ANGOLA’S GOVERNMENT is issuing foreign investors with papers enabling them to start a business in the country within one day. Addressing a group of businessmen at the Hotel Marriott in Lisbon recently, the Ambassador to Angola, His Excellency Assunção dos Anjos, said how his government was working on plans to remove the bureaucracy in setting up new businesses in the country.
The Angolan government has set up two important structures: the Private Investment Agency (ANIP) and the Unique Business Office (GUE), from where prospective investors can get commercial operations licences. It means that instead of having to go to different government agencies and departments to get a licence, investors can do it all in one place in Luanda.
Only two weeks ago, the Angolan Prime Minister’s Assistant, Aguinaldo Jaime, said in Hanover, Germany, that his government’s Justice Ministry was overhauling the system to speed-up the processing of business permit applications. The idea is that a prospective investor can arrive at the office and get everything done to have his/her business legal and licensed in one day. “Thanks to our government’s policy, private investment is now allowed into sectors previously reserved for the State (such as oil),” dos Anjos explained.
He said that with the setting up of a Capitals Market, the strengthening of the financial system, the proliferation of banking and non-banking financial institutions (venture capitalism and investment fund businesses), the Angolan government is placing the legal and political frameworks in place for the privatisation of state property, thus enabling both locals and foreigners alike to gradually participate in the running of former and existing nationalised firms.
The obvious and most lucrative investment area continues to be oil, since, by 2012, 80 per cent of the country’s oil production will come from its rich, offshore, deepwater wells, while gas production has already reached an average of 700 cubic ft per day.
In 2005, the non-petroleum sector of the economy also increased by around 10.4 per cent, while the oil sector represented a massive 80 per cent of the GNP per capita.
“Additionally, not all of the wealth produced by the country stays in Angola because of the re-exportation of part of the oil dividends by investors, which is currently allowed under Angola’s Private Investment Law,” stressed the Ambassador.
Assunção dos Anjos accepted that the unemployment rate had been very high (around 42 per cent) in recent years because the economy’s fundamental base had always been agricultural, and the war had uprooted rural farmers and workers from the land, who fled to the main cities such as Luanda.
Luanda now has 4.5 million inhabitants made of uprooted refugees, while many agricultural zones were destroyed, abandoned and depopulated. However, with peacetime, unemployment is falling, settling to around 27.4 per cent in 2005. “Obviously, if the economic situation continues to improve, this will further reduce unemployment and we hope, in the short term, to bring these levels to much more acceptable ones,” he said.
Turning to social indicators, human development in Angola (education, training, professional development) stood at 0.38 per cent. The average for developing countries is 0.6 per cent, while OECD countries stand at around 0.9 per cent. “This means that, with 0.38 per cent, we are still in a very bad way, but we will solve this problem by creating education mechanisms. We want to raise the levels of development, creating mechanisms for the internal redefinition of wealth, to use the money from oil receipts to do so,” he affirmed.
“We want to eliminate poverty and create conditions for better redistribution of wealth. Starting from an agricultural base, we hope to create self-sufficiency in this area first, then move to agro-industrial development, creating jobs, sustained development, and reserve the receipts from oil, gas and diamonds for a state investment fund, to rebuild and develop the economy in non-petroleum areas,” he added.
These areas included improving health, education and training and improving the rail and road links. But there are also other areas, which are little explored by foreign companies, and in 2006-2007, the non-petroleum sector is expected to grow by 11.9 per cent in Angola. Among the possibilities for foreign investors are chemicals, carbon, adhesives, sealants, coatings, dyestuffs and paints, explosives, fertilisers, pesticides, pigments, plastics, pharmaceutical chemicals, resins, rubber and synthetic fibres.
Tourism is another key area possibility, given Angola’s unrivalled beaches, good weather and stunning scenery and wildlife.
Of course, taxation continues to be high with the Industrial Tax Rate running at 40 per cent, while the Corporation Tax Rate is between 10 to 15 per cent of the value of a given contract – depending on the type of services and income tax is a more competitive 10 per cent. Social security is presently five per cent for employees and two per cent of incomes for employees.
The burning question is, ultimately, if Angola will indeed use its oil receipts to develop the country and its myriad of possibilities, or squander them away in the back pockets of greedy and corrupt officials.