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Angola
The Business Opportunity You Never Knew About
João Caiado Guerreiro
The present powerpoint presentation was drafted considering, amongst others, the following sources*:CIA World Factbook;
U.S. Department of State;
Diário Económico;
Reuters News Corporation;
Africa Energy Intelligence;
Energy Information Administration – Official Energy Statistics of the U.S. Government.
*Please note that due to the fact that Angola is a third world country the data
contained herewith varies from source to source.
HIGH LEVELS OF GROWTH
ECONOMIC AND FINANCIAL CRISIS, PERIOD OF RECESSION
THE WORLD
ANGOLA
ANGOLA IS 5 TIMES THE SIZE OF THE UNITED KINGDOM AND
OVER TWICE THE SIZE OF FRANCE
INTERESTING FACTS:
• Population – 17,500,000• Capital – Luanda• Area – 1,246,700 sq km• Language – Portuguese• Currency – Kwanza• GDP – 84 billion USD *• GDP per capita – 4,941
USD *
*U.S. Department of State
Angola has made remarkable progress since its nearly 30-year civil war came to an end with the signing of a peace agreement in April 2002.
BEFORE 2002
AFTER 2002
CIVIL WAR
FASTEST GROWING
ECONOMY IN AFRICA
YearGDP - real
growth rateRank
2003 9.00 % 10
2004 1.50 % 156
2005 11.70 % 8
2006 19.90 % 2
2007 15.00 % 4
2008 16.70 % 4
FOURTH FASTEST GROWING ECONOMY IN THE WORLD - an average GDP growth rate of 15% (2002-2008)
OIL PRODUCTION
UNITED ARABEMIRATES
ANGOLA
NIGERIA
2,100
Million barrels per day
1,889
2,948
Angola is now a peaceful country; strategic geographic location; macroeconomic stability; inflation in single digits; growing international currency reserves; per capita income is now approaching that of middle
income countries – 4,941 USD; it used to be a marxist country, whereas now the
Government is promoting free enterprise, trade and investment.
WHY ANGOLA?
POLITICAL STABILITY
FREE DEMOCRATIC ELECTIONS - 5th of September of 2008 (MPLA won with 81,64%).
EXPECTED PRESIDENTIAL ELECTIONS IN 2009 - having the same President since 1979.
PORTUGAL IS THE PRIVILEGED PLATFORM FOR ACCESS TO ANGOLA
historical and cultural proximity (Angola was a Portuguese colony up until 1975);
Portuguese speaking country;
easy access from Lisbon which has 3/4 daily flights to Luanda;
Angolan law is inspired by Portuguese law (same civil code; corporate code, etc.).
Bilateral Investment Treaty
provides incentives, as well as additional protection to investors from both countries.
Agreement on Enforcement of Court Judgements
42 CONVENTIONS AND TREATIES BETWEEN PORTUGAL AND ANGOLA
promotes the Judicial and Judiciary Cooperation between Portugal and Angola.
Customs Cooperation Agreement
promotes the customs’ technical cooperation between Portugal and Angola.
ANGOLAN LAW
Portuguese law as of 1975
Same Civil Code;
Similar Corporate Code;
The only differences relate mainly to details, except for Oil Law.
WHY INVEST IN ANGOLA? Government is committed to progress and investment:
political stability
establishment of a legal regime of incentives; economic and political reforms; free-market economy principles; offers credible legal protection and stability to
investments.
•Democratic legislative elections in September 2008
•Presidential elections expected in 2009
Incentives
Eligibility criteriaThe tax and customs incentives, exemptions or reductions shall be granted in accordance with the following criteria:
Sector of activity
Development zone Special economic area
Sectors of Activity
agro-forestry/cattle; manufacturing; fishing; construction; health and education; roadway, railway, port, airport, telecommunications, energy and water infrastructures.
Development Zones
Zone A - Province of Luanda, as well as the main municipalities of the provinces of Benguela, Huíla and Cabinda.
Zone B - Remaining municipalities of the provinces of Benguela, Cabinda and Huíla and provinces of Kwanza Sul, Bengo, Uíge, Kwanza Norte, Lunda Norte, Lunda Sul and Zaire.
Zone C - Provinces of Huambo, Bié, Moxico, Kuando-Kubango, Cunene, Namibe and Malange.
Special Economic Zones
These areas are defined by the government on a project need basis.
Angola is one of the most difficult, yet most rewarding countries to do
business in…
SPECIFIC OPPORTUNITIES IN 5 KEY SECTORS:
1. Energy & Renewable Energy
2. Housing and Infra-Structures
3. Agriculture
4. Mining
5. Manufacturing
1. ENERGY
OIL
GAS
OIL
Angola’s economy growth is mostly due to the increase of oil production.
