Local firms play a decisive role in the process of structural transformation in Sub-Saharan Africa, if they succeed in acquiring the technological capabilities that are pivotal to economic upgrading. Although Mozambique has witnessed an influx in foreign direct investments (FDI) in the past decade, the size and level of technological capabilities of domestic entrepreneurs remain low, making it hard for Mozambican firms to access (global) value chains. Despite an unfavourable business environment, some successful industries in the agro-processing sector have emerged, partly backed by selective industrial policies and ‘pockets of efficiency’ within the state bureaucracy. Looking at the cashew and the soy sub-sectors, this paper asks the question: How did politics affect the evolution of the two sub-sectors as well as processes of economic upgrading? Drawing on political settlements theory and the literature on (global) value chains, I seek to explain how sector-specific political settlements facilitated or hindered the acquisition of technological capabilities by local firms that are needed to upgrade agricultural processes and add value. Based on extensive field research conducted in Mozambique between February and April 2018, this paper particularly focuses on teasing out the relations between political elites and economic actors as well as their motives and interests. The findings of this paper will provide insights into the political preconditions for technology acquisition in Mozambique’s agro-processing sector and will add to the broader debate on industrial policies in Sub-Saharan Africa.