Mauritius hunts investors for Mozambique land deal

29 January 2010, Reuters
URL: http://af.reuters.com/article/investingNews/idAFJOE60Q0L820100127?sp=true

Port Louis:  Mauritius said on Wednesday it is seeking investors to buy into a plan to lease farmland in Mozambique to ease growing food security worries on the Indian Ocean island.

"The government of Mozambique is proposing to lease the government of Mauritius some 23,500 hectares of land," the financial secretary of Mauritius' finance ministry, Ali Mansoor, told reporters. A meeting is scheduled for February 2 in Mauritius with potential investors to discuss the projects and the way forward," said Mansoor.

He did not say how much the land would cost.

Mauritius intends to grow crops such as wheat, rice, pulses, maize, onions and potatoes on mainland Africa.  Food prices worldwide have eased from their record levels of 2007 and 2008 when they helped push inflation on the import-dependent island to the cusp of double digits.

Mansoor said Mozambique would only lease the land to locally incorporated companies. So Mauritius' Regional Development Company Limited (RDC), a limited company owned by the Mauritius government, will set up a subsidiary in Mozambique.

The Mauritius government, which set aside 1 billion rupees for the creation of a food security fund in its 2008/2009 budget, plans to take ownership of the leases before sub-leasing them out to investors.

Food insecure nations, particularly in the arid Gulf region, are investing in farmland across Africa. Critics have denounced such deals as land grabs.

"We are talking of land which is unexploited and we are planning to work out a scheme to give local stakeholders a 10 percent share in the projects," said Mansoor.

About half of Mauritius's cultivated land is covered in sugar cane. Supermarket shelves are loaded with foodstuffs from Madagascar, South Africa, France and Australia.