The control of the oil sector is secured by a State-owned group - SONANGOL.
ANGOLA was in 2008 the biggest oil producer in Africa.
OTHER INTERESTING FACTS REGARDING OIL PRODUCTION IN ANGOLA:
Proven oil reserves of 9.0 billion barrels9.0 billion barrels as of January 2008;
Oil production expected to reach 2,8 million2,8 million bpd by 2012;
In the oil sector Angola always hits its growth targets, because it always respects its contracts;
Sonangol works together with ExxonMobil, Chevron, Shell, BP, Petrobrás, Galp, Total, etc.Please note that according to recent news and following the oil prices’ reduction, Angola, as an OPEC member, will be forced to decrease its oil production to 1,55 million barrels per day.
NEW IMPORTANT PROJECTS:
SINOPEC
SONAREF
SINOPEC
China’s state oil company;
Entered the market offering two separate 1 billion USD signing bonus offers on two offshore blocks;
Formed a partnership with Sonangol.
SONAREF
Refinery in the coastal city of Lobito with capacity for a production of 200,000 bbl/d;
The project is worth 3.5 billion USD and is able to process heavy crudes;
Sonangol is proceeding with the project and refining is to start in 2012.
NATURAL GAS
Angola is a world-class hydrocarbon region and its role is expected to increase in the future.
Regarding natural gas, there are currently some projects in Angola for its transport from the oil reservoirs located offshore into the international markets, starting as of 2012.
LIQUIFIED NATURAL GAS PROJECT
Angola LNG Project is a joint venture between the following investors:
Sonangol Chevron BP Total ENIHaving already invested US $ 4bn, in order to produce 5.2 million tones a year.
To develop a Liquefied Natural Gas plant in Soyo, Zaire Province, Republic of Angola, to export it to Atlantic Basin markets and provide natural gas for use in the Angolan domestic market.
ANGOLA’S LNG PROJECT MISSION
THE DEVELOPMENT OF THE LNG PROJECT INCLUDES:
the construction of an onshore liquefaction train with storage capacity of 360,000 cm for LNG, LPG (liquified petroleum gas) and condensate;
a loading jetty for LNG tankers;
the building of a pipeline to transport natural gas to Angolan markets.
Although the total project cost has not been released, Angola LNG Project has been considered as the "largest single investment ever made in Angola" by Angola’s minister of petroleum.
Despite the aforementioned, it is estimated that such investment shall reach around 8 billion dollars.
TOTAL INVESTMENT
ANGOLA IS SET TO EXEMPT COMPANIES EXPLORING FOR NATURAL GAS FROM
PAYING TAXES
On the 24th of March 2009 the Angolan Parliament voted as to allow the Government to implement a law
that exempts gas firms in Angola from any tax burdens.
SONANGAS (subsidiary of state-owned oil company
Sonangol)
10-YEAR GAS EXPLORATION RIGHTS
Eni Angola Exploration BV, Gas Natural West Africa SL, Galp Exploration Petrolifera SA and
Exem Energy BV
Opportunities for all types of companies in the Oil & Gas sector
Involved are already the big players (ExxonMobil, Shell, BP, Eni, etc.) and their usual suppliers (Technip, Schlumberger, Halliburton, Bechtel).
Nonetheless, there remain abundant opportunities for all types of suppliers, from CateringCatering to Hotel and Engineering services!
The distribution of electricity in the country is not uniform due to a destroyed network, so Angola’s government decided to bet on renewable energies.
RENEWABLES
SOLAR POWER
WIND POWER
HYDROPOWER
FIRST FORCE – BIODIESEL PROJECT
First Force is a sound project in the field of crude vegetable oils for international biodiesel industry that is commited to contribute to Angola’s development.
PROJECT FUNDAMENTALS
Off-take pre-ageements with leading biodiesel players;
Investment of $200-$300 million;
Privileged access to the European markets;
Initial target production of 200,000 metric tons;
Life-span of 25 years.
299,000 ha
Total arable land
670,000tons
Crushing capacity
beans
172,000tons
Oil Production
$ 210 M
CapEx(cum. 3 years)
Sales
$ 171 M
400,000tons
OilseedMeal
First Force in numbers: Angola
2. HOUSING AND INFRA-STRUCTURES
END OF DEVASTATING 27-YEAR CIVIL WAR IN 2002:
Angola’s government engaged in a considerable reconstruction of roads, railways, bridges, airports, schools, hospitals and residential housing.
In 2005 the Government began using a vast amount of credit from China (around 7 billion
USD) to rebuild Angola’s public infrastructures, as well as for the investment in
several other large-scale projects.
