Foreign Direct Investment
Mozambique is an important destination country for FDI in South-East Africa. The country recorded historically high FDI inflows levels in 2013, reaching more than USD 6 billion. According to the UNCTAD’s World Investment Report 2022, FDI inflows into the country increased by 68% to USD 5.1 billion in 2021, up from USD 3 billion in 2020. In 2021, the stock of FDI was about USD 50.1 billion. The country saw a jump in greenfield projects, including UK-based Globeleq Generation’s plan to build power plants for USD 2 billion. According to UNCTAD’s Investment Trends Monitor, global FDI momentum weakened in 2022 in the context of the war in Ukraine, rising food and energy prices, financial turmoil and debt pressures.
The implementation of the USD 20 billion investment led by TotalEnergies (France) in the liquefied natural gas (LNG) project has been suspended due to insecurity in Cabo Delgado, and the project led by Exxon Mobil in export terminals has also been delayed. However, the Eni-led Floating LNG platform began LNG production end 2022, with projected production of 3.4 million tons per annum. Foreign investors are primarily interested in the country's mining, hydrocarbon, energy, logistics, retail and real estate sectors. There is also a growing interest in the coal industry. Mozambique's main foreign investors are Mauritius, the United Arab Emirates, the Netherlands, Portugal, the United Kingdom, India and China (IMF).
The government has consistently implemented reforms, maintained sound economic policies, and put in place a privatisation programme for public companies to attract FDI. In addition to its abundant natural resources, the country's access to the sea provides a significant advantage compared to its land-locked neighbours. The country has significant and varied natural resources (energy, mines, agriculture, forestry, and fishing) and its geographical location offers a serious advantage in the transportation field. However, the hidden debts scandal that broke in 2016, still unresolved, tarnished the image of the government and impacted investors’ confidence in the economy. The Islamist insurgency in Cabo Delgado, a key region for gas production causes delays in LNG projects. Poor governance, an unstable political and security environment, inadequate transport and port infrastructure, vulnerability to natural disasters and the current sovereign debt crisis are the main factors hampering FDI.
| Foreign Direct Investment | 2020 | 2021 | 2022 |
| FDI Inward Flow (million USD) | 3,035 | 5,102 | 1,975 |
| FDI Stock (million USD) | 46,280 | 50,068 | 54,114 |
| Number of Greenfield Investments* | 8 | 8 | 7 |
| Value of Greenfield Investments (million USD) | 705 | 2,463 | 1,369 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Country Comparison For the Protection of Investors | Mozambique | Sub-Saharan Africa | United States | Germany |
| Index of Transaction Transparency* | 5.0 | 5.5 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 4.0 | 3.5 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 7.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
