Water supply and sanitation in Mozambique is characterised by low levels of access to an improved water source (estimated to be 51% in 2011), low levels of access to adequate sanitation (estimated to be 25% in 2011) and mostly poor service quality. In 2007 the government has defined a strategy for water supply and sanitation in rural areas, where 62% of the population lives. In urban areas, water is supplied by informal small-scale providers and by formal providers.
Beginning in 1998, Mozambique has reformed the formal part of the urban water supply sector through the creation of an independent regulatory agency called CRA, an asset-holding company called FIPAG and a Public-private partnership (PPP) with a company called Aguas de Moçambique. The PPP covered those areas of the capital and of four other cities that had access to formal water supply systems. However, the PPP ended when the management contracts for four cities expired in 2008 and when the foreign partner of the company that serves the capital under a lease contract withdrew in 2010, claiming heavy losses.
While urban water supply has received considerable policy attention, the government has no strategy for urban sanitation yet. External donors finance about 87.4% of all public investments in the sector. The main donors in the water sector are the World Bank, the African Development Bank, Canada, the Netherlands, Sweden, Switzerland and the United States.