Mozambique’s Dollar Shortage: A deepening foreign exchange crisis is taking a devastating toll on Mozambique, threatening everyday essentials like bread and fuel. According to Bloomberg, Mozambique’s dollar shortage is crippling bread and fuel supply chains, and the consequences are beginning to hit the population hard.
With access to U.S. dollars severely limited, local businesses are struggling to import basic necessities such as wheat and petroleum. The result? Shortages, rising prices, and growing unrest in one of Africa’s resource-rich yet economically fragile nations.
One of the most immediate impacts of the crisis is a looming bread shortage. The Mozambique Bakers Association has warned that without access to wheat flour—entirely imported—bread production will soon grind to a halt.
“We don’t have wheat flour and we can’t make bread without it,” said Victor Miguel, head of the association. “What’s going to happen is we are going to not have bread available. This is really serious.”
The statement underscores how Mozambique’s dollar shortage is crippling bread and fuel supply chains, with food insecurity now a very real possibility.
Mozambique’s Dollar Shortage Is Crippling Bread and Fuel Supply Chains – Bloomberg Highlights Fuel Breakdown
Fuel availability has also been severely affected. State media, including Noticias, reported that some fuel pumps in the central and northern regions have already run dry.
The Minister of Mineral Resources and Energy, Estevão Pale, admitted that the government is scrambling to work with the central bank and lenders to resolve issues with issuing guarantees for fuel imports. Despite these efforts, the reality on the ground suggests delays and shortages are already underway.
João Macandja, head of the national fuel import agency Imopetro, declined to comment—only adding to public anxiety.
Bloomberg Reports Airline Suspensions
The aviation sector is also feeling the crunch. Several international airlines have suspended flights to Mozambique, citing difficulties in repatriating ticket revenue due to the dollar shortage.
The Confederation of Economic Associations (CTA), the country’s top business lobby, confirmed the growing challenge in a public statement, linking it directly to the worsening currency crisis. As Mozambique’s dollar shortage is crippling bread and fuel supply chains, the country’s connectivity with the outside world is being compromised too.
Local Industries Stifled by Dollar Shortfall
A recent CTA survey found that by February, businesses across multiple sectors were grappling with at least $373 million in unmet foreign exchange demands. This includes importers of food, fuel, and pharmaceuticals.
Eduardo Sengo, CTA’s executive director, believes a quick fix could be found by raising the export revenue repatriation threshold from 30% to 50%. He estimates this could generate an additional $750 million in foreign currency—although he did not provide a timeline.
Currency Overvaluation
Compounding the problem is the metical’s overvaluation. According to S&P Global Ratings, the real effective exchange rate in Mozambique was overvalued by up to 40% as of November—the highest since 2015.
Though the country follows a “de facto stabilized arrangement” for its currency, analysts say this has masked deeper structural issues. A strong metical has discouraged exporters and reduced dollar inflows—another reason Mozambique’s dollar shortage is crippling bread and fuel supply chains, as highlighted by Bloomberg.
Central Bank Under Fire Amid Growing Pressure
Despite mounting complaints from the business community, the Banco de Moçambique has attempted to downplay the crisis. Governor Rogerio Zandamela recently stated that the central bank had already cut mandatory reserves for commercial banks to boost liquidity.
Zandamela defended the institution’s policy, saying it must build FX reserves to protect national stability. Mozambique’s foreign reserves stood at $3.47 billion by December—up from $3.33 billion the previous year.
But critics argue that those reserves are not accessible to the companies that need them the most—hence why Mozambique’s dollar shortage is crippling bread and fuel supply chains, despite strong reserves on paper.
Post-Election Instability Fuels Crisis
This economic turmoil comes on top of political unrest. Following disputed elections in October, at least 361 people have died in post-election violence, according to the Decide Platform, a local watchdog.
The deepening shortages, rising inflation, and faltering public services could further inflame tensions. As Mozambique’s dollar shortage is crippling bread and fuel supply chains, trust in state institutions appears to be eroding.
Long-Term Solutions Needed for FX Recovery
Eduardo Sengo also proposed a structural fix: requiring major exporters to repatriate more of their foreign earnings. Many currently enjoy special arrangements with the government, allowing them to hold dollars offshore.
Unless such policies are revised, Mozambique’s dollar shortage is crippling bread and fuel supply chains in a way that may persist well beyond 2025.
