Peter Bofin on threats to Mozambique’s fragile LNG investments

Peter Bofin, Southeast Africa Senior Analyst at ACLED, said: 

“Mounting global pressures stemming from the Iran conflict could place significant additional strain on Mozambique’s already fragile economy, raising concerns about the country’s ability to safeguard critical energy investments. A recent World Bank assessment underscores the severity of current economic pressures, warning that limited fiscal space and weak growth leave Mozambique poorly positioned to absorb further external shocks.

“These vulnerabilities carry direct implications for the security of LNG projects. In northern Mozambique, violence by Islamic State Mozambique has been steadily rising since late 2023 —the group had previously prompted the shuttering of the project for four and a half years in 2021. Rwandan military support allowed force majeure to be lifted last year, but primary responsibility for security remains with Mozambique. With economic growth close to zero last year, and the added pressure of rising import costs due to the Iran war, Mozambique may not be in a position to fulfil that role.

“Beyond the insurgency, broader economic pressures risk fueling renewed civil unrest. The 2024 elections triggered more than six months of nationwide protests, and rising living costs alongside declining social services could drive further instability, adding another layer of risk to major energy investments such as Mozambique LNG.”