Mozambique has been removed from the Financial Action Task Force’s grey list and has seen the resumption of TotalEnergies’ multi-billion dollar LNG project in Cabo Delgado province, two developments that together mark a major turning point in the country’s economic trajectory. The IMF has highlighted Mozambique’s improving fundamentals, including low inflation, adequate foreign exchange reserves, and strengthened financial governance as key reasons behind the positive shift. The LNG project, one of the largest energy investments in African history at a total value exceeding $20 billion, had been suspended in April 2021 following a violent insurgent attack on the town of Palma.
Key points
- Mozambique has been officially removed from the FATF grey list, reducing barriers to international investment
- TotalEnergies’ LNG project in Cabo Delgado, valued at over $20 billion, has resumed following improved security
- The IMF cites low inflation, adequate foreign exchange reserves, and fiscal reform as drivers of the improved outlook
- Mozambique holds some of the largest natural gas reserves ever discovered in Africa
- Full development of the LNG project would transform Mozambique into a major global LNG exporter
- AfDB-financed drone technology has been deployed to support flood response in the country
Being on the FATF grey list had made it significantly more expensive and complex for Mozambican banks and businesses to conduct international transactions, deterring foreign investors and raising the cost of capital. Removal from the list opens the door to normalised banking relationships and renewed investor confidence. Combined with the LNG project restart, which brings billions in revenue and thousands of jobs to one of Africa’s most underdeveloped regions, the two developments provide a credible foundation for sustained recovery.
Why it matters: Mozambique’s natural gas potential has long been understood, but political risk and financial governance concerns kept investors cautious. Both of those barriers are now materially reduced, making Mozambique one of the more compelling emerging market stories on the continent in 2026.
Source: AllAfrica | African Development Bank
