ANGOLA

theworldfolio.com

ANGOLAIS THIS DIAMOND FOREVER?

TELECOMS: Moving at high

speed

CONSTRUCTION: Building boom

responds to needs of new middle

class

CHINA IN ANGOLA: Win-win

partnership or marriage of

convenience?

DIAMONDS: Angola’s diamonds rock

OIL AND GAS: A stop-and-start revolution in natural gas

INVESTMENTS from Angola aid its former colonial master,Portugal

20AGRICULTURE: Biocom:

Sweet energy from sugar

cane

Issue No. 1, October-December, 2014

A DIFFERENT PERSPECTIVE

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Welcome to the first issue of The Worldfolio Magazine, published by The Worldfolio, a business news portal which is part of the AFA group of companies.

The Worldfolio provides intelligence about econo-mies with the highest growth potential, focusing on un-derstanding them from within. In a world where these countries play an increasingly important role, and where no one has a monopoly on information, it’s essential that international investors and companies – and indeed, all readers with global interests – hear what the leaders of these high-potential economies have to say. Under-standing their viewpoints is key, not only to being well-informed, but to doing business in these countries.

We can provide that information through our net-work of correspondents, which each year is present in an average of 80 cities around the globe in more than 50 countries, where they conduct an average of 3,000 one-on-one interviews with government officials and senior business executives.

The Worldfolio Magazine is a quarterly publication that focuses on the economies we consider most inter-esting and remarkable in theworldfolio.com. We conduct in-depth analysis and present it in a fresh, contemporary magazine format that contains interesting stories. This first issue will be distributed to senior business execu-tives, decision makers and opinion leaders in the areas of New York and Washington D.C. They were chosen through a careful selection process based on the sector they represent and the importance of their companies.

We’ve chosen Angola as the subject of our first issue, due to its growing importance in the global economy, the wide array of opportunities it presents and because it’s one of the fastest-growing economies in the world. Africa’s sec-ond-largest oil producer, Angola also boasts a wide range of mineral riches, most notably diamonds. The U.S. is cur-rently Angola’s second-largest trading partner; accumu-

AN INTRODUCTIONTHE WORLDFOLIO

MAGAZINETO

Alexi Fernández Executive Director, The Worldfolio

lated American investments in the country now total over $25 billion.

TheWorldfolio.com has just been redesigned to structure the in-formation in such a way that it adds value to the content we produce and makes it friendlier for our users and readers. The new platform orga-nizes information by sector and by country, just as we did in our previ-ous website. However, the new site also includes personal profiles and company profiles so our readers can know more about the different people and companies they want to contact or do business with in the countries of their interest.

We have also redesigned our blog, TheWordlfolio.com/blog to make it a better source of informa-tion about the economies we ana-lyze. In our blog you can find first-hand information about what to do, how to do business and about social projects we consider inter-esting in the countries where we are present.

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4 TABLE OF CONTENTS

TABLE OF CONTENTS

1issue

08 INTRO: Using oil wealth to create lasting prosperity

10 ANGOLA:The big picture, in facts and figures

16 DIAMONDS: Angola’s diamonds rock

21 ANGOLA/PORTUGAL:Role reversal: Affluent Angola lends a hand to impoverished Portugal

24 OIL AND GAS: A stop-and-start revolution in natural gas

30 INTERVIEW: Oil MinisterJosé María Botelho de Vasconcelos

32 BATTLE FOR AFRICA:The U.S.-China struggle for influence on the continent plays out in Angola

37 BANKING AND FINANCE:New players wrestle for their share

of a growing market

42 INTERVIEW:Teodoro de Jesus Xavier Poulson,

Member of Investment Committee, FACRA

44 DOING BUSINESS:New rules seek to change old habits

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5 TABLE OF CONTENTS

48 INTERVIEW:Trade Minister Rosa Escorcio Pacaviria de Matos

50 CONSTRUCTION:Building boom struggles to repair war damage,

satisfy the needs of a new middle class

56 TELECOMS:Moving at high speed

62 INTERVIEW:Antonio Nunes, CEO, Angola Cables

64 THE VIEW FROM HERE:Two economists based in Angola give their views

on the country’s short- and medium-term prospects

68 AGRICULTURE:Biocom: Sweet energy from sugar cane

74 CHINA IN ANGOLA: Win-win partnership or marriage

of convenience?

78 LAND MINES: The civil war’s lethal legacy

82 TOURISM: Undiscovered places for intrepid travelers

92 LIFESTYLE: Traffi c snarls, soaring prices and kizomba


Contributing writersto this issue of Worldfolio:

Manuel José Alves da Rocha, who contributed an essay to The View From Here section, is an economist and the director of the CEIC (Centre for Studies and Sci-entifi c esearch at the Catholic University of Angola.

Nathalie Bourgeois, a freelance journalist based in the U , wrote our story on diamonds. A former reporter for Associated ress and lle magazine in aris, she writes for a variety of publications, in French and in nglish.

Aled Bryon, a staff writer for The Worldfolio magazine, reported on the oil industry in Angola, as he has for a number of special reports at Afapress. Aled also con-tributed the sidebar on food in our ifestyle section.

Benjamin Jones is a veteran journalist and a former correspondent for the New York Times in adrid. In this issue, he tells how ortugal’s ailing economy has been aided by investments from Angola and also about the revolution in the country’s farm sector.

Jonathan Meaney is a staff writer for The Worldfolio magazine. He has reported extensively on business and economics, with a focus on telecoms. In this issue, onathan also writes about Angola’s invest-ment rules, its relations with the United States, and about music.

Robert Latona, who contributed the story on land mines in Angola, is a freelance journalist in adrid who writes about politics, current affairs and the arts for a number of print and online publications.

Estelle Maussion is correspondent for Agence France ress and adio France International in uanda. stelle’s story on ifestyle in Angola is based on her

own experiences living and travelling extensively in the country.

Richard Middleton, author of the article on Angolan banking and fi nance, is a ondon-based freelance journalist who’s written across business topics includ-ing the global drinks industry and the international T market. He’s also worked for The Independent newspaper and C Sport nline.

Nicholas Staines, who contributed an essay to The View From Here section, is the resident director of the In-ternational onetary Fund in uanda.

Rob Train, another freelance journalist resident in Ma-drid, wrote the articles on the Angolan tourism and construction industries. ob is a former staff mem-ber of the nglish language edition of l a s, Spain’s leading daily newspaper.

ABOUT THE AUTHORS

ÁLVARO LLARYORAChairman, The Worldfolio

ALEXI FERNÁNDEZxecutive Director, The Worldfolio

EDWARD HOLLANDditor, The Worldfolio magazine

KRISTIN KJELLGARDHead of ournalism Dept.

Art Direction graphic design EDUARDO BERTONE, SHERGIO SERRANO, TAÍNA ALMODÓVAR

hoto credits Cover Angola Image Bank. age 3 Ministry of Petro-leum, Angola. age 32 Cruks (Via Creative Commons).

age 35 U.S. Government. age 8 Voice of America. age 5 Estelle Maussion. ages 0- Afa Press. ages 2- Arianne Martin. age 3 Midan Studios

for Geraldo Fashions. Model: Christianne of Step Models. age Joke Schot. All other photos Thinkstock

rinted y QUAD GRAPHICSDistribution GANNETT PUBLISHING SERVICES

1I S S U E

S T A F F


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If Africa is a continent of contrasts, nowhere are they as stark as in Angola. Africa’s second-largest oil producer and one of the fastest-growing economies in the world, Angola has a per capita income of more than $4,500 a year, qualifying it as an upper-middle income nation. Yet government offi cials admit that 3 of its people live below the poverty line

The country holds vast tracts of arable land and an abundant water supply, but oil revenues and a robust currency have led it to import nearly all the food consumes. Still, agriculture - or rather subsistence farming - continues to be the largest employer, occupy-ing more than two-thirds of the work force.

The contrasts are not only in the numbers. A nighttime view of the skyline of Luanda, the world´s most expensive city, shows new hotels lining the Ilha, the fashionable beachfront area, while rows of illuminated construction cranes bear witness to the ongoing building boom; this could easily be Doha, the capital of Qatar, mi-nus the minarets. Daytime reveals a city where the majority of the housing is substandard and power outages so frequent that even the most exclusive buildings have their own electricity generators.

Angola’s story is not simply that of a petro-state which has come into enormous wealth in a short time and is suffering growing pains. Twenty-seven years of civil war which ended in 2002 shattered the country’s infrastructure and stunted its economic growth. The war years were followed by a decade of dizzying expansion based almost

exclusively on oil revenues, to the detriment of the rest of Angola´s considerable natural resources. The world fi nancial crisis and the decline in crude oil prices provided a reality check, as GDP growth plummeted from 3.8 in 200 to 2. in 2008

Thanks in part to a standby program from the International Monetary Fund, the government of President José Eduardo dos Santos managed to put public sector fi nances in order, stabilize the exchange rate and bring in ation down to historically low levels. Today, Angola’s government has embarked on an ambitious plan to develop the non-oil sectors by investing petroleum revenues in a variety of sectors: infrastructure, mining, telecommunications, agriculture, tourism, all of it designed to create jobs and build a diversifi ed, sustainable economy.

In this premier issue of The Worldfolio magazine, we take a look at these and other sectors of Angola´s economy. We also tell about the risks and rewards of doing business in the country and what it´s like to live there on a day-to-day basis.

More importantly, we provide a platform for experts within the country to give us their views on Angola´s near and medium-term fu-ture. In separate articles, two leading economists - Nicholas Staines, the IMF´s resident director in Angola, and Manuel José Alves da Rocha, professor of economics at the Catholic University of Angola -provide differing and stimulating viewpoints on what needs to be done to assure Angola´s ongoing economic and social stability.

ANGOLA:USING OIL WEALTH TO CREATE LASTING PROSPERITY

Edward Holland, Editor, The Worldfolio.

ANGOLA’S GOVERNMENT HAS EM-

BARKED ON AN AMBITIOUS PLAN TO

DEVELOP THE NON-OIL SECTORS

BY INVESTING PETROLEUM REVE-

NUES IN A VARIETY OF INDUSTRIES

Angola INTRO 8

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Our cover story explains how diamonds came to be “forever,” and describesAngola´s place in this worldwide industry, which has been benefi tting from an increase in demand for luxury goods in India and China. The return of the diamond giant DeBeers to Angola in 2014 is just one indication of how important the country´s role is in this $ 2 billion annual business.

Diamonds notwithstanding, oil and gas are today the lifeblood of Angola´s economy and will continue to be for years to come. During 2014, the industry has been vexed by technical problems that have lowered crude production and brought iquefi ed Natural Gas (LNG) exports to a halt. Still, as Aled Bryon explains in his article, Angola looks set to be a major power in the world oil industry over the coming decades as more and more new reserves are discovered each year. In an accompanying story, we examine the government´s sovereign wealth fund, which is meant to channel oil resources into other productive areas, in order to diversify the economy and create jobs.

As Angola struggles to rebuild its war-damaged infrastructure and provide housing and social services for a growing population, the building trade is on a roll. Construction companies from Portugal, Brazil and most notably, China, have been getting the business, and it’s hard to com-pete with the latter, whose projects are fi -nanced by their own Export-Import Bank.

In a separate article, we examine the overall role of Chinese companies in the Angolan economy, where they have come to occupy a unique if not always welcome position, based on China´s need for petro-leum and Angola s requirements to fi nance the rebuilding of the country.

While the Chinese have been making inroads in Angola and throughout Africa over the past decade, the United States has sought to recover its position across the continent with trade agreements and ex-port fi nancing for U.S. companies doing business in the region. Jonathan Meaney explains how Angola has become the fo-cal point for this struggle for in uence be-tween the world’s two largest economies.

Even with the advantage of govern-ment fi nancing, it s diffi cult to do business in Angola, due to a complicated set of regu-

lations, frequent bureaucratic delays and ongoing concerns about transparency. Our article examines the recent Private Invest-ment Law, laying out the rules, but also provides some caveats, telling what organi-zations such as the World Bank and Trans-parency International are saying about do-ing business in Angola.

Setting up new companies requires credit and Angola s banking and fi nance sector has seen rapid expansion in the past seven years, with the number of banks nearly doubling. ven so, nearly 80 of the assets in the banking system remain in the hands of half a dozen major institutions.

ur article describes the fi nance system as a whole and how recent reforms have made it more attractive for foreign inves-tors. In an interview, Teodoro Poulson of the public venture capital fund FACRA ex-

plains how the government is exploring new ways of fi nancing for companies.

While companies from abroad have been seeking entry into resource-rich Angola, the country itself has been do-ing some foreign investing in its former colonial master, Portugal. We take a look at how Angolan investors, including the state oil producer Sonangol, have acquired major stakes in some of Portugal´s largest companies and the controversy these in-vestments have sparked between the two governments.

Among the other sectors we examine are agriculture, which is undergoing a re-naissance thanks to public-private partner-ships such as the Biocom project to extract ethanol from sugar cane and turn it into fuel; and the nascent tourism sector, which is just beginning to attract travelers to the extraordinary hidden treasures in Angola´s vast and varied landscape.

Finally, in our Lifestyle article, we take a look at what it´s like to live in Angola on a daily basis, including the tribulations and satisfactions of life in the capital, Luanda.

