‘Food, jobs, hope’: Mozambique seeks investment route to economic recovery | Business and Economy News

Maputo, Mozambique – Down the main aisle of a bustling conference pavilion in Mozambique’s capital, Maputo, Lucia Matimele stands surrounded by lush green leaves, peppers on the stalk, and bunches of ripe bananas.

“We have land, we have water, we have farmers!” she enthuses. “What we need is investment.”

Matimele is the director of industry and commerce for Gaza province, a region about 200km (125 miles) away that is one of the country’s main breadbaskets. She and her team packed up some of their most promising crops and joined thousands of others – from within and outside Mozambique – to exhibit their wares and make industry connections as the government works to promote economic growth and development in what has been a politically challenging year.

More than 3,000 exhibitors from nearly 30 countries are in Mozambique this week for the 60th annual Maputo International Trade Fair (FACIM) – the largest of its kind in the country. Tens of thousands are expected to attend the seven-day event, the government said.

Crowds of exhibitors and eager attendees gathered at the sprawling conference site on the outskirts of Maputo for day one of the event on Monday. A dozen pavilions are hosting local businesses, provincial industry leaders, such as Matimele, and regional and international companies looking to trade in or with Mozambique.

Standing before delegates and businesspeople at the opening ceremony, Mozambican President Daniel Chapo focused on the need to ensure a good environment for foreign investors, while also building an inclusive and sustainable local economy.

President Daniel Chapo at the opening of FACIM 2025 [Courtesy of Mozambican Ministry of Economy]

“Mozambique has a geostrategic location, with ports, development corridors and various other potentialities; vast resources, mineral, natural, agricultural, tourist, and above all a humble, hard-working, friendly and welcoming people,” Chapo said in Portuguese, highlighting the country’s “unique opportunities” for international partners.

But at home, he affirmed, “economic independence starts with agriculture workers, farmers, the youth, women – all of us together”.

With that in mind, the government, with financing from the World Bank, has instituted a new $40m Mutual Guarantee Fund to help finance small and medium enterprises in the country. It will provide credit guarantees to at least 15,000 businesses and aims to assist mainly women and young people, the president said.

“One of the concerns we hear repeatedly at all the annual private sector conferences is the difficulty in accessing financing,” Chapo said while launching the fund at FACIM on Monday.

“We know that high interest rates have been almost insurmountable barriers for small- and medium-sized businesses, which represent the heart of the national business fabric, hence the creation of this fund, specifically dedicated to this group of companies, because they are responsible for 90 percent of the dynamism of our economy, generating income mainly for young people.”

He added: “This instrument is not just a financial mechanism, it is a bridge to the recovery of the Mozambican economy.”

‘We can feed our people best’

Mozambique has “ample resources”, the World Bank says, including arable land, abundant water sources, energy, mineral resources and natural gas deposits.

However, its gross domestic product (GDP) growth for 2025 is projected to be just 3 percent (it was 1.8 percent in 2024 and 5.4 percent in 2023).

Experts point to a raft of challenges facing the Southern African nation: for years it was besieged by a $2bn “hidden debt” corruption scandal that implicated senior government officials; it is still recovering from post-2024 election protests that affected tourism; and it faces an ongoing rebellion by armed fighters in the northern Cabo Delgado province, home to offshore liquefied natural gas (LNG) reserves.

FACIM 2025 in Maputo, Mozambique [Sumayya Ismail/Al Jazeera]

The armed rebellion has halted TotalEnergies’ $20bn LNG project, and, with it, put added strain on the region’s finances and near-future economic prospects, noted Borges Nhamirre, a Mozambican researcher on security and governance with the Institute for Security Studies.

“The economy of Mozambique was prepared for the next 20, 30 years to rely on natural resources … But now the most recent problem is the insurgency in the northern part of the country. So that affects the economy of Mozambique deeply,” Nhamirre said.

“And unfortunately, Mozambique did not diversify the source of revenues, did not invest in other sectors like agriculture, industry, manufacturing – relying mostly on natural gas,” he added.

“Mozambique needs to bet on producing its own food,” the researcher said, noting that it is not affordable to keep importing when the country has the potential to feed itself. “The land for agriculture is there, water is there. So, the problem is just mentality and a bit of capital.”

At her booth in one of the pavilions at FACIM, Matimele has similar thoughts. “We can feed our people best,” she said, surrounded by fresh produce from small farms in Gaza province. Across the aisle from her, another booth boasts supplies from the province of Tete: grains, seafood, vegetables, livestock; while throughout FACIM, businesses are selling locally sourced items, including coffee and honey.

In Gaza, Matimele says, people farm rice, bananas, cashews and macadamias, much of which they send abroad to countries such as South Africa and Vietnam – and she would like to increase exports and reach new places.

The challenge for them is not production, but processing and distribution, she says.

“We need big industry getting into this business,” Matimele said, adding that small farmers need guarantees that what they produce will be sold and not go to waste.

“FACIM helps us by giving us a secure market,” she explained.

The Mozambican province of Tete displays produce and wares at its FACIM pavilion [Sumayya Ismail/Al Jazeera]

Without funding, ‘you will get stuck’

For other observers, FACIM’s focus this year on investment and the Mutual Guarantee Fund are a step in the right direction, especially for small business owners in the agricultural sector.

“Agriculture is our main resource. It employs millions of people and feeds millions more,” said Rafael Shikhani, a Mozambican historian and researcher. Yet, there remains a longstanding “problem” with the sector, he noted from Maputo.

“[Historically], we have had so many breakups in that [agriculture] cycle,” he said, highlighting the 1977-92 civil war, and in the midst of that, a severe drought that hit the country from 1982 to 1984. “It was a sort of disruption to production,” he said, one that has had ripple effects.

Current challenges facing Mozambican agriculture, the researcher said, include a lack of capital for farming, as well as some people preferring to take an easier route by importing food from neighbouring South Africa to sell locally instead of growing it from scratch.

“In many areas, the funding is a key motivation,” Shikhani said. “If you don’t have funds, you can [still] start a very nice business, but there will be a certain way you will get stuck – you’ll need equipment, you’ll need to pay people, you’ll need a truck, you’ll need to put up a fence; for whatever, you will need money.”

That is where the Mutual Guarantee Fund could come in handy.

“More investment in agriculture is good,” Shikhani said. It will also help the sector evolve from individuals farming small plots of land to small and medium-sized farming businesses that make more informed choices about “the type of land, where you farm, and how you exploit your land”.

President Daniel Chapo and delegates at FACIM 2025 [Courtesy of Ministry of Economy]

For analyst Nhamirre, the way the Chapo government goes about tackling the country’s most pressing economic issues will go a long way in determining the outcome.

But he remarks that external factors, such as the armed rebellion in the north and internal governance issues, will also play a part.

“There are internal things that the government needs to do well … The people are still very frustrated,” he said, pointing to the past year’s post-election violence, saying there is a chance protests may flare up again.

Meanwhile, Shikhani looks at the issue through a historian’s lens. “There is a cycle of crisis: if there is an economic crisis, it leads to a political crisis, and it leads to social unrest. If you deal with economics and you feed people, there will be no more social unrest, and there will be no political crisis. So, you start with economics,” he said.

“Give people food, give people jobs, give people hope – they will work and make money.”

At her booth in FACIM, Matimele and her team stand ready in matching red shirts emblazoned with the words: “Gaza, the route of progress” in Portuguese. Ahead of them is a week of networking that they hope will lead to more – more food, more jobs, more hope.

“Investment is the right way to follow,” said the provincial industry chief. “If we have investment, we can solve all the issues.”

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