As Mozambique moves through the first quarter of the year amid mixed economic signals, business confidence remains one of the most sensitive issues in the debate over the country’s 2026 outlook. Growth forecasts remain dispersed and influenced by factors such as the cost of credit, exchange rate dynamics and domestic demand.
Economists interviewed by Diário Económico broadly agree that the resumption of the Mozambique LNG project, led by TotalEnergies and valued at around $20 billion, could improve sentiment and perceptions of country risk. However, its effects on the real economy in 2026 are expected to be gradual.
Economist Constantino Marrengula argues that the current wave of optimism is often more political than grounded in economic fundamentals. According to him, there is a tendency to communicate that the situation is under control even when economic indicators do not fully support that narrative.
Moisés Nhanombe, economist and former researcher at the Catholic University of Mozambique, notes that business confidence directly influences investment, hiring and expansion decisions. If confidence remains fragile, more optimistic growth scenarios may fail to materialise.
Both economists highlight that uncertainty quickly transmits to the real economy. Marrengula explains that when the private sector has negative expectations about the future, investment tends to slow, with consequences for employment and income. Nhanombe adds that high borrowing costs, moderate demand and uncertainty continue to encourage defensive behaviour among firms, particularly outside the extractive sectors.
Fiscal policy also plays a role. Marrengula warns that efforts to consolidate public finances could include tax increases, which would withdraw liquidity from the economy if public spending does not compensate. Since public investment and social spending have strong multiplier effects, tighter spending could weaken domestic economic momentum.
On megaprojects, both economists agree that the short-term effect will be limited. Nhanombe believes the main impact of Mozambique LNG in 2026 will be indirect, improving investor confidence and signalling institutional stability. However, the direct contribution to GDP is expected to be modest because the initial phase is capital-intensive and relies heavily on imports.
He also stresses that the benefits will depend on how much Mozambican companies can integrate into the supply chain. Without stronger local linkages, gains may remain concentrated.
Marrengula similarly doubts that the project alone can offset broader economic constraints, arguing that the inflows associated with TotalEnergies may not be enough to counterbalance weaknesses in other areas of the economy.
Both economists also caution against excessive expectations around the gas sector. According to Nhanombe, gas revenues cannot replace reforms in the business environment, the financial system or workforce skills, nor solve structural problems such as expensive credit, low productivity and limited economic diversification.
External financing is another factor shaping expectations. Marrengula notes that funds promised by the World Bank, reportedly exceeding $10 billion, could ease pressure on the state budget, particularly for public investment. However, he warns that these projects typically move slowly and that tangible effects may only appear toward the end of 2026.
Despite different emphases, both economists conclude that sustainable growth will depend primarily on domestic reforms, stronger private investment and improved conditions for businesses beyond large-scale projects.
Text: Felisberto Ruco
