Maputo: $30 million shopping mall

The Globe and Mail, 2 Dec. 2005: Mozambique hangs out ‘open for business’ sign Momad Bachir Suleman has a vision: “It will be the most beautiful shopping centre in southern Africa,” he says of the monster retail and entertainment complex he is building near the waterfront here in the Mozambican capital.

That remains to be judged, of course, and the eponymous MBS Centre won’t open until the middle of next year — but in the meantime the huge glass, marble and brushed-steel complex rising behind rickety hoardings is the source of much interested speculation in the city. The mall will have more than 150 stores, a full-floor food court, two cinemas, an electronics store the size of a Wal-Mart, and office space for more than 100 companies, all of it finished with tiles and columns imported from Spain, Italy and Belgium. There are many in this town who think Mr. Suleman is more than a little mad for bankrolling this project, which he estimates will cost in the neighbourhood of $30-million (U.S.) once the last piece of marble is laid. He has an economic counterargument, noting that wealthy Maputo denizens and expatriates routinely cross the border to the South African city of Nelspruit two hours away on weekends, to go to the movies and shop in the malls — he says they spend $11-million there each month, and his goal is to keep 60 per cent of it in Mozambique. But Mr. Suleman also has an emotional reason for his giant investment. “Sometimes I ask myself, am I crazy?” he said, but added, “I’m trying to be an example — if a local business can build something so big, maybe foreigners will see that Mozambique is stable and will want to come here.”

And while a giant mall may not be the safest bet, in a country where the annual per capita income is just $230, there are already signs here that Mozambique’s aggressive move to an open economy is paying off.

The country has averaged 8-per-cent growth each year for the past decade. There are still plenty of holdovers from Mozambique’s socialist history — streets named for Karl Marx and Mao Zedong intersect in the middle of town; a Kalashnikov rifle and a hoe cross USSR-style in the centre of the flag, and only a few of the giant Soviet-inspired apartment blocks around the city have been turned into swanky condominiums.

But these days, those details look merely charming: Every lamppost has a cellphone ad, there’s a new bank every few blocks, and all kinds of new cars are backed up at the stoplights (few of which lights actually work — not all changes come instantly). Much of that impressive annual growth rate is due to a couple of huge projects, most notably the Mozal aluminum smelter, which is the largest industrial project anywhere in Africa. The 250,000-tonne-a-year primary aluminum smelter is a joint venture of BHP Billiton, Mitsubishi, the Industrial Development Corp. (IDC) and the government of Mozambique, and started operations in 2000. The smelter cost more than $2-billion to build. This one project contributed 3.2 per cent of the country’s gross domestic product in 2003, and helped push export earnings from $220-million before opening to more than $1-billion today.

Cellphone providers Vodacom and mCell (which is 70-per-cent owned by government) have achieved network coverage of a substantial part of the country — some estimates say Mozambicans are spending up to $10-million each month on cellphone air time; it’s certainly true that the wide cellular coverage has helped business move into the many areas never serviced by fixed lines.

SABMiller, the brewing giant, bought out local breweries and is putting in two major production facilities here, one in Maputo and one up north in Beira, in projects valued at a total of $50-million. The Sasol Group is at work on a natural gas pipeline valued at $1.4-billion, ferrying a cheap source of energy to the Johannesburg-Pretoria area that is the economic engine of the continent. Illovo Sugar recently put $63-million into a mill at Maragra. And a number of international mining companies are in talks with the government about exploration for tantalite and titanium.

But while business is visibly booming in Maputo, it’s also true that a half-hour drive out of the city, the great majority of people are subsistence farmers whose lives are little changed from 30 years ago. With the end of the brutal civil war in 1992, there was a “peace dividend,” when people could go back to their fields and farm. But Mozambique sets its poverty line at 50 cents a day, and 55 per cent of people live below that level.

“You would need to keep going like this for half a century,” said Dipac Jaiantilal, an economic consultant in Maputo who worked on the World Bank plans here for years. “And it would have to be development of a more broad-based manner” to have an impact on the pervasive poverty that endures outside the capital, he said. And while the megaprojects are contributing a fair chunk to growth rates, they yield only a few hundred semi-skilled jobs in each location.

“How do you get past that?” Mr. Jaiantilal asked. “That is the challenge.”

Mr. Suleman argues that a giant marble multiplex is part of the answer — and if nothing else, it should give would-be investors a different image of Mozambique to contrast with the ubiquitous thatched huts and tired farmers.


3 Responses to “Maputo: $30 million shopping mall”

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