The economic week in Mozambique was marked by information of economic interest with a direct impact on improving the business environment. On Tuesday, 16 December, the Mozal aluminium smelter, located in Maputo Province, announced that it will be placed under operational suspension (“care and maintenance”) from March 2026, after the Australian company South32 failed to secure a new electricity supply agreement at competitive prices.
The decision follows prolonged negotiations with the Government, Hidroeléctrica de Cahora Bassa (HCB) and South Africa’s Eskom, which did not result in a viable new power supply contract to ensure the continuity of operations after the current agreement expires in March 2026.
In response, the Confederation of Economic Associations (CTA) argued that the Government must “avoid at all costs” the suspension of the smelter, warning of job losses and the bankruptcy of small businesses. The business community stated that balanced solutions must be identified to safeguard the interests of the Mozambican State and investors, considering Mozal a strategic asset for the country’s economy. In turn, the Executive assured that it is closely monitoring the situation. According to the spokesperson of the Council of Ministers, Inocêncio Impissa, there is a technical team working with the company and the entities involved to avoid negative impacts on workers, suppliers and other stakeholders.
Mozal is one of the country’s main industrial exporters and is majority-owned by South32, with additional shareholdings held by South Africa’s Industrial Development Corporation (32.4%) and the Mozambican State (3.9%).
Solenta Aviation Mozambique Cleared to Begin Domestic Flights
The good news of the week is that Solenta Aviation Mozambique, the private airline that owns Fastjet, received in Maputo the licence authorising the start of domestic air transport operations in the country. This issuance falls under the implementation of the new legal framework approved by the Council of Ministers at its session held this Tuesday (16), according to a press release from the Mozambique Civil Aviation Institute (IACM).
According to the IACM, the approved decree aims to strengthen the opening of the national air market to new airlines, granting the regulator greater powers to supervise the sector and make it more accessible to users.
Among the measures envisaged is the establishment of fare caps to be applied by airlines operating in the domestic market, with the objective of promoting competition, ensuring greater transparency and strengthening passenger protection.
For the private sector, this action represents a structuring step in the liberalisation and modernisation of Mozambique’s civil aviation sector. “The opening of the domestic market creates favourable conditions for increased competition, improved service quality, greater fare predictability and reduced transport costs, with direct impacts on business competitiveness and national economic integration,” the CTA stated in a note.
Last October, the Government had already announced that evaluation work was underway for the certification and licensing of Solenta Aviation Mozambique, with a view to operating domestic flights on several routes across the country.
At the time, the authorities clarified that the administrative, legal and economic analysis of the process had been completed, with only the technical-operational phase remaining, considered decisive for final authorisation of operations.
The licensing of Solenta Aviation Mozambique comes at a time when the Chairman of the IACM assured that airlines operating in the country will reduce airfares next year. According to the official, to make this objective viable, a Master Plan will be presented to the Government detailing all the measures and stages of the process.
State of the Nation Marked by Renewed Confidence, Says President Daniel Chapo
Meanwhile, this week the Head of State presented his first annual report on the general state of the nation. In his address to the Assembly of the Republic, Chapo stated that the country is experiencing a moment of “renewed confidence”, oriented towards sustainable and inclusive development.
Before Members of Parliament, the President stressed that 2026 will be a year of reaffirmation of the Government’s commitments to key sectors, namely agriculture, energy, tourism, education, health, digitalisation and critical infrastructure, considered pillars for improving the quality of life of families.
Daniel Chapo assured that the promises made on the day of his inauguration, on 15 January 2025, will be fulfilled without deviation, reiterating that “the promises were for five years and will be fully honoured”, with a strategic and responsible allocation of public resources.
The President stated that the central objective of the Executive remains firm: to reduce inequalities, decrease poverty, create decent jobs and boost a diversified and sustainable economy, in a context where economic growth projected for 2026 stands at 2.8%.
Macroeconomic projections point to GDP growth of 2.8%, goods exports estimated at more than USD 8.4 billion, average annual inflation of 3.7%, and gross international reserves of over USD 3.2 billion.
However, the President acknowledged challenges such as the effects of post-election tensions since late 2024 and early this year, extreme climate events, terrorism in some districts of Cabo Delgado with spillovers into Niassa and Nampula, and international geopolitical tensions, while nonetheless assuring the continuation of the construction and equipping of hospitals, schools and infrastructure.
Source: Diário Económico
