The government of Mozambique intends to reorient its economic policy to reduce the country’s heavy dependence on the extractive industry, focusing instead on developing value chains and strengthening productive sectors with stronger multiplier effects.
According to the Portuguese news agency Lusa, the plan is outlined in the 2025 State Budget execution report prepared by the Ministry of Finance of Mozambique, which highlights structural weaknesses in the national economy and the need for “robust and consistent” economic measures to stimulate key productive sectors.
The report notes that the economy has recently recorded relatively low growth, requiring a more prudent and selective economic policy approach capable of addressing structural weaknesses and avoiding the constraints seen in recent years.
It also argues that policies which deepen the concentration of growth in primary sectors—particularly the extractive industry—should be discouraged when they are not accompanied by the development of value chains capable of generating greater added value in the economy.
Similarly, the document states that the expansion of current public expenditure without a direct impact on productive capacity, as well as the dispersion of public investment across projects with limited economic impact, has been insufficient to prevent the contraction of Gross Domestic Product (GDP).
Data from the National Institute of Statistics of Mozambique (INE) show that the economy recorded a recovery in the last quarter of 2025, interrupting four consecutive quarters of decline. During that period, GDP grew 4.67% year-on-year, although the year still closed with an annual contraction of 0.52%.
The negative trajectory throughout 2025 was largely linked to the economic consequences of violent protests following the general elections of 9 October 2024 in Mozambique. The unrest lasted more than five months, causing over 400 deaths and the destruction of businesses and public infrastructure in several regions of the country.
According to the report, priority sectors for economic recovery include manufacturing, energy, construction, agriculture and logistics services, all of which have strong multiplier effects on the economy.
Despite recent developments, the country’s economic structure remains heavily dependent on coal and natural gas extraction, which dominate national exports, according to data previously released by the Bank of Mozambique.
The report also warns that policies undermining macroeconomic stability—through fiscal imbalances, inflationary pressures or exchange-rate instability—could further weaken domestic demand and reduce private investment.
To address these challenges, the Ministry of Finance advocates a more selective public investment strategy focused on productivity, prioritising critical economic infrastructure and projects with high multiplier impact. The aim is to stimulate youth employment, promote self-employment and strengthen domestic production.
The document also stresses the importance of strengthening support instruments for the private sector, particularly micro, small and medium-sized enterprises (MSMEs), which are seen as essential for revitalising the domestic market and boosting trade, including within the informal sector.
Source: Diário Económico
