A Boom For Whom: Mozambique
The world’s business landscape has changed dramatically, leaving some sectors lagging while others offer greater stability for long-term investment opportunities. As the COVID-19 pandemic continues to dig a deeper hole in the pockets of global economies, there are however still opportunities for canny investors.
Where should South Africans be looking to invest post COVID-19? The answer to expanding your offshore investment portfolio could lie much closer to home than traditional investment destinations such as the Middle East and Europe, and South African investors are frequently urged to spread their risk by investing offshore.
“Six African countries feature among the top 10 fastest-growing economies in the world this year. Smart investors will set their sights on emerging African markets, which boast longevity through significant growth potential,” says Ettiene Erasmus. South African entrepreneur and property developer who urges investors to now consider opportunities in previously untapped regions.
According to Erasmus, there are a wealth of investment opportunities just across our borders. In his almost 30 years doing business in sub-Saharan Africa, he has found that there are attractive options for investment in countries like Botswana, Zambia, Malawi and Mozambique, to name but a few.
“As lockdowns have given people time to contemplate their financial positions, many are now looking for investment opportunities closer to home, such as in Mozambique,” says Erasmus, adding that property remains a stable long-term financial investment even through times of economic crisis.
“Other sectors like oil and gas are forging ahead with new projects that will further boost Mozambique’s economy, opening up a host of investment opportunities.”
According to Standard Bank, “South Africa represents less than 1% of the world’s economy, and limiting your investments to the local market means you’re missing out on possible lucrative opportunities to grow your wealth abroad”.
Tourism statistics in Mozambique record 331 million tourist arrivals in that country in 2018, a 101.83% increase from 164 million in 2017. For investors, this tourism potential offers attractive prospects for property investments ‒ just one sector, according to Erasmus, on the verge of a boom in the coming three to five years.
The 2020 African Economic Outlook (AEO) notes that African economies are growing faster than the global average, with projections of further growth on the continent growing from 3.4% in 2019, to 3.9% in 2020 and 4.1% in 2021. The report states that Mozambique’s GDP is expected to grow by 5.8% this year, and by 4.0% in 2021 highlighting the country’s economy as a burgeoning one with huge appeal to investors looking for a profitable stake in a slice of paradise.
According to the report, “with offshore gas discoveries estimated at 180 trillion cubic feet, the country has the opportunity to diversify the economy while enhancing its resilience and competitiveness”. It goes on to say that the gas sector could upgrade subsistence agriculture into agribusiness, support Mozambique’s electrification through different energy solutions, and foster other industries such as fertilisers, fuels, and metal-mechanic. It could also enhance macroeconomic stability, with higher revenues contributing to fiscal surpluses and a sovereign wealth fund buffering external shocks.
The discovery of natural gas has not only put Mozambique on the map as a potential global energy giant, but brought other sectors into focus as investors seek to get a piece of the action on the cusp of the anticipated boom.
According to GET.invest, a European programme aimed at mobilising investments in decentralised renewable energy projects, Mozambique has a potential of more than 2.7 gigawatts of solar power that could be easily developed. A number of projects are already in development in the country, including the French Development Agency plan to build two solar power plants with a combined generation capacity of 80 megawatts.
According to Deloitte, aquaculture has “the potential to serve as a key source of foreign exchange for the country in the long term”.
With multiple industries growing across Mozambique, the country’s transport infrastructure will have to keep pace with the demand, making it an area with further potential for investors.
United States rail developer Railnet International is set to invest $11billion in a railway line between Zambia, Zimbabwe and Mozambique. The company’s CEO Donald Kress announced in March that they were already in talks with governments in the three countries and planned to begin feasibility studies with a view to starting construction in January 2021.
Erasmus reiterates that property values are only set to rise in Mozambique, with the influx of investment and increased tourist numbers. His company, Mozambique Property Developments & Investments (Mozprops) has received up to 50 calls daily since the start of lockdown, a spike in interest they’ve never previously experienced.
Erasmus first invested in Mozambique almost 30 years ago. He is the brains behind the new mixed-use Bazaruto Island View Estate (BIVE), which offers attractive and reliable investment opportunities for those seeking a retirement oasis, a holiday home, a long-term property investment, or even an opportunity to expand a business investment portfolio.
Erasmus concludes: “Mozambique is an ideal location to invest in right now, offering huge potential for growth beyond the current global economic crisis.”
SOURCE: Irvine Partners