In the run up to the Carnation Revolution, the state of Portugal's colonial empire was one of the dominant themes of Portuguese politics. In 1974 wars being fought to maintain Portuguese dominance in Guinea, Angola and Mozambique were costing up to 50% of Portugal's annual budget. Such high military spending obviously left little room for other domestic or social concerns. Consequently, education and welfare spending was cut or stalled in favor of military needs. What's more, even with so much investment, the military wasn't even necessarily winning. Large areas of Portugal's colonial empire were already de-facto independent. For example, the PAIGC of Guinea-Bissau had previously declared independence and been recognized by the UN General Assembly as rightful defenders against Portuguese aggression.
In addition to the military difficulties Portugal was facing, it was also necessary for them to confront the economic and political realities of maintaining a colonial empire in 1974. While open political activity had been dangerous under fascist government, the coup was made up of many young officers who were practically and ideologically opposed to the maintenance of the colonial empire. On the practical side were men like Antonio Spinola who had previously declared the wars of independence unwinnable, and on the ideological side were those who felt it was important to reach out to marxist and socialists in order to create national unity. Withdrawing from overseas was a sure way to do this.
Ultimately, the major points of domestic contention were the particular dynamics of withdrawal. Some favored a speedier retreat while others hoped for a slower draw down. However the consensus was that Portugal was in no position to maintain its colonial position. Between the native independence movements Portugal was facing and the pressure generated by both the Soviet Union's and the U.S.A.'s efforts to gain footholds in strategic portions of Potrugal's holding any hope of maintaining power was slim. In all, it made very little sense for Portugal to try to hold onto something which was already clearly lost.
The Politics of Decolonization in Portuguese Africa
Jospeh C. Miller