This fi rst issue of The Worldfolio mag-azine is meant to provide an overview of the country, its economy and the rewards and pitfalls of living and doing business there. We hope you enjoy it and we welcome your comments at [email protected]

THE NASCENT TOURISM

SECTOR IS JUST BEGIN-

NING TO ATTRACT TRAVEL-

ERS TO THE EXTRAORDI-

NARY HIDDEN TREASURES

IN ANGOLA´S VAST AND

VARIED LANDSCAPE

INTRO Angola9

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10

ANGOLAGENERAL DATA

GEOGRAPHICAL LOCATION: Western Coast of Southern Africa

CLIMATE: Tropical

AVERAGE TEMPERATURE: 30ºC (86ºF) maximum, 17ºC (63ºF) minimum

INHABITANTS: 20.9 million (more than 5

million in Luanda.)

AREA: 481,083 sq. miles;

1,025 miles maritime frontier; 3,005 miles land frontier

SOURCE: ANIP “How to Invest in Angola”, ANIP (Angola National Private Investment Agency), 2013

GOVERNMENT: Democracy led by MPLA

PRESIDENT: José Eduardo dos Santos

MAIN RELIGIONS: Catholic and Protestant

HIGHEST POINT: Moco Hill (2.620 meters,

9,251 ft.) in Huambo

LANGUAGE: Portuguese - official; Plus various

local dialects: Umbundu, Kimbundu, Kikon¬go, Fiote, Chokwé, etc

MAIN RIVERS: Kwanza, Cunene

and Cubango

MAIN AIRPORT: 4 de Fevereiro

in Luanda

LUNDA NORTE

LUNDA SUL

MOXICO

CUANDO CUBANGOCUNENE

HUILA

NAMIBE

BENGUELAHUAMBO BIE

CUANZA SUL

BENGO

MALANJE

UIGEZAIRE

CUANZA NORTE

LUANDA

BenguelaLobito

Cabinda

LubangoNamibe

CONGO

REP.DEM.CONGO

ZAMBIA

NAMIBIA

MAIN HARBOURS: Luanda, Lobito and

Namibe

MAIN BEACHES: Ilha do Cabo, Palmeirinhas and Mussulo (Luanda); Baía

Azul, Caota and Caotinha (Ben¬guela); Restinga (Lobito);

Miragens, Azul (Namibe)

CURRENCY: Kwanza (Kz)

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12

ANGOLA SUB-SAHARAN AFRICA (DEVELOPING ONLY) UPPER MIDDLE INCOME COUNTRIES

SCHOOL ENROLLMENT, PRIMARY (% GROSS)

150

140

130

120

110

100

90

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CO2 EMISSIONS (METRIC TONS PER CAPITA)


6

5

4

3

2

1

02004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CO2

ANGOLA NIGERIA SUB-SAHARAN AFRICA DEVELOPING COUNTRIES SOUTH AFRICA

876543210

2012 2013 2014 2015 2016

121086420

-2-4-6

2012 2013 2014 2015 2016

ANNUAL GDP GROWTH (%) CURRENT ACCOUNT BALANCE (%GDP)

Source: World Bank, World Development Indicators

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14

ANGOLA

POVERTY HEADCOUNT RATIO AT NATIONAL POVERTY LINE IMPROVED WATER SOURCE, RURAL

(% OF RURAL POPULATION WITH ACCESS)

36.6%OF POPULATION

2008

2004 2013

40.0%

37.5%

35.0%

32.5%

30.0%

LIFE EXPECTANCY AT BIRTH, TOTAL (YEARS)


80

70

60

50

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

GNI PER CAPITA, ATLAS METHOD (CURRENT US$)


8000

6000

4000

2000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: World Bank, World Development Indicators

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ANGOLA’S DIAM NDS ROCKIn 1948, a copywriter for the Ameri-can advertising agency Ayer created a slogan for one of its major clients, the De Beers Group, the world’s larg-est diamond producer: “A Diamond is Forever.” This simple phrase helped to position diamonds in popular culture as a token of long-lasting, legitimate love and, for the men who buy them, a sym-bol of social status.

It also helped the growth of the diamond business worldwide. Accord-ing to the U.S, consulting fi rm ain

Company, the share of American brides receiving diamond engagement rings grew from 10 percent in 1939 to 80 per-cent by the end of the twentieth centu-ry, while the share of Japanese brides grew from 6 percent in the 1960s to nearly 80 percent.

Today, a new tide of brides is rising in China and India, two countries which are seeing the emergence of a huge middle class eager to adopt the Western way of life. China surpassed Japan in 2010 as the second-largest buyer of diamonds behind

the U.S., where demand rose 7 percent that year, compared with 25 percent in China and 31 percent in India. This surge in demand among the nouveaux riches in the Far East is today driving the market for diamonds, and one of the countries set to benefi t is Angola.

Already the world’s fi fth largest producer by value, and seventh by vol-ume, Angola’s diamond industry still has enormous, untapped resources that are already attracting renewed interest from foreign investors.

ALREADY THE WORLD’S FIFTH-LARGEST DIAMOND PRODUCER, ANGOLA IS SET TO BENEFIT FROM THE SURGE IN DEMAND FOR THE GEMS AMONG CONSUMERS IN RISING ECONOMIES SUCH AS CHINA AND INDIA.

By Nathalie Bourgeois

DIAM NDS

Angola DIAMONDS 16

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“A DIAMOND IS FOREVER.” This simple phrase helped to position diamonds in popular culture as a token of long-lasting, legitimate love and, for the men who buy them, a symbol of social status.

DIAMONDS Angola17

16-18 Diamonds.indd 17 14/11/14 13:28

“Our potential is huge,” says Carlos Sumbula, CEO of the state-owned diamond mining company, Endiama. He explains that the government recently decided to update its National Geol-ogy Map (PLANAGEO), in order to get an overall picture of the country’s potential in diamonds and other precious gems.

One of the companies already responding to this potential is De Beers itself. In April, the company successfully nego-tiated a new diamond exploration license with the Angolan government. De Beers had been in the country between 2005 and 2012 but had given up its license because of poor results.

According to the World Diamond Council, an estimat-ed $13 billion worth of rough diamonds are produced each year, of which approximately $8.5 billion (65 percent) are from Africa. The diamond industry employs some ten million people around the world. Global diamond jewelry sales have increased three-fold in the past 25 years, and are currently worth in excess of $72 billion annually. And the sector is buoy-ant: natural, rough diamond prices are expected to rise by 5 to 10 percent in 2014, due notably to higher sales in India, China and apan, according to euters. ain Company as the An-twerp World Diamond Centre (AWDC) say they will continue to soar at least until 2018.

“So, you can understand why prices are going to increase and why this is a very, very good business to be in,” De Beers Group CEO Phillipe Mellier said recently. Mellier has said that he expects the demand for polished gems to grow by up to 4.5% in 2014.

Angola’s diamond industry began a century ago under Portuguese colonial rule and is today emerging from a long period of diffi culty as a result of the civil war and, more re-cently, the worldwide fi nancial crisis. roduction has re-mained relatively stable at around eight million carats per year since 200 and, according to government fi gures, pro-vided revenues of $1.17 billion in 2013. Geology and Mines Minister Francisco Quieroz said in June he expects diamond production to surpass 10 million carats this year.

However, Angola is keen to avoid the curse that has plagued other countries blessed with a wealth of minerals by keeping control over its resources, This is why its diamond industry is run through the state company Endiama, under the supervision of the Ministry of Geology and Mines.

Endiama is responsible for negotiating concessions and holds the largest stake in each of the joint ventures that op-erate Angola’s diamond mines. Among the private partners in these joint ventures are some of the largest companies in the world, Apart from DeBeers, these include Odebrecht (Brazil), BHP Billiton (an Anglo-Australian conglomerate headquartered in Australia), Alrosa (Russia), and Petra Dia-monds, a diamond mining group headquartered in Jersey. Most of the joint ventures also grant minority participation to private Angolan companies, many of which lack high-level technical capabilities.

The biggest diamond mining operation, Catoca, is owned by a consortium composed of Endiama, Alrosa, Odebrecht, and LLV of China. Founded in 1995, Catoca is the world’s fourth largest-diamond mine, accounting for about 75 percent of the country’s production, It is located in the northeastern corner of Angola, where most of the extracting is conducted and the greater part of the known reserves are located.

What is particularly attractive for mining companies is that, according to government and independent experts, only 40 per-cent of the Angola´s diamond potential has been explored.

Just recently, the Australian mining company Lucapa Diamond discovered a giant, 32.2 carat white diamond in its Lulo mine, northeastern Namibe province. Lucapa said in June that it expects the Lulo mine to outproduce Catoca within two years and that it may hold deposits of up to 500,000 carats. In 2012, another Australian company, Lonrho Mining, discovered an exceptional, 131.5 carat stone in the same area. This diamond was even bigger than the legendary 106-carat Koh-i-Noor (“Mountain of Light”) presented to Queen Victoria in 1850 and set in the crown made for the late Queen Eliza-beth for the coronation of King George VI, in 1937.

Angola DIAMONDS 1818

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There are currently 10 mines in op-eration in Angola – three to explore pri-mary deposits (kimberlites) – Catoca, in Lunda Sul province, Camutué and Luô, in Lunda Norte– and seven for second-ary deposits (alluvial deposits) –Cuango, Chitotolo, Canvuri, Luminas, Chimbon-go, Somiluana and Calonda, in Lunda Norte. Angola plans to increase produc-tion at an annual average rate of 5 per-cent and in order to do so, it hopes to attract more foreign investors. Sumbula of Endiama is keen to emphasize that, “the industry offers business opportu-nities for prospecting, mining, trading, cutting and polishing and jewelry. It also provides investors with economic, social and political stability, a good cus-toms regime, attractive mining legisla-tion, excellent diamond quality and im-portant investments in infrastructures. These will contribute to cut costs and increase revenues.”

Before a diamond reaches the pocket of a nervous young man about to

propose to his fi anc e, it goes through a lengthy and complicated process, which explains in part why it is so pricey. To begin with, diamond fi elds are extremely rare. There are only about 20 major diamond mines in the world, and 11 of them provide about 62 percent of the world’s production of diamonds by carat, according to Bain

Company. The majority are in Afri-ca, but there are also mines in Russia, Australia, and Canada. A great deal of drilling must be done in order to obtain just few of the gems: production varies by mine, but the world’s richest mine, Jwaneng in Botswana, has to move on average a ton of rock to get 1.4 carat of rough diamond.

All this has a cost on the environ-ment, and that’s another aspect that Angolan authorities are keen to control. Under the slogan “Mining is necessary, preserving is possible,” Catoca carries out a number of programs aimed at controlling the environmental impact of

mining (air, water and soil), the recov-ery of degraded areas - notably by plant-ing trees - and the management of solid and liquid waste. Furthermore, Catoca is in the process of obtaining the ISO

00 quality certifi cation for its nvi-ronmental Management System.

Once extracted, rough diamonds are sorted, then cut and polished. In the process, they lose about half of their original weight. Traditionally, most of the stones were cut and polished in only a few centers in the world, Antwerp (the Netherlands), Tel Aviv (Israel), New York, and Russia. Nowadays, the smaller stones are increasingly cut in India and China, where labor costs are cheaper. Once cut, the diamonds reach the man-ufacturers, of which it is estimated that there are some 10,000 worldwide. Most are anonymous, but some have become global brands that have contributed to the legend of diamonds: Blue Nile, Cart-ier, Tiffany, Bulgari andHarry Winston, to name a few.

Angola’s diamond industry still has enormous, untapped resources that are attracting renewed interest from foreign investors.

DIAMONDS Angola1919

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Now, if a diamond can (arguably) make a woman happy in the so-called first world, does it make a man happy in Africa What is the cost of diamond mining and trading for local peo-ple In the age of global and instantaneous information, that’s a question that an increasing number of customers worldwide ask themselves before making a purchase.

Here it should be noted that the history of diamonds has been closely linked to cinema, from Mae West to Marilyn Monroe. One film alone contributed a great deal to raising awareness about a dark chapter of the diamonds saga. Blood Diamond (2006), star-ring Leonardo DiCaprio, showed how the illegal trade of diamonds fuelled bloody civil wars in Africa throughout the 1990s. Angola was no exception, as UNITA (União para a Independencia Total de Angola) rebels sought to control diamond-producing regions to finance their war against government forces.

In order to sti e UNITA’s supply sources and to preserve its all-important diamond sector, Angola was one of the first coun-tries to adhere to the idea of certifying the origin of diamonds. In 2002, it was one of the founders of the Kimberley Process, an initiative carried out jointly by governments, industry and civil society to stem the ow of con ict diamonds, following a 2000 resolution by the United Nations.

As proof of Angola’s commitment to keeping the diamond in-dustry transparent, it was recently elected Vice Chair of the Kim-berley process for the year 2014, and Chair for 2015. “It is a proud moment for the Kimberly Process that a country which, once af-

icted by civil con ict, has now regained political and economic stability and, as a consequence, is able to assume a position of leadership in the very institution that helped set it on its way to re-covery,” said the President of the World Diamond Council, Avi Paz.

Diamonds are also a key factor in the current economic boom; they account for 5% of GDP, still a far second to oil at 45%, but nonetheless an important contributor to raising living standards. A recent Boston Consulting Group report notes that, “Angola’s prog-ress continues to overcome the advances recorded by other coun-tries rich in natural resources.” According to a 2013 study by the Boston Consulting Group and the Tony Blair Africa Governance initiative, Angola is among the countries whose well-being has im-proved most in the past five years in Africa not only has it enjoyed rapid growth in GDP per person (an average of 11.1 percent per year between 2001 and 2010), but it has also done well at translat-ing that strong growth into improved well-being.

