A video by the Financial Times reports that high property prices in Mozambique’s capital, Maputo are creating a new elite. Foreigners with deep pockets buy 80 per cent of the properties pushing out the locals, which comes some 39 years after its bitter war of independence against the Portuguese which saw 500,000 leave, trashing whatever they could on the way out.
Maputo has wonderful beachfront locations, a tropical climate and a beautiful coastline, which has spawned a rise in high-end luxury properties which to date have only been affordable by foreigners mainly from Brazil, Portugal and Dubai. Currently there are some 20,000 Portuguese living in the capital, including lawyers, engineers, architects and other professionals.
Mozambique has an interesting business model. Firstly all land belongs to the state and is leased to developers on a 50 year basis. This means that they don’t pay for it and can more or less do whatever they like with the buildings constructed. Leases can be renewed on an ongoing basis. Secondly, all building developments require community approval. This means that sweeteners are usually included in the deal for the construction of public amenities like schools, clinics and other services.
The boom in properties falls on the back of oil and gas reserves in the region, worth up to $400bn over the next 40 years. This has precipitated a massive influx of investment from across the world. The wealth, however, is not trickling down fast enough through jobs and services, the inequality gap remains huge and the use of multi-national corporation’s expertise means that the country will probably only see a fraction of its true value, until the focus of African countries becomes one of having the vision to create their own industry. Once again there is the scope to call upon highly skilled members of the African diaspora who with a vested interest in the continent, and with the right incentives could help to make the future look even brighter.
A short film, also produced by the FT last year summed up the resource opportunity and the challenges that come with it.