Is Mozambique the place to invest in property?
The International Monetary Fund projected real GDP growth for Mozambique of 5.5% this year - up from just 2.1% in 2019. The World Bank suggests economic growth will recover towards 4.3% by 2021. So it’s hardly surprising that South African investors are starting to sit up and take notice of this opportunity just across the border.
Amid forecasts that continued easing of interest rates will provide additional economic stimulus, with large-scale investments in gas production likely to add a significant boost, Mozambique is beginning to make much more sense as an investment option as its tropical paradise contemporaries, Mauritius and the Seychelles.
Along with oil and gas, the tourism potential of South Africa’s neighbour goes without saying, but investors are also looking north for possibilities in agribusiness, mining, energy and logistics, and of course the burgeoning property market.
Pre Covid-19. Mozambique has over the years attracted the attention of investor specialists such as Deloitte and PWC. Deloitte’s Investment Opportunities in Mozambique: Tourism Edition, published in 2018, noted that the country offers many opportunities for venture capital investors, with GDP showing high and sustainable growth rates over the past decade. The authors add that this is mainly due to foreign direct investment in megaprojects in sectors such as production, natural resources, and energy. Additionally, Mozambique’s “exceptional” natural and cultural resources are cited as among the most realistic and viable options to diversify the economy going forward.
The PWC, meanwhile, said last year in its publication Doing Business in Africa, that natural gas discoveries, along with the launch of two natural gas projects, had positioned Mozambique as a future development hub. They projected investment spend to 2014 at $55billion.
South African entrepreneur and property developer Ettiene Erasmus, who first invested in the country 28 years ago says that despite doing business across sub-Saharan Africa, “Mozambique is still top of the list for development, and as an investment for business or leisure portfolios”.
“It’s clearly busy positioning itself to become one of Africa’s most sought-after destinations across all sectors, from business and leisure to offshore residential investment. And the world is taking notice,” he adds.
Attracting the attention of big-name property agencies
A number of other big-name property brands are celebrating Mozambique’s potential, among them Pam Golding International, with offices in Maputo, Matola and Pemba. Operating out of its offices in South Africa, RE/MAX also has a substantial presence in Mozambique.
Erasmus himself has made a hefty investment in a residential and tourism development in Mozambique’s Bazaruto Island View Estate. Developed under his Mozprops brand, the 42ha mixed-use estate lies on the coast in Vilankulos and, once completed, will be home to a hotel, a business centre and a residential resort, with private residences, beach lodges, and a marina. It offers a base for potential business operations, a second home, or even a retirement option for South African offshore investors.
Strong promotion of assets
Much is being done to enable Mozambique to realise its full potential, and ensure a business environment conducive to investment from across the globe.
Numerous private operations have also stepped in to promote its assets. Mozvest was established to highlight the significant investor opportunities that exist in the country across its natural resources as well as its tourism and logistics sectors. Its next conference to highlight its oil, gas and energy sectors is scheduled to take place in Cape Town in August 2020.
In turn, the annual MozamReal Investment Forum was created two years ago to improve access to opportunities and to offer insights into the country’s real estate, infrastructure, logistics and construction sectors in what it considers will become “one of Africa’s fastest growing economies” .
This is according to the event’s host, Kfir Rusin, managing director of African Property Investments (API) Events, a leader in producing business-to-business real estate-focused networking conferences. The third event is scheduled, at this point in time, to take place on 1 July at the Radisson Blu Hotel & Residence in Maputo, and is expected to attract 250 delegates representing 100 companies from over 25 countries.
Adds Erasmus: “Mozambique is one of the fastest growing economies in Africa. It’s on the cusp of an economic boom and, right now, still offers incredible untapped potential for wise investors.