But you don’t need to read a lengthy report to see that for yourself. In Luanda, Angola’s vibrant capital, nestled on a horse shoe-shaped bay, the skyline has dramatically changed over the past ten years, with dozens of skyscrapers now crowding the landscape. The white sand beaches are lined with elegant ca-fes, and there’s almost an air of dolce vita around, which is felt throughout the night as young clubbers dance to the mesmer-izing beat of Angolan music. It would be a cliché to say that dia-monds are Angolans’ best friends, but they are certainly part of the hope of a better future. After such a troubled and painful past, there’s no doubt that for Angolans, diamonds rock.

Global diamond jewelry sales have increased three-fold in the past 25 years, and are currently worth in excess of $72 billion annually.

Angola DIAMONDS 20

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A traveler passing through Lisbon and its environs these days will notice the stylishly-dressed Africans window shop-ping in the upscale neighborhood of Chiado, or taking their leisure at the beachside cafés of nearby Cascais, the resort that was once a favorite watering hole for European monarchs.

These visitors are almost certainly from Angola, and are here to buy up real estate properties or look after their investments in a wide range of companies, both listed and private. They are the vis-ible evidence of an historic role reversal in which the once impoverished colony that was ruled and exploited by Portugal for more than 00 years has become the financial savior of its cash-strapped and debt-ridden former master.

Angola certainly has the deep pockets to help Portugal. Africa’s second-largest petroleum producer, with an average output of about 1.7 million barrels per day in 2013 and huge reserves, the country also boasts sub-Saharan Africa’s third-largest economy.

Petroleum and gas provide 75% of government revenue and 43% of GDP, or more than $40 billion per year to An-gola, one of the fastest-growing econo-mies in the world.

Angolan investment in Portugal be-gan to take off in 2008, when the Afri-can nation’s state-owned oil company, Sonangol, along with Banco Privado At-lantico, purchased a 47.3% stake in the

Angolan branch of Portugal’s biggest private bank, Millennium BCP. (Sonangol is today the largest shareholder of the parent Millenium BCP, with 15.08%.)

That same year, cracks began to appear in the Portuguese economy and the country eventually followed many of its neigh-bors into the Euro zone debt crisis which led to devastated econ-omies, bankrupt businesses and millions of people out of work.

In 2011, the Portuguese government agreed to a 78 billion euro ($106 billion) bailout from the European Union and the International Monetary Fund, which forced the country to en-act stringent austerity measures and painful economic reforms.

ROLE REVERSAL: ANGOLA’S INVESTMENTS AND EXPORT MARKETS PROVIDE RELIEF TO ITS FORMER COLONIAL MASTER, PORTUGALBy Benjamin Jones

In a historic role reversal, Angolan com-panies have been investing heavily in Portugal since 2008, aiding the former colonial power to survive the economic crisis. This “strategic partnership” has not been without controversy, but is likely to continue as Portugal´s economy recov-ers and Angola’s continues to grow apace.

THE ONCE IMPOVERISHED COLONY THAT WAS

RULED AND EXPLOITED BY PORTUGAL FOR

MORE THAN 400 YEARS HAS BECOME THE FI-

NANCIAL SAVIOR OF ITS CASH-STRAPPED AND

DEBT-RIDDEN FORMER MASTER.

ROLE REVERSAL Portugal21

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Along with its extensive fi nancial re-sources for investing in Portugal, Angola was also considered by the Portuguese as a growing market for their now-strug-gling companies, which were facing tough times as the domestic economy shrank along with their traditional ex-port markets in neighboring countries.

Making Angola even more attractive was the fact that Portugal and its former colony shared a common language, cul-ture and legal framework, as well as fi -nancing structures.

Portuguese banks had already been long established in Angola, led by Ban-co Espírito Santo, the country’s biggest bank by market capitalization and the second-largest private bank, and which set up operations there in 2001 as Banco Espiritu Santo Angola (BESA).

The Banco Espiritu Santo story illus-trates how the problems of Portuguese companies can spill over into their An-golan units. In August, after Portugal announced a $4.9 billion bailout of the ailing Banco Espiritu Santo, Angolan

authorities placed BESA under admin-istration and revoked a $5.9 billion loan guarantee issued previously.

Portuguese companies involved in everything from construction to con-sumer goods and from electronics to health care ooded into Angola. They were aided by the government’s eager-ness to enlist foreign companies in its development plans, aimed at turning the country into a regional, and eventually, an international player and diversify the economy away from oil and mining.

Angolan offi cials are also keen to provide jobs, housing, health care, clean water, reliable electricity and other ben-

efi ts for the country’s 20 million people.Eventually, 10,000 Portuguese com-

panies were trading with Angola and tens of thousands of Portuguese execu-tives, managers, technicians and other workers had moved south, many eeing their homeland’s high unemployment rate, which at the height of the crisis hit a painful 17 percent.

Illustrating just how deep historical ties are, many of the Portuguese packing their bags for Africa were born or raised in Angola before their families ed back home during the decades-long struggle for independence and subsequent civil war which devastated the country.

Today, almost 40% of the foreign companies operating in Angola are of Portuguese origin.

By 2012, Angola had become Portu-gal’s fourth-largest export market after European Union partners Spain, Germa-ny and France. That year 3 billion Euros ($4 billion) worth of Portuguese prod-ucts were sold to Angola, accounting for 7 percent of total exports.

TODAY, ALMOST 40%

OF THE FOREIGN COM-

PANIES OPERATING IN

ANGOLA ARE OF PORTU-

GUESE ORIGIN.

($4 billion) worth of Portuguese prod-ucts were sold to Angola, accounting for 7 percent of total exports.

A bridge to Lisbon: Angola´s investments in major companies on the Lisbon Stock Exchange strengthened the economic links between the two countries.

Portugal ROLE REVERSAL 22


As Portuguese investments and businesses grew in their home country, Angolan investors were quick to return the complement. Between 2002 and 2009, Angolan public and private invest-ment in Portugal skyrocketed from 1.6 million Euros ($2 million) to 116 million Euros ($ 157 million).

According to one leading Portuguese think tank, by 2012 Angolan investors owned around 3.8 percent of companies listed on the Lisbon stock exchange in a wide array of sectors including telecoms, energy, media, agribusiness, construc-tion and banks.

Total Angolan investment is now estimated to have reached between 10 billion Euros ($13.6 billion) and 15 bil-lion Euros ($20.4 billion). Further in-vestment is expected as the government puts state companies and assets on the block as part of the program to put the economy back on course.

Hailing these new economic ties as the base for a “strategic partnership” that would deeply benefit both countries, Angolan and Portuguese leaders cooper-ated closely on fostering relations while urging their country’s entrepreneurs to continue their bilateral investing.

Indeed, one of Angola’s main in-vestors is Isabel dos Santos, the British-educated eldest daughter of President José Eduardo dos Santos. Forbes maga-zine describes her as Africa’s wealthi-est woman and the continent’s first fe-male billionaire.

Over the last several years, she has purchased more than 50 per cent of the Zon multimedia and telecoms conglom-erate; a large stake in Banco Portugues de Investimento, or BPI, the country’s fourth-largest private financial group and shares in Amorim Energia, a Neth-erlands-based Portuguese company which owns 40 percent of petroleum producer Galp.

These holdings make Ms. dos Santos the third-richest investor in the Lisbon stock exchange with a personal fortune estimated at around $3 billion. Isabel dos

Santos also sits on the board of Banco BIC Portugal, a subsidiary of one of Angola’s biggest banks and she has extensive in-terests in many Angolan companies, in-cluding Unitel, one of the country’s two mobile telephone operators.

Angolan company Newshold, which owns stakes in several promi-nent Portuguese media companies, including Impresa, Cofina, the weekly newspaper Sol, two leading magazines, business publication Jornal de Nego-cios and other titles.

On a visit several years ago to An-gola, Portuguese Prime Minister Pedro Passos Coelho, who spent part of his childhood there, said : “Angolan capital is very welcome (in Portugal).”

And while that is no doubt the case among government and business lead-ers, some in Portugal are not so enthu-siastic, questioning whether it is a good idea for their country to partner with An-gola because of its reputation for alleged corruption and crony capitalism.

The International Monetary Fund has reported that there is $32 billion in missing government funds believed linked to Sonangol, and Transparency International rates Angola as one of the most corrupt countries in the world, ranking it in 153rd position out of 175 for its lack of transparency.

As charges like these mounted, Por-tuguese chief public prosecutor Joana Vidal began a probe into the activities of a number of unidentified and highly-placed Angolan business and political leaders. Apparently alarmed that the in-vestigations might torpedo Angolan in-vestments, Portuguese Foreign Minister Rui Machete appeared on Angolan radio to apologize for the prosecutor’s actions.

But when opposition politicians howled for Machete’s resignation, claim-ing he had infringed on the judiciary’s independence, the foreign minister took back his apology and recanted. Ma-chete’s backtracking unleashed an angry response from President Dos Santos.

While Angola had good relations

with most major countries in the world, the president said in his annual state of the nation address to parliament in Oc-tober 2013, “with Portugal, unfortunately things are not going as well. There have been misunderstandings at the highest level of state and the current political climate does not advise the implementa-tion of the strategic partnership.”

“In the battle against corruption,” dos Santos continued, “the anti-cor-ruption organizations in the West are deliberately creating misunderstand-ings in order to intimidate Africans who are generating wealth and who want access to it.

“They are creating the general im-pression that a rich African is invari-ably a corrupt one,” he said. “Elemen-tary research in the oil sector would expose that American, English and French firms, along with ortuguese companies and commercial banks are extracting from Angola double digit billion dollar sums.

“Why should they be allowed to own such huge corporate firms that are denied to us Angolans?” dos San-tos concluded.

Shortly after his speech, the govern-ment-controlled newspaper, the Journal of Angola, weighed into the fray, chastis-ing Portugal for what it termed as “intol-erable aggression.”

The ap prompted ortuguese parliamentarians to rush to Luanda to try and make amends.

Portugal’s economy now appears to be on the mend after bottoming out. In May, 2014, the country passed all the re-views by the architects of its bailout im-posed three years earlier, the European Commission, the European Central Bank and the International Monetary Fund.

“Everybody in the government shares with all Portuguese a feeling of mission accomplished,” Deputy Prime Minister Paulo Portas said at a news conference announcing the favorable reviews.

With Portugal apparently on its way to financial health, it will almost certainly continue to be a tempting destination for Angolan investment and with so much shared history and so many billions of dollars at stake, the ex-colony and its former master will likely patch things up to restore their strategic partnership.

BY 2012, ANGOLAN INVESTORS OWNED AROUND 3.8 PERCENT

OF THE COMPANIES LISTED ON THE LISBON STOCK EXCHANGE,

IN A WIDE ARRAY OF SECTORS INCLUDING TELECOMS, ENERGY,

MEDIA, AGRIBUSINESS, CONSTRUCTION AND BANKS.

A bridge to Lisbon: Angola´s investments in major companies on the Lisbon Stock Exchange strengthened the economic links between the two countries.

ROLE REVERSAL Portugal23


Oil has long been the foundation of Angola’s economy, having at-tracted massive foreign investment and driven economic growth over the past decade. But with known reserves of Africa’s second-largest oil producer expected to reach their peak by the end of the decade, Angola has embarked on a new energy adventure: the natural gas revolution.

State-owned Sonangol has joined the oil majors Chevron, To-tal and – the ones responsible for developing the offshore fi elds and deepwater fi elds at the heart of the country’s oil boom – to form Angola N iquefi ed Natural as , a project that will allow the country to develop its energy industry in an environmentally-friend-ly fashion, while providing the revenues the government needs to help diversify the economy.

Despite ranking second in sub-Saharan Africa in total natural gas reserves – . trillion cubic feet Tcf according to the latest il

and Gas Journal estimates – Angola has always remained a small natural gas producer. However, the $10 billion Angola LNG project will change all that, marking a shift in the country’s oil and gas dy-namic that re ects the new trends in the global energy market.

Launched in 2008, Angola LNG is headed by Chevron, which owns a 36.4 percent stake, with state-owned Sonangol holding a 22.8 percent stake and France’s Total, BP and Italy’s ENI completing the consortium. While the initial target was to start exporting LNG by early 2012, after 18 months of delays due to technical glitches and labor shortages, the project fi nally shipped its fi rst cargo to razil last une.

First gas export at Angola N is an important milestone in support of our strategic plan to grow our production,” George Kirk-land, vice chairman of California-based Chevron, said in a statement at the time. This project will commercialize natural gas resources

A STOP-AND-STARTREVOLUTION IN NATURAL GAS

n partnership ith ma or international oil companies, state-o ned Sonangol has made a fi rm commitment to developing i uefi ed atural as . Although ve ed b technical dela s and interruptions, the Angola pro ect still looks to be the future of the countr s most im-portant industr . ean hile, e ploration continues for vast ne reserves of crude to offset the declining output in e isting oilfi elds.

IN TERMS OF CONSTRUCTION JOBS, REBUILDING AN ENTIRE COUNTRY IS ABOUT AS BIG AS THEY COME.

By Aled Bryon

Angola OIL & GAS 2424

24-29 OIL & GAS-ok 8x10,5.indd 24 14/11/14 15:19

in western Africa to meet growing demand in the region and internationally.”

However, in April 2014 the plant was once again shut down to allow its US con-tactor Bechtel to perform repairs after a succession of technical faults. Plant of-fi cials have said that production will not commence again until mid-2015, meaning LNG capacity likely won’t be reached for quite some time to come. The LNG facility in Soyo – just outside the capital city of Lu-anda – has an expected lifespan of at least 30 years, with the capacity to produce 5.2 million metric tons of LNG per year.

