Mozambique’s decision to resume construction of the Mozambique LNG project in Cabo Delgado signals renewed ambition after one of the most serious security crises in the country’s post civil war history. Nearly five years after insurgents attacked the town of Palma in March 2021, forcing TotalEnergies to suspend operations and evacuate staff, work at the Afungi site is gradually restarting under reinforced military protection.
The project, valued at about 20 billion dollars at the time of its final investment decision, is one of the largest private investments in Africa. It is designed to monetise vast offshore gas discoveries in the Rovuma Basin, discovered in the early 2010s, which transformed expectations of Mozambique’s economic future. At full capacity, officials have projected that gas developments in the basin could generate tens of billions of dollars in state revenue over three decades, potentially reshaping public finances in one of the world’s poorest countries.
Yet the promise of gas wealth has always been intertwined with risk.
The insurgency in Cabo Delgado began in 2017, rooted in a complex mix of local grievances, marginalisation, religious radicalisation and illicit economic networks. By 2020 and early 2021, attacks had intensified, culminating in the assault on Palma, located close to the LNG construction site. The violence led TotalEnergies to declare force majeure and suspend the project, delaying anticipated export revenues and adding to investor uncertainty.
In response, the Mozambican government sought regional and bilateral military support. Rwanda deployed several thousand troops in mid 2021 under a bilateral agreement, while the Southern African Development Community also sent forces under a regional mission. According to reporting by the United Nations and assessments by organisations such as the International Crisis Group, these interventions helped retake key towns including Palma and Mocímboa da Praia, though insurgent attacks have persisted in parts of the province.
The project’s restart reflects improved control around the Afungi peninsula, but the security model remains highly concentrated. The concession area operates as a tightly controlled enclave with layered protection provided by Rwandan forces, Mozambican troops and private security contractors. This has reduced the immediate risk to infrastructure, yet it also embeds substantial security costs into the project’s operational structure.
Under Mozambique’s petroleum legislation and production sharing arrangements, certain capital and operational expenditures are recoverable before profits are taxed. TotalEnergies has publicly indicated that it incurred significant costs during the suspension period and intends to recover eligible expenses in line with contractual terms. The precise fiscal impact on future state revenues remains subject to confidential agreements between the company and the government.
The broader economic context is delicate. According to the International Monetary Fund’s most recent Article IV consultation, Mozambique’s public debt remains high relative to gross domestic product, and fiscal space is constrained. Growth slowed in the wake of conflict disruptions and climate shocks, even as expectations of future LNG exports support medium term projections. The timing of revenue flows is therefore politically and economically sensitive.
There is also a social dimension that extends beyond balance sheets. Cabo Delgado has long recorded some of the country’s highest poverty indicators despite its resource endowment. Past extractive projects in Mozambique have faced criticism for limited local linkages and uneven distribution of benefits. The Afungi concession, which will house thousands of workers during peak construction, has limited direct interaction with surrounding communities because of security restrictions. While understandable in the present context, this model risks reinforcing perceptions of exclusion if not accompanied by broader investment in public services, infrastructure and employment in the province.
Mozambique’s leaders have repeatedly framed LNG as a national development catalyst. The challenge lies in translating future export earnings into tangible improvements in health care, education, energy access and regional connectivity. International experience with resource rich states shows that governance, transparency and fiscal discipline are decisive in determining whether natural wealth becomes a foundation for inclusive growth or a source of distortion.
For southern Africa, the project carries regional implications. It could strengthen energy trade, deepen investment flows and alter the geopolitical profile of the Indian Ocean coastline. At the same time, it underscores the interconnected nature of security, economic management and social cohesion.
The resumption of Mozambique LNG is therefore neither a simple return to business nor a guaranteed economic breakthrough. It is a test of whether security stabilisation can be sustained, whether contractual arrangements are managed in the public interest, and whether communities in Cabo Delgado see meaningful dividends from resources extracted from their shores.
The stakes are high. The geology of the Rovuma Basin is no longer in doubt. The question that remains is whether governance and stability can match the scale of the opportunity.
