Angola’s many natural resources make it one of Africa’s wealthiest nations.
Angola is, potentially, one of the richest countries in Africa, due to its oil and other mineral reserves, to its hydroelectric resources, and to the great extensions of cultivable terrain, of which only a small part is being used. Before independence Angola was self-sufficient in foodstuffs. The country used to export bananas, coffee and sisal, of which production is now almost nonexistent. Due to the civil war agricultural production was drastically reduced. The country has dependent on international help and on foods imports since the middle 1980’s. Cattle breeding is another important resource.
Traditionally Angola was self-sufficient in agricultural products but nowadays it deals a wide range of products that under the right circumstances it could easily produce itself. Angola has abundant forest resources, especially in North Kwanza and Cabinda, with potential for wood production and transformation. The sea in Angola is very rich in fishing resources. The mining sector (petroleum, diamonds and other minerals) reveals strong growth perspectives that will certainly stimulate the advent of both upstream and downstream industries.
Areas for the establishment of industrial and agro-industrial development poles are identified in Luanda, Benguela, Huíla, Cabinda and Huambo. The Republic of Angola has a managerial class owner of a considerable patrimony, in sub-use conditions, in need of partnerships, especially the ones with easily assimilated technology. There is a significant public managerial sector in the bank branches, transportation, energy and water that might be privatised.
The year 2002 opened new perspectives, since a political-military stability has been registered, the macroeconomic atmosphere has become stable and re-configured with the liberalization of the trade of exchange value, the application of the new customs list, the reduction of airport fees, the beginning of the rehabilitation of the productive and social infrastructures program, among others. The following programs were also planned for the year 2003: the replacement and consolidation of the administration of the State, the continuation of humanitarian assistance to the population, the continuity of the application of measures according to the state of the market, previously adjusted with the International Monetary Fund and World Bank, the start of the Integrated Program of Productive Re-launch, in order to consolidate the macroeconomic stability of the country, reduce the population’s difficulties and decrease significantly the unemployment indexes. Angola was identified in 1999 as the first recipient country of direct foreign investment, according to UNCTAD-“WORLD INVESTMENT REPORT”, unfortunately mostly in the oil sector.
The main goals of the government policy are:
1. The core key lines for commerce and investment areas aimed at building a favorable environment promoting the following priority actions.
a) Re-establishment of the macroeconomics goals
b) Creation of a legal framework consistent with the market economy system
c) Institutional reform and conclusion of the State property restructuration and privatization process
d) Credit and financial system reforms
e) Investment incentives
2. A greater interdependence between the productive sectors, namely agriculture , livestock, fisheries and manufacturing in order to secure the increase of the net value added as well as the promotion and diversification of exports.
Advantages of Investing in Angola:
- A multiparty system
- A strong compromise in the application of economic and political reforms, towards a market economy
- Respect for private property and constitutional guarantees to the investor
- Economic legislation that is increasingly flexible
- Entering into force a “ONE STOP SHOP”
- Abundance of cheap workforce and skilled labor force
- Banking and financial institutions and independent institutes that support business activity
- Availability of raw materials, energy resources, traditional and alternatives, such as natural gas
- Several business associations
- Strategic placement of external markets, particularly in the austral region
- A population that is young, dynamic, endeavoring and knowledge seeking
Area of Priority for Foreign Investment:
Foreign Investment should, as a priority is channeled towards the promotion of exports and import substitution, in particular in the following areas:
a) Reconstruction of the infrastructure
b) Agricultural, livestock production and food industry
c) Mining sector
d) Fishing and fish processing industry
e) Light industry, especially the production of goods widely consumed, in particular for agriculture support
f) Building materials industry, allowing the construction of houses of social type aiming at improving the standard of living of the population
At the moment, we are looking for investors for the Benguela railway, as well as, for the Kassinga iron-mining project among others.
Incentives for Investment:
The government has been seeking to adjust incentives, in force since pre-independence, as well as creating other incentives to make Angola a more competitive country. By law all kinds of raw materials, equipment and spare parts purchased and destined for the productive sector, such a manufacturing are exempt from duties/taxes. Some of the following types of incentives are used:
1) Financial incentives: concession of warranties, credit to the small and medium size companies
2) Substructure incentives: Set up of companies
3) Fiscal incentives
4) Customs incentives
5) Exporting incentives
6) Labor force incentive
In addition to these incentives, prices control systems are gradually being taken out of government control.