Just as the United States hopes to be-

come a net exporter of LNG through its shale gas production in the next two years, Angola likewise wants to take advantage of the growing rush for the resource. Ac-cording to analysts at Ernst & Young, glob-al LNG demand has risen by an estimated 7.6% per year since 2000, and will contin-ue to increase at a rapid rate of 15 million metric tons a year through to the middle of next decade, led by growth in Asian na-

tions such as Japan and South Korea.For Chevron – which has also invest-

ed $77 billion on LNG production in Aus-tralia – such increasing demand is a huge opportunity that it aims to tap through the Angola project, just as other oil ma-jors continue to invest in LNG around the world. For Angola, which seeks to diversify its economy from its oil exports – LNG provides part of the solution.

AS T U AT A -AS C , A ATTRACT AS-

S R ST T A R C -C R T R T AST CA .

ANGOLAOIL & GAS

OIL & GAS Angola2525

24-29 OIL & GAS-ok 8x10,5.indd 25 14/11/14 15:19

Following the first shipment of N last year, in 20 the group confirmed the sale of three more cargos from the Soyo plant, said to be one of the world’s most modern LNG processing facilities.

In the meantime, construction work will continue on the in-frastructure project to transport natural gas gathered from offshore to a liquefaction plant, which at full capacity, will produce an addi-tional 3,000 barrels of natural gas liquids propane and butane per day for export. Complementing the export terminal, Sonagas – the subsidiary of Sonangol that is moving aggressively to develop the country’s domestic production facilities and export markets – plans to construct a massive industrial park in Soyo. The industrial park will receive 125 million cubic feet per day of imported gas, which the companies installed there will then use to supply electricity, produce petrochemicals, and develop other downstream gas industries.

When fully functioning, the Angola LNG project will also give an opportunity to continue the development of Angola´s oil and gas resources with less impact on the environment - providing cleaner and more reliable energy to domestic and international customers, along with good returns on the investments of its shareholders.

Primarily, Angola LNG will be fed by associated gas – a sub-stance produced with crude oil production that is usually ared as waste or re-injected into petroleum reservoirs. Instead, this

gas will now be used either domestically, or liquefied and ex-ported to other markets.

As one of the world’s largest gas aring reduction projects – encompassing offshore and onshore operations to turn the previ-ously ared gas into more productive uses – Angola N will re-duce carbon dioxide emissions by up to nine million tons a year equivalent to taking around two million cars off the road . This

will reduce greenhouse gas emissions while promoting the use of natural gas, a much cleaner source of energy.

As climate change takes on ever greater importance – with most companies, and indeed countries, looking for an opportunity

to increase energy efficiency and curb pollution – Angola N is a standout achievement in reducing CO2 emissions.

In a recent World Bank Report, Bjorn Hamso – manager of the organization’s lobal as Flaring eduction artnership, gave high praise for the project, saying: “Angola LNG marks a milestone for

aring reduction and shows that when partners work together, it is possible to develop major projects with minimum impact on the environment. These are impressive efforts and results that should inspire others around the world.”

Going forward, a “large number” of LNG sales from the plant in Soyo have already been signed, according to Angola LNG Mar-keting CEO Artur Pereira. Despite the fact that a portion of these deals will now have to wait until production resumes next year, if Angola LNG can further prevent the kind of technical issues that has slowed production since 2008, the future for the project – and the hope that it can make a real and lasting impact for the sustain-able development of the country – looks bright.

While LNG exports are temporarily interrupted, Sonangol continues to explore for new oil reserves to offset the decline in ex-isting oilfields. The state oil company has targeted a crude oil pro-duction rate of 2 million barrels per day in 2015, up from last year’s 1.71 million bpd. Industry analysts are skeptical as to whether that goal will be reached; Angola’s crude output has averaged 1.65 mil-lion bpd during the first half of 20 , due to declining output at ex-isting wells and extended maintenance issues.

Production is expected to recover, however, as new discov-eries come on line. France´s Total in June started production at its C offshore field, located 0 kms west of uanda, which has expected daily output of 160,000 bpd and proven reserves of 500 million barrels. Total, the largest foreign operator in Ango-la, has also decided to move head with the $16 billion Kaombo deepwater project, which could add another 230,000 bpd to the country´s output by 2017.

A A AR S A ST R AR R UCT A S S T AT ART RS R T T R, T S SS T A R R -

CTS T U ACT T R T. T S AR R SS RTS A R SU TS T AT S U S R T RS AR U T R .

- orld ank report


24-29 OIL & GAS-ok 8x10,5.indd 26 14/11/14 15:20

27_Angola_TheWF-mota engil.indd 1 11/14/14 12:58 PM

Exploration activity in pre-salt formations is also slated to accelerate this year, with the government planning to auction off 10 onshore blocks. Pre-salt refers to the geological layers that were laid down before a salt layer accumulated above them during the breaking up of the supercontinents over 180 million years ago. It has been responsible for hugely signifi -cant fi nds in razil, where total reserves of around 50 billion barrels of oil are estimated. Due to its geographic similarities, explained by the scientifi c theory of plate tectonics and conti-nental drift, Angola is also believed to hold large quantities of hydrocarbon resources from pre-salt formations.

According to the U.S. Energy Information Agency, many oil majors invested in Angola are currently or planning ex-ploration activity in pre-salt bearing blocks. So far, U.S.-based Cobalt International Energy has had the most success, making fi ve pre-salt discoveries in the offshore wanza asin.

What’s more, the ten onshore areas to go up for auction this year may offer more crude oil than previously thought, ac-cording to a surveying company that assessed the deposits in January. Norway’s Petroleum Geo-Services ASA said that “new

seismic images show more potential” than a previous survey showed 40 years ago, assuring that the sediments observed correspond to formations of hydrocarbons. It is now believed the ten blocks may account for over half of Angola’s known oil reserves, or at least 7 billion barrels.

Opportunities to explore Angola’s lucrative pre-salt for-mations will not end there, either. Sonangol has recently an-nounced that the company is planning a second auction for fi ve offshore blocks, four of which are in the wanza basin and the other in the Congo basin.

These fi ve blocks will be auctioned off in two and half to four years’ time, and in the meantime will be the focus of geophysical or geological surveying by Sonangol.

The true extent of Angola’s potentially massive oil re-sources is not likely to be known for some years to come. However, if Angola’s pre-salt discoveries prove to be any-thing as fruitful as razil’s across the Atlantic, and Angola LNG continues to develop as expected, the country’s oil and gas industry will be an increasingly important player in the world energy market.

ANGOLAOIL & GAS

Bauxite Angola brings Angolan expertise in mining to Guinea-Bissau. Created in 2007 to explore and extract bauxite deposits, we are also currently building a port which will help connect Guinea-Bissau with other countries in the region and beyond. Furthermore, we work to bring a better quality of life to the communities in which we operate. www.bauxiteangola.com

A new reference in Africa

THE TRUE EXTENT OF ANGOLA’S POTENTIALLY MASSIVEHYDROCARBONS RESOURCES MAY NOT BE KNOWN FOR YEARS TO COME.


24-29 OIL & GAS-ok 8x10,5.indd 28 14/11/14 15:22

While Angola’s oil resources have been almost solely responsible for the country’s robust growth in recent times, critics say that little of the resulting revenue has fi ltered down to make a lasting positive impact on ordinary Angolans.

With the introduction of a new Sovereign Wealth Fund (SWF), the government is now promising to put the oil wealth to work towards the goal of generating wealth for all Angolans, by promoting more inclusive socio-economic development.

The Fundo Soberano de Angola (FSDEA) – the brainchild of Presi-dent José Eduardo dos Santos – was established in 2012 to promote greater national growth and prosperity by investing Angola’s oil income in different industries, across domestic, regional and global markets. In doing so, it is hoped that these investments will generate long-term and sustainable fi nancial returns, improve the country’s infrastructure and create opportunities for Angolan citizens.

Headquartered in uanda, the fund has an initial endowment of $5 billion – half of which has been allocated to projects in Angola, as well as other African countries. While investments in Angola will eventually focus on a diverse set of non-oil sectors such as agriculture, mining, and real estate, the FSDEA is initially concentrating on hotels and commer-cial infrastructure in the whole of Sub-Saharan Africa.

“We are focusing on investments which are sustainable in terms of their long term returns and we also are focusing on the social and eco-nomic well being of the people in Angola and in the regions. That is where we see the potential of African institutions and countries growing and going forward,” the Fund´s Chairman, José Filomeno dos Santos, the son of President dos Santos, said in a recent interview.

Considering the region’s growth potential – with its huge mineral reserves helping it to become a commodity hub – the FSDEA expects demand for hotels to be particularly high among international busi-ness travelers, thus offering the high probability of a good return on its planned investment in 50 properties over the next three years.

The added rationale in creating this dedicated Hotel Fund is that the hospitality sector holds substantial potential for job and wealth creation and stimulates a local supply chain that positively impacts the region’s local economies.

For Angola specifi cally, these types of investments will hopefully play a critical role in development of the country’s human capital, help-ing to build the foundations that are essential to improving the living conditions of its people.

Meanwhile, the FSDEA is also currently setting up a separate infra-structure fund for Sub-Saharan Africa that will participate in projects in-cluding ports, airports and power plants. oth the hotel and infrastruc-ture funds are expected to become operational in the coming months, with some possible projects already identifi ed.

The remaining half of the FSD A’s initial $5-billion endowment is intended to be reserved for capital preservation, meaning that it will be invested in interest-bearing assets such as sovereign and corporate bonds, as well as invested in stocks in developed economies that have highly regulated markets, such as the G7 countries. In the long term, investments in high risk- high return frontier markets outside of Africa will also be considered.

For the time being though, the FSDEA will have a lot of work to do to before it can convince its own citi-zens of the Sovereign Wealth Fund’s true worth in terms of achieving com-prehensive social progress. Until now, much of the population has been left aggrieved that the country’s oil money failed to bring real development to those who need it most, with large portions of wealth apparently siphoned off by corruption.

The FSDEA has already come in for criticism because its chairman is the son of the country’s president. Some argue that the appointment immedi-ately sapped the fund’s credibility. José Filomeno dos Santos says his studies in fi nance and experience in founding and running an investment bank qualify him for the job.

While Angolans will have to wait and see what kind of genuine impact the fund will deliver, they will likely be encouraged by the success of SWFs in other resource-rich African countries. For example, otswana’s ula Fund – established in 1994 – is fed with in-come from exports of minerals and dia-monds, and its value has increased sub-stantially over the course of the last two decades through investments in foreign currency. This has helped lay a foun-dation for a future when its resource revenues may eventually run dry.

A SOVEREIGN FUND FOR SUSTAINABLE GROWTH

ness travelers, thus offering the high probability of a good return on its planned investment in 50 properties over the next three years.

The added rationale in creating this dedicated Hotel Fund is that the hospitality sector holds substantial potential for job and wealth creation and stimulates a local supply chain that positively impacts the region’s

For Angola specifi cally, these types of investments will hopefully play a critical role in development of the country’s human capital, help-ing to build the foundations that are essential to improving the living

Meanwhile, the FSDEA is also currently setting up a separate infra-structure fund for Sub-Saharan Africa that will participate in projects in-cluding ports, airports and power plants. oth the hotel and infrastruc-ture funds are expected to become operational in the coming months, with some possible projects already identifi ed.

The remaining half of the FSD A’s initial $5-billion endowment is intended to be reserved for capital preservation, meaning that it will be invested in interest-bearing assets such as sovereign and corporate bonds, as well as invested in stocks in developed economies that have highly regulated markets, such as the G7 countries. In the long term, investments in high risk- high return frontier markets outside of Africa

stantially over the course of the last two decades through investments in foreign currency. This has helped lay a foun-dation for a future when its resource revenues may eventually run dry.

OIL & GAS Angola2929

24-29 OIL & GAS-ok 8x10,5.indd 29 14/11/14 15:22

30Interview OIL&GAS

INTERVIEWwithJOSÉ MARÍA BOTELHO DE VASCONCELOS,

MINISTER OF PETROLEUM

WF: Angola’s economy registered average growth rates of 10.5% between 2001 and 2010. How do you assess the country’s cu-rrent climate of economic development and what are its prospects as a regional power?Judging by the indicators obtained prior to 2010, there is a clearly visible image of an economy that is on the rise. We should take into account the reality of the international economic and fi nancial crisis of recent years, but the truth is that Angola has been maintaining a positive level of growth, currently above 3%.

As you must know, oil has been the catalyst for our development, and we will continue to work in that di-rection with objectives and programs implemented by the government. Our economy should not be permanently held hostage to oil sector revenues, and so we must take advantage of the-se (other) resources to re-launch our economy.

If we look at the macroeconomic indicators, we can see that Angola, in terms of exports, maintains practica-lly the same levels that we had before. That is, 98% of our exports consist of oil and diamonds, although there are other mineral resources that are starting to be integrated into the revenue mix.

In terms of revenues, we also had a decline from 75% to 70% (of the to-tal) in the tax revenues that originate

from oil. In another extremely im-portant indicator, GDP, (oil) used to comprise 60% and today it represents about 43%....

We are a country with about 20 million inhabitants and we need to provide the people with the conditions required to reduce the differences between the various social strata of Angolan society. This translates into reducing poverty as much as possible. International institutions, connected to UN itself, have been making posi-tive assessments of the levels of hu-man development in Angola. Just to give you an idea, the level of poverty, which used to be at around 70%, is now down to 36%.

