The collapse of the Portuguese colonial regime in 1974 triggered rapid social and economic change in Mozambique. Supporters of the victorious revolutionary movement, Frelimo, held boisterous rallies welcoming the new freedoms that would come with independence. Meetings inside factories condemned capitalist exploiters and colonial collaborators. Gatherings in the countryside criticized the forced labor of yesterday and anticipated the cooperative projects of tomorrow. As might be imagined, the change of regime and the fears and expectations that accompanied it unsettled all normal economic activities, from the simplest financial transaction to the most complicated manufacturing tasks. Production in fields and factories slowed; orders went unfilled; and positions went vacant as business interests assessed their prospects of survival under a revolutionary regime and workers took to the streets to express their support for Frelimo. Not long thereafter, the new government began to intervene in the economy, first in the banking sector, and then in industry and agriculture. It nationalized rented property and proclaimed state ownership of all the land. It extended state intervention to health care, education, the practice of law, and the performance of funerals. By the early 1980s, state enterprises dominated almost every sector of the Mozambique economy.

Reflecting on the period just after independence, official sources often portrayed state intervention as an improvised response to economic breakdown, necessary to staunch sabotage and desertion by company owners and managers. I argue that more complex calculations explain both the structure, timing, and creation of the state sector.