Bantu speakers migrated to Mozambique in the first millennium, and Arab and Swahili traders settled the region thereafter. It was explored by Vasco da Gama in 1498 and first colonized by Portugal in 1505. By 1510, the Portuguese had control of all of the former Arab sultanates on the east African coast. Portuguese colonial rule was repressive.

Guerrilla activity began in 1963 and became so effective by 1973 that Portugal was forced to dispatch 40,000 troops to fight the rebels. A cease-fire was signed in Sept. 1974, and after having been under Portuguese colonial rule for 470 years, Mozambique became independent on June 25, 1975. The first president, Samora Moises Machel, had been the head of the National Front for the Liberation of Mozambique (FRELIMO) in its ten-year guerrilla war for independence. He died in a plane crash in 1986 and was succeeded by his foreign minister, Joaquim Chissanó.

On Jan. 25, 1985, after a decade of independence, the government was locked in a paralyzing war with antigovernment guerrillas, the Mozambique National Resistance (MNR, or Renamo), who were backed by the white minority government in South Africa. The guerrilla movement weakened President Chissanó's attempts to institute socialism, which he then decided to abandon in 1989. A new constitution was drafted calling for three branches of government and granting civil liberties. A cease-fire agreement signed in Oct. 1992 between the government and the MNR ended 16 years of civil war.

In multiparty elections in 1994, President Chissanó won. In Nov. 1995 the country was the first nonformer British colony to become a member of the British Commonwealth. The president's disciplined economic plan was highly successful, winning the country foreign confidence and aid. While Mozambique posted some of the world's largest economic growth rates in the late 1990s, it has suffered enormous setbacks because of natural disaster, such as the enormous damage caused by severe flooding in the winters of 2000 and 2001. Hundreds died and thousands were displaced.

In 2002 Chissanó announced he would not seek a third term. FRELIMO's candidate, independence hero Armando Guebuza, was elected president and sworn in on Feb. 2, 2005.

At independence in 1975, Mozambique was one of the world's poorest countries. Socialist mismanagement and a brutal civil war from 1977-92 exacerbated the situation. In 1987, the government embarked on a series of macroeconomic reforms designed to stabilize the economy. These steps, combined with donor assistance and with political stability since the multi-party elections in 1994, have led to dramatic improvements in the country's growth rate. Inflation was reduced to single digits during the late 1990s although it returned to double digits in 2000-03. Fiscal reforms, including the introduction of a value-added tax and reform of the customs service, have improved the government's revenue collection abilities. In spite of these gains, Mozambique remains dependent upon foreign assistance for much of its annual budget, and the majority of the population remains below the poverty line. Subsistence agriculture continues to employ the vast majority of the country's work force. A substantial trade imbalance persists although the opening of the Mozal aluminum smelter, the country's largest foreign investment project to date, has increased export earnings. In late 2005, and after years of negotiations, the government signed an agreement to gain Portugal's majority share of the Cahora Bassa Hydroelectricity (HCB) company, a dam that was not transferred to Mozambique at independence because of the ensuing civil war and unpaid debts. More power is needed for additional investment projects in titanium extraction and processing and garment manufacturing that could further close the import/export gap. Mozambique's once substantial foreign debt has been reduced through forgiveness and rescheduling under the IMF's Heavily Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a manageable level.