WF: Following the 20th anniversary (in 2013) of diplomatic relations between the USA and Angola, what would you say is the importance for Angola of having the Uni-ted States as a partner?BV: We have a very positive relation-ship, because we always maintained cooperation with regard to energy. I mean, our greatest partners have been American companies, such as Exxon, Chevron, Halliburton, among other service providers from the sector. I can say that it is a relationship in which the dialogue has owed very well.

WF: In a sector in which there are major international players, what would be the policies to facilitate allowing local com-panies to enter the sector?BV: We already have some local compa-nies participating in this industry, but as you must know, most of our activity is developed offshore. Nevertheless, we are starting a bidding process for some onshore concessions, where the policy that we defi ned is to promote the inte-gration of more local companies, which may overcome their defi ciencies by establishing partnerships with foreign companies with the required technical knowhow and fi nancial resources.

In terms of the provision of ser-vices, there is a whole process being implemented, in which some local providers are already present in the oil industry, involved to a degree based on the complexity of each of them. As I mentioned above, given the comple-xity of this sector, there are only three or four national companies that are in fact operating (Somoil, Crete, Falcon and Initial Oil).

WF: You recently said that the Angola LNG project signals a new stage for the hydro-carbons industry in Angola. How do you foresee the development of that industry and how is the project coming along?

Petroleum will continue to dominate Angola’s economy for the foreseeable future. But as Petro-

leum Minister José María Botelhos de Vasconcelos points out in this interview, Angola’s dependence on oil has been reduced in re-cent years, as other industries contribute more to tax revenues and to overall economic growth.

INTERVIEW

30-31 min of petroleo 8x10,5.indd 30 14/11/14 15:40

31 OIL&GAS Interview

INTERVIEWJOSÉ MARÍA BOTELHO DE VASCONCELOS, MINISTER OF PETROLEUM

BV: We all know that, when it was conceived, the Angola LNG project had the USA as its target market. But with the current reality, after the discovery of non-conventional gas three years ago, the American market is no longer as attractive.

With regard to the project’s evo-lution, it is still moving forward and, as you know, there are regions in the world with greater need for gas than others, as is the case of Europe and Asia. At the moment, this is the target market for Angola’s natural gas. This is the project’s fi rst stage of develop-ment and there will be a second stage, in which we will take advantage of this resource for the production of some pe-trochemical products.

WF: With regard to the introduction of the New Law on Foreign Exchange Poli-cy, how was it received by the industry in Angola?BV: I am certain that its implementa-tion has been positive and there is, in fact, full compliance by the operating companies. But as you know, any new law sometimes causes concerns. Ne-vertheless, as I said, the implementa-tion itself has been good and made in-crementally. We established 24 months for its effective implementation until October (of 2013). In short, it is a pro-cess that is ongoing, safely and soun-dly, although there were some small negative reactions at the beginning, but overall, it has been developing in a very positive manner.

WF: In your opinion, what makes Angola one of the most competitive countries for the oil and gas business, when compared to other countries in the continent?BV: Fundamentally, I think that it co-mes down to the instruments and me-chanisms used in contractual relations in Angola that attract investments to the country. In this regard, we can mention our tradition in the oil indus-try, because we have always rigorously honored our contractual relations with our partners, which gives us conditions that maybe other countries do not have. Our Law on Private Investment is very well adapted to the reality of the coun-try and contributes toward the great at-tractiveness that we have always had, since far back in time.

“OUR ECONOMY SHOULD NOT BE PERMANENTLY HELD HOSTAGE TO OIL

SECTOR REVENUES, AND SO WE MUST TAKE ADVAN-TAGE OF THESE (OTHER)

RESOURCES TO RE-LAUNCH OUR ECONOMY.”

30-31 min of petroleo 8x10,5.indd 31 14/11/14 15:40

32Angola U.S-CHINA RIVALRY

‘BATTLE FOR AFRICA’

COMES TO THE FORE IN ANGOLA

U.S.-CHINA

The U.S. government and American companies are eager to make up the ground lost to China in Africa during recent years. Angola has become a key battleground in this struggle for economic infl uence on the continent.

Given China’s insatiable thirst for Africa’s natural resources over the past decade, it came as no surprise in 2009 when the Asian giant overtook the United States as Africa’s lead-ing trading partner. Total trade between China and Africa stood at around $200 billion in 2012, nearly double the $109 billion between the U.S. and the continent during the same period. On a trip to Africa ear-lier this year – which included a stop-off in Angola – Chinese Premier Li Keqiang said he ex-pects Sino-African trade to double in the next six years.

The investment landscape has also changed drastically. While the United States, the United Kingdom and France still hold the largest share of investments in Africa, China’s stake in the continent is growing signifi cantly, particularly in energy and infrastructure. State-owned and private Chinese companies have become major investors, spending nearly $100 billion in projects in Africa over the last decade.

The U.S. government and businesses are now pushing to make up the ground lost to China in Africa in recent years and to regain their dominant position. Last year, many media reports pointed to arack bama’s fi rst offi cial visit to the continent as a clear signal of this intent, as was his deci-

sion to hold the fi rst African Leaders Summit in Washing-ton in August, 2014. This push has sparked what has been dubbed the “battle for Africa” between the world’s two larg-est economies – and Angola has become one of the major battlefi elds.

The changing trade and investment landscape in An-gola re ects that of Africa as a whole. China is now Angola’s largest commercial partner;

bilateral trade reached $37.5 billion last year, according to fi gures from the Chinese embassy. With large investments in infrastructure and energy, Angola has become the number one destination for Chinese investment in Africa.

The total value of trade between the U.S. and Angola was $10.2 billion in 2013 , making it Angola’s second largest commercial partner – overtaking the former colonial master Portugal – mainly due to oil imports. Between 2003 and 2011, the United States invested close to $25 billion in Angola, ac-cording to a report by consultants Ernst & Young; the largest part of this investment has come from oil and gas companies such as ExxonMobil and Chevron.

The US-China battle for in uence in Angola came to the fore earlier this year when in May, U.S. Secretary of State

A U.S.-manufactured Boeing 777 aircraft purchased by Angola´s national airline TAAG, it fi a ci g fro t e ort- ort a

By Jonathan Meaney

32-35 Angola US Relations 2 8x10,5.indd 32 14/11/14 16:02

John Kerry and Chinese prime minis-ter Li Keqiang touched down in Luan-da within just a few days of each other. Both were eager to discuss expanding commercial ties with President José Eduardo dos Santos, who sees the two countries as strategic partners, along with Brazil and Portugal.

With the emergence of the shale gas industry in the U.S., demand for Angolan oil will continue to fall at a time when China takes more than 40% of Angola’s petroleum and gas exports. Kerry wants to see commercial ties move beyond oil and gas. A renewed and modernized African Growth and Opportunity Act – which has facilitated the significant increase in trade ties with Sub-Saharan Africa since its es-tablishment 2000 – could help to make this happen.

“Angola’s economy has expe-rienced, and continues to enjoy, a remarkable amount of economic growth,” Kerry said during his visit in May. “We talked about increased pos-sibilities of cooperation in agriculture, in technology, in energy diversity, and also in infrastructure.”

The Secretary of State commented that his trip was also an opportunity to repair diplomatic ties, damaged as re-sult of a number of cancelled meetings, Obama’s decision not to visit the coun-try on his African tour in 2013, and the U.S.’s historic support for rebel leader Jonas Savimbi, whose death in 2002 led to the end of the Angolan civil war. While support for Savimbi had come mainly from the conservatives (Ronald Reagan invited Savimbi to the White House in 1987 and hailed him a “free-dom fighter , it was resident eorge W. ush who first invited resident Dos Santos to Washington in 2002 following Savimbi’s death. At the meeting, both leaders agreed to put political differ-ences aside to advance commercial ties.

Relations were further strengthened in 2009 when then Secretary of State Hil-ary Clinton made a working visit to Lu-anda, where she announced that Angola was one of America’s strategic partners in Sub-Saharan Africa. This led to the signing of a strategic partnership agree-

ment in 2010, which paved the way to-wards deeper commercial and diplomat-ic ties, as well as expanded cooperation in agriculture and the strengthening of democratic institutions.

Apart from trade and investment, China’s financial institutions have pro-vided loans worth $14.5 billion since 2002. Now the United States is keen to get in on the act. This year alone, the U.S. xport-Import x-Im ank has recently signed two major loan deals worth $1.7 billion – American money which will be used to finance deals with American companies.

The first loan, for $600 million, will finance the acquisition of three Boeing aircraft for Angola’s national carrier, TAAG. The second, for $1.1 billion, will pay for purchases from

eneral lectric of locomotives and of electrical power equipment.(The latter is part of Obama’s Pow-er Africa initiative, announced last year, which will invest $7 billion to increase access to electricity in Sub-Saharan Africa .

“U.S. exporters are eager to real-ize the tremendous opportunities in this region, and the bank is helping them create and sustain American jobs by increasing their exports to Africa,” declared CEO of Ex-Im Bank Fred Ho-chberg during his three-day visit to An-gola in June.

edro odinho Domingos, xecu-tive Director of the U.S-Angola Cham-ber of Commerce, has said that he would like to see more U.S. financial institutions enter Angola. “We are try-ing to invite American banks into the market. We want to create links with big financial institutions like ank of America, Citibank and JP Morgan. We had a meeting with the gover-nor of the central bank; he said that they are open to it, and the US banks would be welcome,” he explained in an interview with The Worldfolio.

33 U.S-CHINA RIVALRY Angola

THE U.S. GOVERN-MENT AND BUSINESS-ES ARE NOW PUSH-ING TO MAKE UP THE GROUND LOST TO CHINA IN AFRICA IN RECENT YEARS AND TO REGAIN THEIR DOMINANT POSITION

ecretar of tate o err a resses or ers at a e eral lectric facilit i ua a i a


The Mining Society of Catoca Lda is a prospecting, exploration and diamond

trading company. Founded in 1995, it has a firm commitment to sustainable

enterprise. Activities range from investing in the professional development of its

members, ensuring strict environmental procedures are adhered to, and helping

the community in terms of education, health, culture and entrepreneurship.

APPLYING WEALTHTO SUSTAINABLE DEVELOPMENT

www.catoca.com

Catoca 210x275 2.indd 1 11/14/14 11:47 AM

The loans provided by Ex-Im Bank for power and transport infrastructure are part of a growing trend of U.S. invest-ments outside of oil and gas. “There are an increasing variety of companies com-ing in,” U.S. Charges d’Affairs to Angola Heather Merritt said. “For those able to overcome some of the barriers to entry and the costs of doing business here, it has been a very rewarding market. That

is why you see GE here, as well as John Deere Dealership, and that is why Mi-crosoft has opened an offi ce here.

“We are looking at ways for U.S. companies and the U.S. government to continue to support Angola’s energy development – not just oil and gas, but distribution and generation and differ-ent ways we can get involved, as well as new technologies. There is defi nite-ly room here for hydro and solar, and wind,” she said.

Ms. Merritt also highlighted that the U.S.’s involvement in Angola goes far beyond commercial interests. The work of U.S. Agency for International Development (USAID) and the social responsibility initiatives of U.S. corpo-rations like ExxonMobil have focused on the fi ght against AIDS and malaria, through programs such as the Presi-dent’s Malaria Initiative. USAID has also contributed to education development and the strengthening of local gover-nance by helping municipal govern-ments’ budgeting processes.

The U.S. has played an instru-mental role in the post-war clean-up, particularly in the area of demining. “We have been doing this for around twenty years and we have spent billions in Angola helping clear out the rem-nants of war. This year we are spend-ing about 6 million, and we are working with three NGO partners,” Ms. Merritt told The Worldfolio.

Despite the claims of that the U.S. has a “lack of strategy” in Africa, the Charge d’Affairs argues that President Obama’s Power Africa Initiative, his trip to Africa last year, and his decision to host the fi rst African Leaders Summit in Washington are all evidence of “a very clear, well-articulated strategy for Africa.”

She added Angola is a key part of this policy and that, along with South Africa and Nigeria, is regarded as one of the United States’ three strategic part-ners in Africa.

ANGOLA HAS BECOME

THE NUMBER ONE DES-

TINATION FOR CHINESE

INVESTMENT IN AFRICA,

WITH A SPECIAL FOCUS

ON INFRASTRUCTURE

AND ENERGY.

Angolan Foreign Mininter Georges Chikoti (r.) with U.S. Secretary of State John Kerry during the latter’s visit to Angola in May, 2014.

35 U.S-CHINA RIVALRY Angola


36_Angola_TheWF-CFM.indd 1 11/14/14 1:41 PM

37 Angola BANKING & FINANCE

Angola´s fi nancial sector, like its economy, has seen rapid growth in the past decade, as the number of domestic banks operating in the country jumped from 13 in 2005 to 29 in 2014. Although the ma-jority of assets remain in the hands of a few major banks, foreign investors have begun to seize on the opportunities present.

Since the end of the civil war in 2002, Angola has leveraged its oil and gas reserves to support a recovery that has seen the country develop into sub-Saharan Africa’s third largest econo-my. ne of the industries that has benefi ted most from this ex-pansion is the banking and fi nancial services sector, which has experienced rapid growth on the back of the overall recovery.

However, the concentration of assets in a handful of major banks, scant information about clients and a weak regulatory framework continue to hinder the growth of a sector which is essential to the development of the country´s non-oil economy.

The assets of Angola’s fi nancial sector increased from around $3 billion in 2003 to more than $57 billion in 2011. They jumped further, to over $71 billion in 2013, with depos-its increasing by 8% year-on-year. Government investment in infrastructure projects and regulatory changes to the country’s fi nancial systems have helped some of this growth

and the wider global economic recovery has improved the country’s outlook.

