Doing business in Mozambique today is a combination of resilience, risk assessment and adaptability. The local business environment continues to be marked by logistical challenges, a restricted credit market, complex bureaucracy and an institutional system that is still consolidating. On the other hand, infrastructure is gradually improving, the urban middle class is growing and there are signs of diversification in sectors such as energy, agro-industry, logistics, digitalisation and construction.
Those who undertake business in the country know that opportunities exist, but they must navigate between structural limitations and fluctuations in confidence. And it is in this scenario that Foreign Direct Investment (FDI) plays a decisive role. FDI does not function only as an inflow of foreign capital, but above all as a catalyst that can accelerate projects , expand supply chains and introduce new technologies and skills to the local market.
When we look at current FDI levels, we see that Mozambique continues to be a relevant destination on the African continent. In 2023, the country was the sixth largest recipient of FDI in Africa, with estimated inflows of US$2.5 billion, a clear sign that, despite the risks, large investors continue to see strategic value in the Mozambican market.
But what is really driving these investments? And more importantly, how can local business owners, managers and entrepreneurs position themselves to take advantage of this dynamic?
In the particular case of Mozambique, the answer lies mainly in the confidence that investors place in the country’s vast natural reserves, energy potential and the expectation of high returns in strategic sectors such as natural gas, coal, electricity and port logistics. Foreign investment has been strongly driven by megaprojects such as the exploration of the Rovuma basin, including the Coral Sul FLNG, Africa’s first floating deepwater liquefied natural gas project , as well as developments led by TotalEnergies and ExxonMobil , currently in the preparation phase for recovery.
In addition to the energy sector, foreign interest is also evident in logistics corridors such as Nacala and Beira, which offer strategic access to regional markets, and in the hydroelectric potential of projects such as Mphanda. Nkuwa , identified as one of the largest future investments in energy generation for export. These elements reinforce the perception of Mozambique as a relevant destination for international capital, despite the institutional and security challenges that still need to be overcome.
How Much Investment Has Mozambique Received?
Between 2002 and 2022, Mozambique accumulated more than US$40 billion in FDI, with significant peaks between 2012 and 2013. Around 70% of this investment was concentrated in the mineral resources sector, especially natural gas, coal and oil. With the expected resumption of major projects in the Rovuma basin, it is estimated that FDI could exceed US$50 billion in the coming years.
While the extractive sector remains dominant, diversification is underway. Sectors such as agribusiness, renewable energy, logistics, telecommunications, tourism and manufacturing are attracting increasing interest, driven by factors such as urban growth, infrastructure improvements and rising domestic and regional demand. This diversification is essential to reduce vulnerability to fluctuations in the international commodity market .
In addition to large investments, there is promising space for small and medium-sized entrepreneurs. Underexplored value chains such as commercial agriculture, fish farming, food production, construction materials and digitalization of services are gaining momentum. Legal instruments such as special economic zones (SEZ) and industrial parks, such as Beluluane , offer tax and customs incentives that can make businesses viable and attract more agile and innovative investors.
How Does the Legal Framework for FDI Issues Work?
The legal framework governing FDI is relatively stable and is based on the Investment Law and its regulations. These rules provide protection against expropriations without compensation, allow for the repatriation of profits and provide tax incentives such as VAT exemptions and reduced income tax.
How Can Local Entrepreneurs Benefit from FDI?But despite the solid legal framework, investors still face obstacles such as bureaucracy, fiscal instability, legal risks, lack of infrastructure and shortage of skilled workers. In addition, persistent insecurity in the north of the country continues to undermine confidence.
How Can Local Entrepreneurs Benefit from FDI?
FDI can open up multiple opportunities for Mozambican entrepreneurs, businesspeople and entrepreneurs. By integrating into supply chains created by foreign investors, local entrepreneurs can provide essential goods and services, from food, transportation and construction to consulting, security and information technology.
Mozambican companies can also form joint ventures with foreign investors, benefiting from technology transfer, good management practices and access to international markets. Another important benefit is the development of industrial hubs and special economic zones, where local entrepreneurs can set up shop with advantageous tax conditions, easy access to energy and proximity to major international customers.
Furthermore, FDI can boost the development of related sectors, such as technical training and specialized financial services, creating a more robust ecosystem for the growth of small and medium-sized enterprises.
By creating an environment conducive to productive and inclusive investment, Mozambique could become an example of how foreign capital can coexist with sustainable growth and shared prosperity.