Meanwhile, other countries such as Portugal (providing around 2 billion USD),
Brazil and Germany also started financing Angola through huge credit
lines worth several billions of dollars, in order to contribute to the country’s
overall development.
National construction programme
1 million houses by 2012
Ministry of Hotel and Tourism plans to build around
50 new hotels before 2010 when Angola hosts the
African Soccer tournament.
GOVERNMENT SUPPORT PROGRAMMES:
ONE MILLION HOUSES BY 2012
Public-private partnerships for purposes of housing construction are being created.
HOW WILL THE COMPANIES BE SELECTED?
Via tendering procedure where the most advantageous tender will be chosen.
In this context, some contracts have already been awarded to local companies for the building of approximately 200.000 houses.
Consequently, there is an opportunity in what regards supplying some of these companies.
TOTAL ROADWAYS: 76,626 km
Paved – 19,156 km
Unpaved – 57,470 km
2009 - approximately 4,835 kilometres of roads have been asphalted and repaired.
ROADWAYS:
PORTS AND AIRPORTS
In what regards this matter there is still a lot to be done…
Building
Repair
Maintenance
PORTS
Cabinda LobitoLuanda NamibeMalongo
Shipbuilding and repair industry
Trade development
Job creation
AIRPORTS
TOTAL – 211
With Paved Runways – 30
With Unpaved Runways - 181
FOREIGN WORKERS IN ANGOLA
Any foreign worker in Angola needs to hold a working visa. To obtain this visa, the worker has to comply with the following requirements:
hold a passport valid for more than 6 months; have an adequate visa; have at least USD 200 for each day in Angola, and accommodation; have an international vaccination certificate; and not being prohibited from entering the country.
3. AGRICULTURE
Angola has launched an ambitious plan to exploit both its fertile soils and
high global food prices to attract investments in
agriculture over the next four years.
Of its 57.4 million ha of arable land, only 5 - 8
million ha are being used.
Extensive river system
Varied environment
Arable lands
Huge water reserves
Potential for production of tropical andsubtropical crops
ANGOLA’S MAIN AGRICULTURAL PRODUCTS:
CoffeeSugarcane
CottonSisalCorn
ManiocTobaccoBananas
Medium-Term Development Programme for 2009-2013 of the Ministry of Agriculture and Rural Development (Minader) More than 400 million USD.
Financing of small and medium producers, as well as associations and cooperatives who operate in this sector Credit line of 350 million USD.
GOVERNMENT SUPPORT PROGRAMMES:
Creation of 14 agro-forestry research centers Credit line of 7, 3 million USD
High-quality coffee production
Credit line of 280 million USD
Public funds in the amount of 1.000 million USD;
Creation of 78,000 work posts;
Increase on the cereal production which shall reach 385 thousand tons within the next three years;
Construction of 55,000 houses in the rural areas together with 127 new schools, 127 medical centers, 71 rural markets, as well as 130 convenience stores.
DEVELOPMENT PLAN FOR AGRICULTURE
4. MINING
Angola is a resource of top quality gemstones and Luanda’s region is one of the most important and prosperous diamond producing areas in the world.
According to recent studies it is estimated that the Angolan subsoil contains 35 of the 45 most important minerals traded in the world. The country’s diamond production in 2007 reached approximately 9.7 million carats.
5. MANUFACTURING
The Angolan Government is set to relaunch the manufacturing industry in the country during the period of 2009/2012.
REQUIREMENTS:
increase of value of natural resources;
rehabilitation of the industrial park;
promotion of complementarity of the industrial structure.
MODERN INDUSTRIAL SEGMENT
UPDATED TECHNOLOGY
INTERNATIONAL COMPETITIVENESS
EXPECTED DEVELOPMENT IN THE MANUFACTURING SECTOR (albeit from a very low
base)
31,9%
35,0%
36,9%
GROWTH
2010
2011
2012
MAIN INDUSTRIES TO BE DEVELOPED IN THE MANUFACTURING SECTOR:
Machines and equipment, tools and accessories;
Textile and footwear;
Timber;
Cellulose and paper pulp;
Building materials;
Petrochemical;
Ships construction, repair and maintenance.
HOW TO INCORPORATE A COMPANY (main steps) :
Define corporate name / activity
Articles of Association by public deed
Commercial Corporation Registry
Social Security
Commercial License
Declaration of start of activity
ANGOLA,
The opportunity you will not want to lose and which Franco Caiado Guerreiro & Associados
will help you explore…
Contact Us
Franco Caiado Guerreiro & Associados Rua Castilho, n.º 39 – 15º 1250-068 Lisboa Tel.: 213717000 / Fax: 213717001
www.fcguerreiro.com
João Caiado Guerreiro [email protected]
Sara Galvão Soares [email protected]
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