Moody´s Investors Service, which gives a Ba2 rating to Angola´s sovereign debt, in August upgraded the country´s outlook from positive to stable, citing the expansion of the oil and gas sector. However, Moody´s said the key constraints to Angola s progress are a lack of economic diversifi cation and weak institutional strength.”

Serious questions are also being asked about the extent of Angola’s recent fi nancial reforms and their long-term im-pact. However, the potential that the nation presents has al-ready helped its banking sector to become the third-largest in sub-Saharan Africa.

“The banking sector in Angola is growing by 20% a year in terms of the total assets held,” says Alvaro Sobrinho, CEO of Banco Valor Angola. “And it’s not just banking, but a whole fi nancial sector is now appearing, with other key players from asset managers to insurers increasingly fi nding a foothold.

NEW PLAYERS WRESTLE FOR THEIR SHARE OF A FAST-GROWING MARKET By Richard Middleton

ANGOLA’S BANKING BOOM:

37-41 Banking and finance-V5 8x10,5.indd 37 14/11/14 16:28

That growth has seen 29 banks licensed to operate in An-gola today, up from 13 in 2005. However, the bulk of business is done by just five institutions, which continue to exert the majority of control over the expanding sector and in 20 3 rep-resented 72% of total assets, according to a report from global audit firm .

The group is comprised of Banco Angolano de Investi-mentos (BAI), Banco Espirito Santo Angola (BESA), Banco de

oupan a e Cr dito H , anco de Fomento Angola FA and Banco Bic (BIC). Each faces substantial competition from innovative entrants that are keen to profit from the return of steady economic growth to the country.

ne of the top five, SA, was placed under government control in August, shortly after ortugal announced a . bil-lion Euro ($6.58 billion) bailout for the bank’s parent com-pany, Banco Espiritu Santo. The Angolan government, citing BESA’s deteriorating credit portfolio, also revoked a $5.7 bil-lion loan guarantee it had previously extended to the bank. In October, the central bank said that BESA would need an injection of 25.8 billion kwanzas $ .3 billion in order to restore its solvency.

BESA’s problems aside, Angola’s natural resource indus-tries have attracted other foreign banks, including London-listed Standard Chartered, which recently opened a corporate branch in Luanda.

Nigeria-based United Bank for Africa is also seeking a license to operate in Angola. C hillips duoza described the country as “a very interesting market and one that’s grow-ing very rapidly. ther players looking at Angola include or-tugal’s anco I and ussia’s second largest institution, T .

Foreign investors’ confidence in Angola was shaken during

the global financial crisis, when the country’s reliance on oil and gas exports became all too evident. The rapidly growing economy experienced a series of shocks that sent D plum-meting from over 3 per year to 2. between 200 and 2008.

Confidence is returning, however, with infrastructure projects and the rise of privately-financed initiatives helping to support D growth, which is forecast at 3. in 20 and 5. in 20 5, according to the International onetary Fund.

Angola has also been building its international indus-trial relations, not least with ermany. Angola s exports to Europe’s powerhouse economy rose 55% in 2012/13 to 391 million uros. overnment officials and a variety of erman business owners have also visited to explore opportunities.

eorges Chikoti, Angola’s minister of external relations, says strengthened ties will help power further economic expan-sion, and will in turn provide further opportunities for finan-cial and banking service development.

The entry of international banks such as Standard Char-tered is also helping to power wider economic growth in its own right. Angolan insurer NSA holds a 0 stake in the new Standard operation and V. Shankar, the bank´s head of Europe,

iddle ast, Africa and Americas operations, has said the firm will use its international branches in Asia, the Middle East and Africa to help develop relationships with its new Angolan clients.

resident ose duardo dos Santos has also been keen to encourage entrepreneurship, partly via the National Devel-opment lan that kicked off last year and will run until 20 .

“In this period of transition, the nation needs entrepreneurs and strong and efficient private investors to boost the creation of more wealth and employment, Dos Santos has said. The major objective of economic policy for this legislature is to pro-mote the diversification of our economy, in order to make our development process less vulnerable and more sustainable.”

To do this, Angola has been reforming its financial regu-lations to provide more structure and create a more stable macroeconomic environment. In 20 2, a foreign exchange law was enacted that requires the country’s oil companies to pay domestic taxes and settle bills in Angola’s kwanza, bol-stering the currency and boosting profits for some uanda-

The number of banks operating in Angola has nearly doubled in recent years, from 13 in 2005 to 2 at present, helping its finan-cial sector to become the third-largest in sub-Saharan Africa.


THE ANGOLAN C DIT A T HAS N W-IN Y AN A -A F 50

Y A F TH AST FI Y A S,

F CTIN TH A I ITY F AN S T AD N TH I ACH.


based banks. Oil operators must also now pay suppliers in kwanzas and use domestic lenders.

n top of that, the nation’s extensive oil reserves, a sovereign wealth fund and wide-ranging attempts to diversify the economy are all set to help the purchas-ing power of Angolans rise by 5% per annum until 20 , according to the I F.

This growth is helping to expand banking services to the country’s popu-lation. That expansion can be seen through the nation’s ATM system, known as ulticaixa, which has grown exten-sively across the country. edro una, C of interbanking service fi rm mis, has said that he expects the number of ATM transactions to top 30 million each month, up from just 10 million per month in 2010. Over 2.3 million Multic-aixa cards are currently in circulation.

Yet overall banking penetration is still remarkably low at 30%, according to , which predicts that the fi g-ure will double by 2016. As evidence, it cites the growth in the number of bank branches, which rose by .2 in 20 3, with an average of 3 new offi ces open-ing each month. The pace of Angola’s banking and fi nancial service revolution is clear. According to a World ank up-date from last year, the Angolan credit market has been growing by an average of over 50 per year for the past fi ve years, re ecting the ability of banks to broaden their reach. The increase in the number of branches is certainly a fac-tor; however the proliferation of mobile technology could also assist operations.

Africa is the world’s second-most mobile connected region and devel-opments such as the - SA mobile

payment system, which is a joint ven-ture between odafone and enya’s Safaricom, allows payments to be sent from towns to rural villages and could transform Angola’s sporadic and largely Luanda-based banking operations.

Other pan-African initiatives such as Safaricom’s M-Shwari account, which offers a savings account and mi-croloans, could also reap benefi ts in An-gola, where its ability to provide some kind of a credit rating system could as-sist banks’ abilities to provide credit.

itor ibeirinho, partner and head of audit and fi nancial services at Angola, says that the country’s banking sector “continues to present itself as one of the most dynamic sectors” but “one with growing challenges.” In a 20 3 report, ibeirinho said the sector needed to boost its client base to attract

39 BANKING & FINANCE Angola

Images from the Angolan 100-kwanza banknote: President José Eduardo dos Santos (left)

and Antonio Agostinho Neto, the fi rst resi e t - of

gola follo i g i e e e ce from Portugal.



the growing middle classes and expand access to new ser-vices, including insurance products and investment funds, in order to earn commissions and service fees.

Angolan companies have also struggled to fi nd the required fi nancial services to start and expand businesses, particularly with regards to sourcing credit. Small- and medium- sized en-terprises (SME’s) continue to be dogged by the country’s fragile and in some cases non-existent fi nancial infrastructure.

Furthermore, while the country’s more established compa-nies, and foreign-owned entities, can use collateral and relation-ships to access credit, domestic SME’s are left with little alter-native but to seek fi nancing locally. egulatory improvements are being made resulting in new revenue streams for existing fi nancial instiutions in Angola and bolstering S growth.

Among these improvements is the creation of the Fundo Activo de Capital de isco Angolano, a public venture capital fund which provides fi nancing and management advice for SME’s, particularly startups with innovative projects (See the interview following this article).

Acoording to 20 report from the World ank, The government has made substantial progress in establishing the necessary conditions for the fi nancial sector to thrive, but critical challenges remain.”

Angolan fi rms now enjoy greatly expanded access to the fi nancial system, but the system is not yet capable of evaluat-ing them accurately on their merits as borrowers. Continu-ing strengthening of its institutions and regulatory framework would support a diverse, effi cient and competitive fi nancial sector, which will be a vital asset to Angola’s continued growth and development.”

To Angola’s credit, a variety of reforms have already been introduced with the intention of creating a more transparent and effective fi nancial services industry. In 20 2, the Comit de stabilidade Financeira C F was launched to evalu-ate the main growth indicators of Angola’s fi nancial system, including profi tability, liquidity and solvency, and to assess

how future policies could improve the sector. By the end of 20 , new regulations will be introduced to ensure all banks face stricter reporting and risk-management standards.

As part of the reforms, the central bank´s Base Interest ate and the uanda interbank offered rate uibor , were cre-

ated in 2012. Meanwhile, Angola’s Capital Markets Commis-sion (CMC), set up in 2005, continues to work on developing a stock exchange, which has been subject to numerous delays.

The uanda Stock xchange is now set to launch in 20 . A secondary debt market is slated to start operating in late 20 as a precursor to the exchange, and a private corporate debt market is also being planned. The government’s ability to push through these measures will be vital to securing longer-term fi nancial stability and expanding the fi nancial services market.

Angola’s central bank has also recently shown its willing-ness to use interest rates to boost investment. After in ation fell to an historical low of . in une, the NA lowered the benchmark interest by half a percentage point to 8.75%. It was the fi fth such cut such cut since the bank s onetary

olicy Committee was created in ctober, 20 . As the banking sector grows, ibeirinho, of An-

gola, says increased international exposure will also create a “set of additional challenges related to corporate governance, risk management and compliance, not to mention continued business innovation and cost base optimization.

n the other hand, ibeirinho adds, the fi nancial insti-tutions will likely continue to focus on innovation, quality of service rendered to the customer, as well as the exploitation and development of business opportunities arising as a result of the new legislation in force, such as, for example, those related to the tax system reform, the foreign exchange law or the capital markets (primary and secondary).”

All this points to an expanding sector and, with the be-ginnings of a more sophisticated regulatory framework, even greater potential for new entrants. Technological advance-ments such as mobile banking remain relatively undeveloped in Angola, meaning large sectors of the population still do not have access modern credit and deposit accounts.

While Angola’s fi nancial services sector undoubtedly holds opportunities, the limitations around the country’s reg-ulatory systems and the diffi culty of imposing suitable credit checks will continue to affect the industry’s growth. These are not simple reforms and will require an even greater will to implement than the substantial changes that have been af-fected to date.

# Financial Institution 2013 2012

1 BESA Banco Espírito Santo Angola 1.107.13 1.007.218

2 BAI Banco Angolano de Investimentos 1.039.693 1.033.428

3 BPC Banco de Poupança e Crédito 988.181 919.369

4 BFA Banco de Fomento Angola 868.032 759.902

5 BIC Banco BIC 751.324 664.191

6 BPA Banco Privado Atlântico 357.006 293.409

7 BMA Banco Millennium Angola 223.483 175.527

8 BDA Banco de Desenvolvimento de Angola 221.048 185.407

9 BSOL Banco Sol 205.840 178.638

10 BNI Banco de Negócios Internacional 184.176 162.145

11 BCGTA Banco Caixa Geral Totta de Angola 183 016 151.648

12 SBA Standard Bank Angola 148.492 61.977

13 BCI Banco de Comércio e Indústria 98.897 106.513

14 KEVE Banco Regional do Keve 98.200 85.815

15 FNB Finibanco Angola 54.603 28.698

16 BCA Banco Comercial Angolano 30 854 36.651

17 BANC Banco Angolano de Negócios e Comércio 16.362 15.154

18 BVB Banco Valor 15.120 7.016

19 VTB Banco VTB África 14 .358 11.295

20 BKI Banco Kwanza de Investimento 9.121 3.519

21 SCBA Standard Chartered Bank Angola 4.827 nd

22 BCH Banco Comercial do Huambo 4.058 3.156

23 BMF Banco BAI Micro-Finanças nd nd

24 BPPH Banco de Poupança e Promoção Habitacional nd nd

Exchange Rate: 1 US dollar = 99.85 kwanza. (November, 2014).


THE NUMBERS TELL THE

STORY

Total deposits and assets of Angola´s major banks have been growing in recent years, due in part to the expansion of their branch networks, which has brought banking services to a larger percentage of the population.

41 BANKING & FINANCE Angola


1 BAI Banco Angolano de Investimentos 902.936 815.204



4 BIC Banco BIC 615.478 525.785

5 BESA Banco Espírito Santo Angola 349.163 349 112


7 BSOL Banco Sol 182.475 154.469




11 BCGTA Banco Caixa Geral Totta de Angola 132.395 112.668




15 BCA Banco Comercial Angolano 23.789 29.843



18 VTB Banco VTB África 7.005 6.380



21 SCBA Standard Chartered Bank Angola 0 nd

22 BDA Banco de Desenvolvimento de Angola nd nd




1 BESA Banco Espírito Santo Angola 1.107.13 1.007.218

2 BAI Banco Angolano de Investimentos 1.039.693 1.033.428



5 BIC Banco BIC 751.324 664.191



8 BDA Banco de Desenvolvimento de Angola 221.048 185.407

9 BSOL Banco Sol 205.840 178.638


11 BCGTA Banco Caixa Geral Totta de Angola 183 016 151.648





16 BCA Banco Comercial Angolano 30 854 36.651



19 VTB Banco VTB África 14 .358 11.295


21 SCBA Standard Chartered Bank Angola 4.827 nd




Source: KPMG, Análise do Sector Bancário Angolano, Outubro 2014.

