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Located in Southern Africa, Mozambique borders six countries and has a 2,700 km-long coastline on the Indian Ocean, facing Madagascar, which strategically positions it to serve landlocked neighbors. It is endowed with vast natural assets, including offshore gas reserves, mineral deposits, arable land, hydropower potential, and rich biodiversity. Yet, despite these advantages, many of its 33 million people, two thirds of whom live in rural areas, lack access to basic services and meaningful economic opportunities.

Growth remains constrained by a mix of immediate economic pressures and longstanding structural challenges. These include mounting macro-fiscal imbalances such as liquidity shortages and foreign exchange deficiencies, weak governance, inadequate infrastructure, low levels of human capital and skills, a constrained business environment, vulnerability to external shocks, persistent conflict—particularly in Cabo Delgado—and pronounced spatial disparities.

With a new government in place following the contested October 2024 elections, President Daniel Chapo has prioritized transparency, institutional efficiency, economic reform, and inclusive development. The country’s ambition to establish its economic independence, as it celebrates fifty years of political sovereignty, offers a window of opportunity to overcome longstanding structural constraints and chart a new development trajectory.

ECONOMY
Real GDP contracted by 2.4% year-on-year in the first half of 2025, mainly due to declines in industry and services. The economy remains fragile, impacted by post-election unrest, fiscal pressures, foreign exchange shortages, and low investor confidence. The Coral South gas project, having reached full capacity in 2024, now contributes minimally to growth.

Inflation fell to 4% in the first seven months of 2025, aided by improved cross-border trade with South Africa that lowered food prices. In response, the central bank eased monetary policy, cutting the reference rate to 10.25% and reducing the reserve requirement on local currency deposits from 39% to 29%. However, private sector credit growth remains weak at 4% year-on-year.

GDP growth is projected at 1.8% in 2025, gradually increasing to 3.5% by 2027, driven by recovery in agriculture and services. The fiscal deficit is expected to widen to 6.2% of GDP in 2025 due to lower revenues, rising wage costs, and domestic debt service. Medium-term fiscal consolidation hinges on containing the wage bill.

Risks to the outlook include climate shocks, LNG project delays, security issues in the North, and mounting fiscal and foreign exchange pressures.

The national poverty rate surged from 48.4% to 62.9% between 2014/15 and 2022, with 7 million more Mozambicans falling into poverty, totaling 20.4 million. This rise is attributed to the hidden debt crisis, COVID-19, and natural disasters. Poverty is concentrated in Nampula and Zambezia, home to 46% of the poor. Persistently low productivity in the agricultural sector, which sustains most poor households, continues to hinder poverty reduction.

Last Updated: Oct 13, 2025

Since 2015, Mozambique has faced persistent shocks: the hidden debt crisis, cyclones, COVID-19, an insurgency in the North, and recent post-electoral unrest. Growth remains fragile and dependent on extractives. Real GNI per capita fell by 0.1% between 2016 and 2024.

Agriculture employs over 70% of the population but suffers from low productivity, climate vulnerability, and weak investment. Rural poverty is entrenched, and informality dominates, accounting for over 80% of employment.

Weak infrastructure, low human capital, and business constraints limit productivity and structural change. Fiscal pressures have increased the risk of debt distress. In 2024, the wage bill and interest absorbed 91% of tax revenue, leaving little space for essential investments in education, health, and infrastructure. High underemployment and inequality constrain inclusion, while most workers lack social protection.

A human capital index of 0.36 limits rapid and inclusive growth. Skills shortages, weak accessibility of the labor market, and disempowerment of women—through high fertility, adolescent pregnancy, maternal and child mortality, gender-based violence, low skills, and low productivity—further constrain growth. Basic education and health services are unevenly delivered, deepening spatial inequalities. Safety nets remain limited, driving fragility and instability.

Building a more resilient and inclusive economic model is essential to create jobs, cut poverty, and manage shocks. Key priorities include containing the wage bill, improving spending efficiency, and strengthening debt management to preserve fiscal space and social stability. Without consolidation, LNG revenues risk funding inefficient spending rather than development.

Effective, inclusive LNG revenue management, improved access to finance, investment in education, infrastructure upgrades, reduced regional disparities, and regulatory reforms are critical for job creation, structural transformation, and resilience.

Last Updated: Oct 13, 2025

ľ��ӰԺ Group's engagement in the country is currently defined under the Mozambique Country Partnership Framework (CPF) FY23-27, endorsed by the World Bank Group’s Board of Directors in February 2023. The overarching goal of the CPF is to support Mozambique’s progress toward greener, more resilient, and inclusive development. This will be achieved by setting the foundations for a transition to (i) an economic growth model that generates more and better jobs, with attention to women’s participation; (ii) more equitable institutions and a society that is more resilient to multidimensional shocks; (iii) a future development path that is consistent with global climate goals. WBG support will help address the underlying causes of fragility, conflict, and violence. The CPF program emphasizes the importance of scaling up for impact, leading to fewer, larger transformational investments and paying greater attention to implementation.

ľ��ӰԺ is currently developing a new Country Partnership Framework in consultation with the Government of Mozambique, development partners, and broader stakeholder groups.

As of September 2025, the World Bank portfolio for Mozambique consisted of 33 national projects ($5.034 billion) and 8 regional projects ($1.1 billion), including credits and grants.

Last Updated: Oct 13, 2025

World Bank-supported projects in Mozambique have significantly impacted sectors like education, energy, health, social protection, infrastructure, agriculture, and governance. Despite ongoing challenges, key results include:

Jobs
The  project supports youth empowerment, education, and employment. Its EMPREGA Program has delivered employment services to over 20,000 youth. Over 500 youth-led SMEs and 3,000+ microentrepreneurs received funding to launch or grow their businesses. The initiative has created around 6,000 jobs and internships, with a focus on vulnerable youth.

Energy
The , along with the ongoing , helped connect 4M people to electricity. The project will help to connect 1M more and 68 public facilities, both on and off-grid.

Education and Skills
The project enhanced education for 3.8M students, while helped expand higher education enrollment to 54,600, develop 80+ TVET qualifications, certify 3,136 trainers, and improve digital access for 180,000 users. will help deliver integrated services in vulnerable districts.

Water/WASH
The helped provide clean water to 120,000 people; the  improved sanitation access for 103,000 people and 145,000 students, while Águas Seguras helped provide water and sanitation services to 200,000 people in Nampula/Zambezia. Sanitation tariffs raised $5.3M for municipal services.

Health
The health portfolio helped expand access for 1.2M in the via 80+ facilities and 1,000 workers. The helped the community health workforce grow by 13%, reaching 2.5M households. will boost emergency preparedness through surveillance, labs, and digital systems.

Last Updated: Oct 13, 2025