2024 (IMF). Progress has been made in debt restructuring but Mozambique remains over-indebted. Driven by global fuel and food prices and tropical storms that impacted domestic food supply, inflation soared from 5.7% in 2021 to 11.3% in 2022 (IMF). Tight monetary stance is expected to bring inflation below the central bank’s target of less than 10% in 2023 (8.6%) and 2024 (8.2%) (IMF). In May 2022, the IMF approved a three-year arrangement under the Extended Credit Facility, for about USD 456 million. This program aims to support the economic recovery, reduce public debt and financing vulnerabilities, and foster higher and more inclusive growth through structural reforms. The authorities are committed to an ambitious reform program focusing on establishing a sovereign wealth fund to transparently manage LNG wealth, mobilizing additional tax revenue, and strengthening public financial management and governance (IMF). Among the main challenges identified by the IMF are adverse climate events, a fragile security situation, governance weaknesses and debt vulnerabilities.

Unemployment rate was estimated at 3.9% in 2021 according to the World Bank (modeled ILO estimate). However, according to the African Development Bank, the unemployment rate was 25% in 2018, and among young people it reached 30%. Social inequalities are increasing and a large part of the population lives in poverty (over 63% according to AFDB), especially in rural areas. The northern province of Cabo Delgado, where more than 800,000 people have been displaced due to terrorism, has been particularly affected by increased food insecurity (IMF).

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 19.1621.9423.9625.7227.18
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 581647687718738
General Government Gross Debt (in % of GDP) 95.589.792.490.287.5
Inflation Rate (%) n/a7.
Current Account (billions USD) -6.30-3.51-9.41-11.13-12.26
Current Account (in % of GDP) -32.9-16.0-39.3-43.3-45.1

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Mozambique is rich in natural resources and produces a large variety of agricultural products. It benefits from huge offshore gas fields discovered in 2010, which could turn the country into one of the main LNG producers in sub-Saharan Africa. It also has significant coal reserves and hydroelectric potential, and possesses the world’s largest reserves of tantalite. It is the 14th largest producer of cassava and a major producer of oilseeds (FAO, 2021). Although agriculture employs 70% of the country's active population, it represents only 27.5% of GDP (World Bank, 2021). Most agricultural production comes from family farms, but the sector is particularly vulnerable to natural disasters such as droughts and floods. The main crops in the country are corn, cassava, beans, rice and a variety of vegetables and oilseeds.

Mozambique’s natural resources include recently discovered gas and coal, high-quality iron ore, gold, bauxite, graphite, marble and the rare mineral tantalite. The manufacturing sector is still weak, and is dominated by the production of the Mozal aluminium smelter. Overall, the industrial sector contributes to 21.9% of the country's GDP and employs 9% of the active population.

The service sector represents 40.1% of GDP, and accounts for more than one fifth of total employment (21%). Tourism is the main industry, although it is still performing well below its potential. In addition to expanding financial services, the tertiary sector has a growing number of micro-scale retail businesses.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 70.3 9.3 20.5
Value Added (in % of GDP) 27.5 21.9 40.1
Value Added (Annual % Change) 4.4 3.9 4.4

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

See the country risk analysis provided by Coface.

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Sources of General Economic Information

Ministry of Agriculture and Rural Development
Ministry of Energy and Mineral Resources
Ministry of Culture and Tourism
Ministry of Industry and Trade
Ministry of Economy and Finance
Statistical Office
National Institute of Statistics
Central Bank
Central Bank
Stock Exchange
Stock Exchange of Mozambique
Economic Portals
Institute of Social and Economic Studies (IESE - Instituto de Estudos Sociais e Económicos)

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Latest Update: December 2023