TOTAL DEPOSITS MILLIONS OF AKZ

TOTAL ASSETS MILLIONS OF AKZ

Exchange Rate: 1 US dollar = 99.85 kwanza. (November, 2014).


WF: First of all, we would like to talk about your overall view of Angola. Before one de-cides to invest in a country, there are dif-ferent variables to take into consideration, beyond the economy and finances. Do you think that political stability may be a factor in the growth of the number of new compa-nies in Angola?TP: Precisely. In my opinion, peace is one of the most important factors in the development and growth of a country. In order to grow and reach a state of devel-opment, a country needs peace and har-mony, and needs its population to feel at ease and know that free circulation of people and goods across the country truly exists. This is what attracts inves-tors, boosts the confidence of the coun-try’s international creditors, and shows that the country—in this case, Angola—has a higher organizational index. We are more stable because of this period of peace over the last approximately 10 years, that things are working very well and that what is happening is an exam-ple to be followed by the whole of Africa.

WF: Globally, we have seen that start-ups are playing a more important role in tech-nological development. What is the role

played by FACRA in making it possible for the country to join this global trend? Can we say that FACRA is a driving force for in-novation in the country?TP: It’s true, FACRA is focused on inno-vative projects. Why? Because innova-tion guarantees the sustainability of these projects. An innovative project with broader acceptance in the short, medium and long term attracts the confidence of people, because it is something that did not exist before in the market. This is why we are focused on innovation as a goal, because it generates added value for the product, strengthens the diversity of the economy, and expands the job market.

WF: You mentioned sustainable long-term development, and another key concept that we must talk about is economic diversifica-tion. What is the estimated impact? What is needed for the country s diversificationTP: We hope that, by 2022, we will at least reach a level of employment above 500,000 jobs, and a contribution to the country’s GDP of about $10 billion. This is our primary objective and we are work-ing to achieve these goals.And since we have a 10-year mandate, our main guide-lines are aimed at reducing poverty, re-

placing imports with national products, and generating an expanded offer of goods and services for the population.

WF: In the past, you´ve talked about the importance of filling the gap between the large international companies that have been opeating in Angola for over a decade and the micro-compànies that work in is-loation. What is FACRA´s investment strat-egy to support the growth of these micro-companies?TP: FACRA supports the growth of com-panies. Our objective is that these micro, small- and medium-sized businesses may grow, generate added value, and develop a revenue structure capable of ensuring their own sustainability. Not only during the period of investment by FACRA, but also later, in their regular daily operation, so that they continue to grow and thereby help to achieve the goals set by the government and which I just mentioned: diversifying the econ-omy, generating jobs, reducing imports and replacing them with national pro-duction. Our greatest interest is boost-ing their growth, not only financially, but also in terms of know-how, through capacity-building and management sup-

INTERVIEWTEODORO DE JESUS XAVIER POULSON,

MEMBER OF THE MANAGEMENT COMMITTEE OF FACRA (FUNDO ACTIVO DE CAPITAL DE RISCO ANGOLANO)

FACRA, a public venture capital fund, provides financial, techni-cal and management support to small and medium-sized busi-nesses in Angola. One of the largest venture capital funds in Afri-ca, FACRA offers a financing alternative for local entrepreneurs, particularly those with innovative projects. Teodoro Poulson talked to The Worldfolio about FACRA’s goals and how it hopes to contribute to Angola´s economic diversification.

Interview FACRA 42

42-43 interview FACRA-2 8x10,5.indd 42 14/11/14 16:39

port, to create the dynamics required for them to continue pro-gressing and generating that development.

WF: In this context of promotion of small and medium-sized busi-nesses, could FACRA be considered an alternative to conventional financing by the banking system hat are the advantagesTP: FACRA has a lot of advantages because it is much more than just financing. It invests financially, but also provides manage-ment support. Therefore, FACRA is different from conventional financing. ecause a bank will only give financial support, and that’s it. FACRA isn’t like that: it accompanies management and creates institutional forms of support that promote the growth of the company. FACRA also does not charge interest, it takes on a business as its own, participates in its management, be-comes a partner in the project, and later sells its participation—this is FACRA’s investment. Bank loans, on the other hand, are a different form of financing, which charges interest and, in a way, hinders the rapid growth of companies.

WF: With the future establishment of the stock market, there is a potential for profit from IPOs (Initial Public Offerings). hat are the other exit strategies for FACRA to get a return on its investment?TP: Good question. Our priority is to be the promoter, the own-er of the project. Our primary intent is to sell our participation to the business promoter. Only in the event that the promoter is not interested, or does not have the capacity to buy our partici-pation, will we resort to the alternative method, which would be the stock market.

But we will only use the stock market as a last resort. Our primary intent is to sell our participation to the business promot-

er. Because, in general, the promoter is the one that started the project, and we always give priority to the business promoter.

WF: Considering the challenges of Angola, which is ranked 179th in the orld Bank report on the Ease of Doing Business, what is the direct or indirect role that these institutions can play in the growth, improvement and transparency of the Angolan financial sectorTP: FACRA follows internationally accepted rules of gover-nance. FACRA is an institution that always values transparency and clarity in all our operations. We are well trained and have a specialized team that deals with these projects; we are audited and accompanied by equally accepted and recognized inter-national accounting firms. This means that we use and stand by very stringent criteria in our operations. We have no issues with regard to transparency.

WF: To conclude, what is the most rewarding aspect of your work? And what is your dream with regard to the development of small businesses in Angola?TP: The most rewarding part is seeing companies grow and pro-duce, seeing the Angolan people produce what is consumed in Angola. This is our greatest satisfaction, as an institution and as a citizen of Angola. We want Angola and the Angolan people to be able to work to produce the goods and services required for local use. Therefore, our greatest challenge, our greatest desire, is for Angola to start consuming more national products. Because Angola has the potential, has the capacity, has sufficient natural resources to produce goods and services, not only for the Angolan people, but also to export. So, we want to reverse our role as importers and be-come exporters. Not just of oil, but of other goods and services.

FACRA Interview43

42-43 interview FACRA-2 8x10,5.indd 43 14/11/14 16:39

As one of the world’s fastest growing economies, with a burgeon-ing middle class and an increasingly diversifi ed industrial base, Angola is certainly an attractive destination for foreign investors - and the range of fi scal incentives available make it even more so.

The African continent’s global share of foreign destination investment FDI has grown from 3.2 in 200 to 5. in 20 2, and Angola has been one of the largest recipients of those capital in ows. The country is the seventh largest destination for FDI in Africa and third largest in the sub-Saharan region. Since the es-tablishment of the fi rst investment law in 2003 following the end of the civil war, Angola has attracted more than $50 billion of FDI, 80 of which has been in the coal, oil and gas sectors. While the oil, gas and mining industries will continue to dominate the for-eign investment landscape, sectors such as real estate, construc-tion, telecommunications, fi nancial services, agri-business, and retail and consumer products have become increasingly attrac-tive for foreign investors.

Angola has been open and eager to attract foreign investment since 2002, the year that saw the end of the civil war. To attract the private investment needed to drive economic growth and rebuild infrastructure, the government in 2003 established the National Agency for rivate Investment ANI and introduced the asic

Private Investment Law, which laid down the rules and incen-tives for both foreign and domestic investors.

This law stipulated that Angolan and foreign investors would be treated equally and offered similar opportunities with respect to the country’s policy on incentives related to taxation and customs duties.

The government introduced new investment legislation in 20 in order to encourage more private investment in a range of industries and prioritized zones for economic development. The new legislation alters fi scal benefi ts and incentives, aims to reduce bureaucracy and facilitate legal procedures, and provides a range of guarantees to eligible investors, such as repatriation of capital.

One of the most notable changes to the private investment law is the minimum capital requirement for foreign inves-tors to qualify for incentives. This has jumped from $ 00,000 to $ ,000,000. Investors should be aware that this minimum project capital requirement fi gure is per investor and not per com-pany . For example, if a company has fi ve foreign partners, the law considers each to be a private investor, therefore raising the minimum capital investment for a project to $5 million. arge-scale investments between $ 0 and $50 million must be assessed and approved by the Council of inisters. rojects above $50 mil-lion are subject to approval by a special presidential committee.

THE NEW LEGISLATION ALTERS FISCAL BEN-

EFITS AND INCENTIVES, AIMS TO REDUCE

BUREAUCRACY AND FACILITATE LEGAL PRO-

CEDURES, AND PROVIDES A RANGE OF GUARAN-

TEES TO ELIGIBLE INVESTORS.

By Jonathan Meaney

DOING BUSINESS: NEW RULES TO CHANGE OLD HABITS

Angola offers both high risks and great rewards to in-

vestors and exporters. The rules for setting up a compa-

ny are complicated and the processes often slow. None-

theless, the country is intent on attracting capital from

abroad. We take a look at recent changes to investment

legislation and what they mean for business.

ANGOLADoing

Business

44Angola DOING BUSINESS

44-47 Doing Business-V2 8x10,5.indd 44 14/11/14 16:47

STA TIN A USIN SS 8

TTIN C DIT 30

IST IN TY 32

TTIN CT ICITY 0

D A IN WITH C NST UCTI N ITS 5

S IN INS NCY 8

NF CIN C NT ACTS 8

T ADIN AC SS D S

AYIN TA S 55 T CTIN IN ST S 80

WHERE ANGOLA STANDS IN THE WORLD BANK´S RANKING

OF 189 COUNTRIES, IN TERMS OF EASE OF DOING BUSINESS.

Source: World Bank, 2013. Doing Business 2014. Understanding

Regulations for Small and Medium-Size Enterprises.

SIC

S 2

ININ

5

IH

T IN

DU

STY

2

FISH

IN

CN

STU

CT

IN

2

HT

ST

UIS

3

CC

3

AIC

UT

U 2

TU

Source: How to invest in Angola. Angolan

National Private Investment Agency, 2013.PRIVATE INVESTMENT BY INDUSTRY:

ANGOLA’S RAPIDLY DEVELOPING

ECONOMY, GROWING

MIDDLE CLASS AND

ATTRACTIVE INVESTMENT

INCENTIVES OFFER GREAT

OPPORTUNITIES FOR INVESTORS

IN A RANGE OF INDUSTRIES.

45 DOING BUSINESS Angola


46Angola DOING BUSINESS

Investors are obliged to enter into a contract with the Angolan government, represented by ANI . The agency acts as a one-stop shop for foreign investors, whose main function is to streamline bureaucratic procedures, and to provide advisory support, techni-cal and legal assistance and investor protection. The 20 legisla-tion gave ANI more power to approve projects and decide on in-centives, in order to speed up processing and approval time. ach project is assessed on a case-to-case basis by the agency, which also lays out the incentives available accordingly.

As the government is determined to diversify the economy away from the oil and diamond industries, and to spread econom-ic growth to areas outside of the main industrial centers such as Luanda, the size and range of incentives vary, depending on loca-tion and economic sector. Incentives are offered in sectors that the government has prioritized for development, such as: agricul-ture and cattle breeding; the processing industry; fi shing and fi sh products; civil construction; health care; education; road and rail infrastructure; port and airport infrastructure; telecommunica-tions; and energy and water supply.

Almost every sector of the economy is open to foreign inves-tors. However the law prohibits investment in areas which by law are the sole responsibility of the State of Angola, such as: manu-facturing, distribution and sales of warfare equipment; banking activities related to the central bank and treasury; administration of ports and airports, and the national network of basic telecom-munication infrastructures.

Areas prioritized for development are broken into three zones A, and C. Investors are eligible for tax exemptions of up to fi ve years in one A province of uanda and municipal centers of enguela, Huila and Cabinda provinces, and the municipal-ity of obito , up to eight years in one provinces of wanza Norte, wanza Sul, engo, U je, undas and interior municipali-ties of enguela, Cabinda and Hu la , and up to 0 years in one C municipal centers of enguela, Huila and Cabinda provinces, and the municipality of obito .

Investors are also eligible for an exemption of up to six years from customs duties and levies on goods and equipments, includ-ing heavy and special vehicles, from the start of the investment op-erations until the complete development. After that, investors are only liable to pay stamp duty and service-related fees.

It should be noted that in January of this year, the government increased import duties on items such as beer, water, fruits, soft drinks, agricultural products and livestock, from as high as 30 to 50 , to encourage local production and to reduce dependence on food imports. This would potentially impact investors in the

hospitality and food retail sectors. However, the government has identifi ed some goods for protection and has also eliminated duties on equipment and raw materials needed for industrial production.

In 200 , Angola established the uanda- engo Special co-nomic one S with the objective of lowering Angola’s high dependence on imports and consolidating the development of the Angolan business community. The industrial activity at the uan-da- engo S has generated more than 3,500 jobs since its estab-lishment. While the S does not offer the incentives available at the other development zones A, and C however the possibility of offering such incentives are currently being reviewed by the Min-istry conomy of Finance , it does offer companies a convenient location in which to base their business activities and guarantees a reliable supply of water and energy.

Despite the country’s obvious attractions, investors should be aware of the complications of doing business in Angola. ike the majority of Sub-Saharan African nations, it faces serious problems with corruption, red tape and poor infrastructure. In its Angola in-vestment climate report 20 3, the U.S. State Department states that Angola offers both high returns and great risks to investors and

exporters… the business environment remains one of the most dif-fi cult in the world. Investors must factor in pervasive corruption, an underdeveloped fi nancial system, poor infrastructure and ex-tremely high on-the-ground costs. Surface transportation inside the country is slow and expensive, while bureaucracy and port inef-fi ciencies complicate imports and raise costs.

