Maputo, Oct. 7, 2026 (Lusa) - The Bank of Mozambique believes Mozal, the country's largest manufacturer, which has been shut down since March, continues to influence manufacturing activity, while also identifying other internal and external risks that may affect the economy's performance.
«The short-term outlook points to a moderate recovery in economic activity (...). Meanwhile, the secondary sector continues to face challenges following the suspension of Mozal's operations», according to the latest Economic Outlook and Inflation Forecast Report, published in September, to which Lusa gained access today.
In the document, the central bank noted that the economic recovery is continuing, but emphasised that the industrial sector still faced challenges due to the shutdown of Mozal, considered one of the largest aluminium smelters in Africa.
Mozal, located on the outskirts of Maputo, suspended operations in March this year after several months of negotiations failed to reach an agreement on the cost of supplying the electricity needed to maintain production. The smelter then switched to a conservation and maintenance regime.
Controlled by the Australian company South32, the firm had deemed the proposed electricity tariff «completely unsustainable», arguing for a maximum price of around $51 per megawatt-hour, compared with a proposal of around $100.
The industrial plant, one of Mozambique's leading exporters, produced 248,000 tonnes of aluminium in the financial year ending in June, down 30% from the previous period, while sales fell by 22% to 275,000 tonnes.
Between April and June, the first full quarter following the suspension of operations, Mozal recorded no production, limiting itself to selling aluminium from existing stock, according to information provided by the company to Lusa.
South32 has meanwhile estimated extraordinary costs of around €104 million associated with the smelter's shutdown, including compensation for workers and accounting losses related to raw materials and stock. The company has previously acknowledged the possibility of resuming production should energy and economic conditions deemed viable arise.
Meanwhile, the South African Industrial Development Corporation (IDC), which holds a 32.48% stake in Mozal, launched a tender in June to engage independent consultants to assess a potential acquisition of South32's majority stake and analyse the feasibility of resuming operations.
In the report published in September, the Bank of Mozambique emphasised that, excluding the contribution from natural gas megaprojects, economic activity continues to depend primarily on the primary and tertiary sectors, which have underpinned the recovery observed throughout this year.
The central bank highlights several risk factors that could challenge the economic outlook for 2026 and 2027, such as rising imported inflation amid volatility in international markets and rising prices for essential goods.
The report also highlights international geopolitical tensions, which could affect supply chains, transport costs and raw material prices.
Another area of focus is extreme weather events, including phenomena associated with El Niño, which could affect agricultural production, food prices and economic activity in general.
The Bank of Mozambique also noted that managing public finances, notably the government's financing needs and the accumulation of payment arrears, presents opportunities to strengthen the economy.
According to the institution, these factors could influence the liquidity of the financial system, credit conditions, and the confidence of economic agents.
PVJ/ADB // ADB.
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