In order to grasp the causes of African underdevelopment, one should examine colonial rule in the wider context of European economic power over Africa. In the eighteenth century, the relationships between Europeans and Africans beginning with the Trans-Atlantic Slave Trade led to the continent’s underdevelopment. Africans were free people until the advent of slavery when they became Africa’s main export. Slave trade refers to the captive and shipment of Africans against their will to numerous parts of the world. They lived and worked as property of the European colonists. In the ninetieth century, the structure and development of the world capitalist system consolidated the underdeveloped structures of Mozambique. The status of Europe and its penetration changed from a source of demand for manpower, particularly slaves, to a source of supply of raw material. Although the colonial rule that began in the early nineteenth century has disappeared since 1975, its impact or outcome has been increasing steadily in Mozambique. In this paper, I will analyze the underdevelopment of Mozambique as a result of colonial rule during the imposition of Cotton Regime (1938-1961). More specifically, what has been the impact of colonialism on the political economy of Mozambique?