By CHRIS GRAEME [email protected]
Angola has interesting, long term investment possibilities for Portuguese and foreign business, said a leading banker at the American Club on Tuesday.
Dr. Emídio Pinheiro, who has been President of BPI subsidiary company Banco Formento Angola since 2005, said it was important to not “get stressed”, have a well thought out, long term strategy and “a lot of upfront entrance investment” in order to tap the golden opportunities in one of Africa’s fastest growing markets.
The banker and economist also said that Portuguese language was imperative and that foreign business wanting to do business in Angola should find Portuguese or Brazilian partners.
He said that it was no coincidence that Portuguese and Brazilians had the “edge” in the market because of the language and, in the case of Portugal, a shared political, cultural and economic heritage, adding that a Portuguese partner is “a useful armament in your arsenal when doing business”.
However Dr. Pinheiro did criticise the rampant red tape in Angola and the fact that deals over five million US dollars needed the approval of at least seven ministers.
He also hinted at high levels of corruption and the need to have an Angolan partner on the ground with connections who knew the way things worked.
The watchwords for doing business in Angola were “persistence”, “agility”, “a cool, sensible head” and “local partners”, who were “essential to get a foot in the door”.
He said that transferring large amounts of money and getting work visas could be problematic, that logistical and operational management could be cumbersome and imposed problems, and admitted that the country was still too dependent on oil and the State.
On the one hand, from 2005 to 2008, Angola had enjoyed spectacular growth thanks to oil revenues, which had helped its reconstruction after years of civil war, but the subsequent financial crisis from 2008 and 2009 and the fall in oil prices had made things tougher.
Public debt was running at 38 per cent of GDP now compared to 28 per cent in 2006, Angolan oil now fetching US$80 a barrel but had dropped down from +68 per cent in 2006 to just +25 per cent in 2010.
Interest rates had soared from 11.1 per cent in 2006 to 24.4 per cent in 2010 while inflation, while rampant in 2006 at 18.5 per cent, was still high at 13 per cent.
Despite all these fluctuations, overall annual oil growth rates in 2010 stood at three per cent and were projected at six per cent for next year.
With so many infrastructure projects – homes, schools, hospitals, roads and businesses – to develop, Angola would continue to be a good bet for the clever investor for years to come.