Foreign investment in Mozambique grows 44.7% in nine months to €2,655 million

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Foreign investment in Mozambique grows 44.7% in nine months to €2,655 million

11:19 CAT | 26 Feb 2025

FILE - For illustration purposes only. [File photo: Business News]

Foreign direct investment (FDI) in Mozambique grew 44.7% in the first nine months of 2024, compared to the same period of the previous year, reaching US$2,789.3 million (€2,655 million), according to data from the central bank.

According to data from the balance of payments report from the Bank of Mozambique, this growth, in relation to the US$1,927.5 million (€1,835 million) from January to September 2023, is explained “by the 40.9% increase in FDI from Large Projects”.

In this sector, “the increase of 39.5% in the inflow of capital from the extractive industry stands out, with a weight of 69.6% of the total FDI carried out in the period under analysis”, the document notes.

Almost 28% of FDI applied in Mozambique from January to September last year came from South Africa, equivalent to US$778 million (€740.5 million), followed by Mauritius, with 26.4% and US$735.5 million (€700 million), and the Netherlands, with 26% and US$725 million (€690 million). The extractive industry maintained its “position as the largest recipient of investment flows”, with a total of US$2,449.7 million (€2,331 million) in the first nine months of the year, with 75.4% of this total FDI absorbed by the oil and gas sector, which, in annual terms, grew by 58.6%, to US$1,706.1 million (€1,623.5 million).

The coal mining subsector registered an annual increase of 11.2%, totalling US$545.3 million (€519 million) in FDI up to last September.

FDI in Mozambique had already grown by 2% in 2023, compared to the previous year, to just over US$2,509 million (€2,387 million), according to data from the central bank previously reported by Lusa.

This performance compares with the US$2,458 million (€2,339 million) in 2022, but is still far from the peak recorded in 2021, with investments in the area of natural gas production, which caused FDI in Mozambique to soar that year to almost US$5,102 million (€4,855 million).

In 2023, the Large Projects category – essentially natural gas miners – secured US$2,087 million (€1,986 million) in FDI in the form of equity. Even so, FDI performance in 2023 was above the government’s projection, which was US$1,425 million (€1,356 million).

The Mozambican government estimates that FDI in the country should double in 2024, driven by natural gas exploration businesses.

In the supporting documents for the State Budget Economic and Social Plan (PESOE) for 2024, the government signals an increase in FDI to US$4,778 million (€4,546 million).

Source: Lusa