Guarantees to Investors:
Businesses constituted under the foreign investment regime have, for legal purposes, the standing of businesses under Angolan law. Therefore, common national laws are applicable to them.
The guarantees are:
1) Transfer of dividends
2) Indemnification right
3) Internal and external credit
Prior to the period of independence, with a total population not exceeding 10 million, the Angolan manufacturing sector featured 4, 000 manufacturing companies. Before and during the sixties up until 1974, the rapid development led to an average annual GDP increase in order of 7% in real terms. At current prices the average annual GDP growth was around 15%. In the year 2002 the US direct investment in Angola in the non-oil sector was in the sum of $240 million. This is a great improvement compared to 1990-2001 which was a mere $75,000. This is a great improvement and shows the confidence the US investors are beginning to have on the Angolan economy.
Angola is potentially one of Africa’s breadbaskets. Once one of the world’s largest Coffee producer, Angola needs to revitalize its’ agriculture sector. The country is blessed with large expanse of land and diverse ecological zones, deep-water ports, and a transportation infrastructure that can be re-constructed in the near term. ANIP has targeted opportunities in this sector including:
- Traditional crops; cassava, beans, corn, sugarcane, tobacco, fruits;
- Cotton farming for the textile industry
- Fishing industry, processing, vessels, dry dock, and cold-chain development.
- Infrastructure, irrigation, water management, engineering, mechanization;
- Animal husbandry, poultry farms, Corn, wheat and sugar mills, food processing, marketing, and expertise;
a) Transportation sector:
The finished war caused severe deterioration of the existing road, ports, and rail and airport facilities that all must be repaired or renovated. This is an opportunity for investors including:
- Road building, maintenance equipment and engineering, quarrying and bitumen extraction;
- Vessel building facilities for fiberglass, wood or metal fishing and inter-costals shipping industry, dry dock, and shipyard services to fishing, oil field services and freighters.
- Truck , Bus and car assembly . Machine shops and truck repair facilities;
b) Housing & Water:
Twenty years of war has caused massive internal movement of people into internal refugees. Resettlement of millions of Angolans to their ancestral home territory needs to be accomplished to ensure distribution of workers throughout the Country as well as relieving the over-crowding of Luanda. Low-cost housing using innovative building materials along with the development of a mortgage banking system in Angola is necessary, to encourage home ownership and provide capital liquidity features to an individual’s mortgage. The housing situation calls for immediate attention, quick construction and transfer of technology.
Potable water is critical especially as the internal refugee movement to the countryside or small towns evolves. Again, new technology that is available, low-cost and sized for smaller communities is the answer to clean water for these communities. Larger urban water systems must also be considered as a remedy for the larger cities of Angola.
All forms of telecommunications need to be expanded and made more egalitarian so that the greatest number of Angolans employs the usage of these technologies. Besides cellular phones, landlines, Internet, and other voice communication, data transmission and other technologies that track, monitor and complement infrastructure and productive sectors with low cost alternatives are essential
Internal consumption of energy must increase dramatically throughout Angola. This provides opportunity for electric generation and distribution, gasoline for cars and trucks, and alternative energy resource development. The oil sector is continuing to show that it is the premier industry in Angola. It is Government’s intent to provide opportunity for Angolans to partner with foreign firms in this industry. Many possibilities are apparent in this sector including, oil field services, marine package services, maintenance, bunkering, fire fighting school.
Angola views its future through its’ young people. Hence, education is a priority to develop the nation. Technical skills, business skills, and maintenance of cultural identity are important to the very well being of the nation.
- English language schools and curriculums throughout the nation that emphasizes English.
- Technical training academies, apprenticeship, and the development of standards and degrees in all technical disciplines, as well as construction of High Schools and Colleges.
Angola’s mineral wealth includes diamonds, iron, ore, phosphates, copper, feldspar, marble, granite, gold, bauxite, and uranium. The mining society of Angola is trying to mobilize $1.4 billion to revive the Cassinga project to exploit gold and other minerals in a 2,681 sq. km. area in southern Angola. Cassinga could produce 10 million tons of minerals worth $320 Million per year.