The city developed as an agriculture and colonial service centre until the independence of Mozambique from Portugal in 1975.

In addition, the town's economy included forestry-based activities and was surrounded by a pine tree plantation.

The effects of 17 years of civil war (1975-1992) spread famine and disease in Mozambique resulting in many deaths and refugees in the region around Lichinga.

They largely occupy the eastern and northern part of the Niassa province and form about 40% of the population of Lichinga.

A railway branch line from the port of Nacala terminates in this town, it has been renovated and receives services 3 times per week.