In the World ank’s Doing usiness 20 index, which sheds light on how easy or diffi cult it is for a local entrepreneur to open and run a small to medium-size business when complying with rel-evant regulation, Angola ranks th of the 8 economies evalu-ated, one place lower than the previous year.

The country scores considerably low in Starting a usiness 8th which, according to the Doing usiness 20 report, takes

days, requires 8 procedures and costs 30. of income per capita I C . This can be put in context when compared with the Sub-Saharan regional average 2 . days to start a business, requir-ing 8 procedures at a cost . of I C.

ther notable areas in which Angola ranks particularly low in-clude 0th in etting lectricity which takes 5 days and costs 8 . of I C ; th in Trading across orders time to exports 0 days ; 8 th in nforcing Contracts time ,2 days at a cost . of the claim . However, Angola ranks better in indicators such

as rotecting Investors 80th , Dealing with Construction ermits 5th , egistering roperty 32nd and etting Credit 30th .

While doing business remains challenging, the situation has improved over the years. This is evident by the Doing usiness Distance to Frontier measure. This measure shows how far on average an economy is from the best performance achieved by any economy on each Doing usiness indicator. According to this measure, Angola has improved signifi cantly since 2005, in the areas of Starting a usiness, egistering a roperty and Trad-ing across orders.

When dealing with the bureaucratic challenges and red tape, a recent report by consultants rnst and Young Y advises for-eign investors that an understanding of the strategic objectives of government and aligning investor’s commercial interests to those objectives can go a long way to mitigating these challenges .

ast year the government released The Angolan National Development lan 20 3-20 . The Y report goes on to say that


47 DOING BUSINESS Angola

An encouraging aspect of the ND is the priority government has given to private investment to diversify the economy and create jobs. y 20 , the ND expects ANI to double the annual amount of private investment approved. For this to happen, ANI will have to continue to streamline and facilitate bureaucratic procedures.

Another serious concern for investors is corruption. In Transparency Interna-tional’s Corruption erceptions Index 20 3, Angola ranks 53rd out of the 5 countries evaluated. In the World ank’s Control of Corruption indicator, it ranks 5th with the highest-ranking country being deemed the most corrupt of all countries evaluated .

However, there are signs that the situation is changing. The Y Angola report states that While there is un-doubtedly substance to these concerns, the situation continues to improve. ver the last 8 months, a significant effort has been put in place by Angolan soci-

ety to rescue the social and moral values lost during the 0 years of violence that ended in 2002. The associated rescue of business values initiative [is] being led by the Chamber of Commerce and Industry of Angola (CCIA)… by maintaining high anti-corruption standards and working with authorities to root out corruption, re-sponsible investors will be aligning their objectives with those of the CCIA, ulti-mately ensuring long-term sustainability of commercial operations, hopefully pro-viding investors with confidence that this risk is being addressed.

oth the World ank and the I F have praised Angola for its efforts to im-prove transparency, particularly in the oil industry. A World ank report released in une 20 3 said that The government has

improved collection and reporting pro-cesses for oil revenues and transfers, and that the authorities have made significant strides in improving the transparency and

accountability of public financial manage-ment, but challenges remain. ikewise, an I F report released in 20 similarly stated that The government has stepped up its monitoring of oil revenue transfers to the budget, and work is ongoing to reduce the large unexplained residual in the fiscal accounts and to reduce quasi-fiscal opera-tions by the state oil company.

Angola’s rapidly developing econ-omy, enormous natural resources and attractive investment incentives of-fer great opportunities for investors. While ANI and the government have made an effort to streamline slow and costly procedures and tackle corrup-tion, serious challenges remain. Still, it is worth noting that the challenges of bureaucracy, corruption and infra-structure have not deterred U.S. com-panies, which invested close to $25 bil-lion 2003 and 20 , making the United States Angola’s top foreign investor.

DESPITE THE COUNTRY’S OBVIOUS ATTRAC-

TIONS, INVESTORS SHOULD BE AWARE OF

THE COMPLICATIONS OF DOING BUSINESS

IN ANGOLA.


48Interview MINISTER OF TRADE

INTERVIEWwith

ROSA ESCORCIO PACAVIRIA DE MATOS, MINISTER OF TRADE

WF: In your opinion, how can Angola encourage investors to invest with confidence?RP: At the moment, in Angola, we have a democratic government and a country that has been becoming increasingly globalized, ready to wel-come any foreign investor with open arms. I can say that today they can in-vest with confidence, as long as they establish the right partnerships, with the right people and companies, at the right time. There are some inves-tors who think that all they need to do is come to Angola and everything will be very easy. My advice would be to start by investigating the type of investment they want to make, learn about Angolan legislation—which is actually quite favorable—and find a suitable partner for their investment.

We have various sectors for inves-tment in Angola. After all, we cannot for-get that this was a country ravaged by war.

The areas that the government de-fined as priorities for investment are education, managerial staff training in the various fields of knowledge as well as technical-vocational training so that we may rise to the challenges presen-ted by the economic diversification that is a goal for the country. Today, we still have to use the help of expatriates to fill that skilled labor deficit.

For investors, an important area of investment may be related to tra-de, because we are currently building logistic structures to support com-mercial activity; we have agricultural production already in place and plenty of arable land, which means we have the conditions for achieving self-suffi-ciency in food.

On the other hand, we feel that we must implement some mechanisms for protecting our internal production, because we are receiving, at the Mi-nistry, 30,000 requests per month for product import permits.

We have import monopoly groups in Angola; we have an import mo-nopoly in wheat flour, rice, sugar, etcetera, and we want to invert this framework of dependence. Therefo-re, we are inviting investors to make their investments in key areas of lo-cal production. As I already mentio-ned, we have arable land, so there are reasons why we cannot produce wheat and other products that can be produced here.

We must create an internal pro-duction capacity; the distribution in-frastructures and railroads for freight are being created. Note that we are part of the SADC (Southern Africa De-velopment Community) and, therefo-re, want to be included in this econo-mic integration. We must join the free trade zone and, at the moment, we are creating the conditions for the coun-try to join.

To that end, we are preparing a roadmap for joining the free trade area. Out of the 14 SADC countries, only three—Angola, DRC and Swazi-land—are yet to join, but the latter two are already a few steps ahead of us. We may possibly join the area in 2015.

WF: Tell us about Angola´s trade rela-tions with the United States. Are they limited solely to oil exports?RP: With regard to trade with the Uni-ted States, I can tell you that we have solid relations, although our main ca-lling card has been oil. It is true that the United States has really opened up to the African market, but if the Afri-can market does not work together, the continent will not be as compe-titive for the American market. It is true that for the United States, Ango-la exports only petroleum, but we are creating the capacities so that we can export other products—one of those conditions has to do with the certifi-cation and labeling of our products.

Trade Minister Rosa Escor-cio Pacaviria de Matos tells how Angola has become more welcoming to foreign investors and what sectors are being given priority by the government.

“MY ADVICE TO INVES-

TORS WOULD BE TO

START BY INVESTIGATING

THE TYPE OF INVEST-

MENT THEY WANT TO

MAKE, LEARN ABOUT

ANGOLAN LEGISLATION

—WHICH IS ACTUALLY

QUITE FAVORABLE—

AND FIND A SUITABLE

PARTNER.”

48-49 Interview Rosa Escorcio-8x10,5.indd 48 14/11/14 16:37

We created the National Institute for Exports precisely so that it can take charge of certification and promotion of our exports.In addition to oil, we are also expor-ting diamonds and other minerals, and we think that, with the liberalization of the market and with the increase of domestic production, we can progress toward increasing our trade balance.

WF: The banking and finance sector has been working hard to turn all of this restructuring into a reality. What is the State doing to facilitate and operate with commercial banks to benefit entrepre-neurship?RP: We are currently working with the banking sector because business peo-ple have told us about several con-cerns they have, including financial support and the Angolan State’s gua-rantees for the fulfillment of that mis-sion. The other concern has to do with surface rights for the construction of infrastructure, as well as with the fa-cilitation of building permits. We are working with the banking sector so that it can support the business people that are going to be included in this commercial expansion program.

We created what we call agricul-tural production corridors, and there are already four of them operating. Each corridor has four productive provinces and other non-producti-ve ones, to create a kind of balance. There is a program for the purchase of farmers’ agricultural products, ca-

lled PAPAGRO, which has the goal of continuously purchasing the excess production from farmers, co-ops and associations and taking them to the major consumption centers through the Logistics and Distribution Centers. The agricultural products are sold to Rural Logistics Agents through a con-tract to supply these products to lar-ge and medium-sized markets, small stores, hospitals, daycare centers, old-age homes and schools within their area of influence. This way, more jobs are created and the struggle against poverty is strengthened.We are conducting a survey to identify the illegal foreign labor force in Ango-la, especially in the area of commerce, so that we can replace them with An-golan workers.

WF: In this specific segment, what are the major priorities of the government?RP: Our major priorities are agricul-ture and the manufacturing industry.

WF: Please tell us a bit about the role of women in Angola and your own role as a woman at the head of the Ministry of Trade. Could you mention any program aimed at supporting and strengthening the contribution of women to the econo-mic life of Angola?RP: Coming to this sector was a great challenge for me. I am a person who enjoys a challenge, and I have always enjoyed working in the field, getting my hands dirty. This has been the pro-file of the activities that I have been

performing until now. I know the who-le national territory and I know the daily life of peasant women.

Your question is a good one becau-se many heads of household in Angola are women, and it should be noted that Angolan families can be quite large.

With regard to support programs for women in Angola, for some rural municipalities where there is not a lot of food diversity, we created a card subsidized by the State for the purcha-se of staple products (including medi-cines in drugstores) for families who-se head of the household are women.

We also created community kit-chens, where the cost of a meal is very low, to make it easier for low-income people, and we have women wor-king and managing those kitchens. We have yet another program aimed at women, which is the program for the construction of agricultural gre-enhouses for the germination of farm products, where they buy the plants already as seedlings, instead of seed. We provide all the technical support to that program.

We also have the school snack pro-gram, with a decentralized budget for each municipality, where women are again in charge of making the snacks.

Apart from being the Minister of Trade, I am also a consumer, and therefore I feel the responsibility of watching over and protecting our po-pulation, so that we may have healthy food going from the farm fields to the consumer’s plate.

49 MINISTER OF TRADE Interview

48-49 Interview Rosa Escorcio-8x10,5.indd 49 14/11/14 16:37

50Angola CONSTRUCTION

THE CONSTRUCTION BUSINESS IS FLOURISHING IN ANGOLA, AS THE GOV-ERNMENT MOVES TO REPAIR THE DAMAGE TO INFRASTRUCTURE LEFT BY THE CIVIL WAR AND TO MEET THE NEEDS OF A GROWING MIDDLE CLASS FOR HOUSING, HOSPITALS AND OTHER SERVICES.

In terms of construction jobs, rebuilding an entire country is about as big as they come.

The civil war that devastated Angola for 27 years un-til 2002 left much of the country’s infrastructure – roads, bridges, railways – in ruins. The oil-driven economic growth during the years after has brought boom times for the construction industry, as Angola struggles to repair the damage of war and to provide housing, schools, and hospi-tals for a growing population.

The cranes that adorn the skyline of Luanda are evi-dence that the building trade is on a roll; the companies

getting the business are from Portugal, Brazil, Greece and, most notably China. All have been drawn by the growth that has turned Angola into sub-Saharan Africa’s third-largest economy, after South Africa and Nigeria. Real GDP ex-panded by 7.43% in 2013, according to the central bank, although the IMF puts the figure at a more conservative 6.8%. The IMF also predicts that the non-oil economy will grow by 7.3% this year.

“At this moment, Angola has one of the highest rates of growth in the whole world,” says Housing Minister Jose Silva. “One of our main goals is to reduce the country’s dependence on oil. Other sec-tors -- such as manufacturing, agriculture and civil construction – are now starting to contribute strongly towards that aim.”

But infrastructure is only half of the equation; in order to grow, a country needs its workforce. And a workforce needs somewhere to live. One of the biggest challenges facing An-

By Rob Train

ARTICLEINFRASTRUCTURE

REPAIRING THE DAMAGE OF THE PASTBUILDING FOR THE FUTURE

50-54 Construccion-V2-8x10,5.indd 50 14/11/14 16:41

51 CONSTRUCTION Angola

gola is to provide adequate housing for a growing middle class. In 2008, President Jose Eduardo dos Santos pledged to build one million new homes within four years. A multi-na-tional effort to do so was undertaken, with companies from China, Greece, Portugal and Brazil getting involved.

The China International Trust and Investment Company (CITIC), which has been active across all sectors in Angola for many years, recently announced that ground would be broken on a new 6,000-unit development on the outskirts of the northern city of Malanje.

The project includes the con-struction of roads with domestic sewage and drainage systems, water and telecommunications networks, as well as electricity and a petrol station, police station, fire station and health centre. CITIC was also behind the Kilamba New City de-velopment, a vast project designed to house 500,000 people and pro-vide services such as schools and shops and restaurants. After a slow start, the population of Kilamba has steadily grown and is estimated to stand at around 70,000 currently.

Elsewhere, Greek construc-tion company Argon Investment is involved in a $200-million com-mitment to build 70,000 houses in Angola, across all the provinces of the country.

However, Housing Minister Sil-va notes that problems still exist in the sector: “The main difficulty we still face relates to factors linked to logistics, as we remain strongly de-pendent on the import of construc-tion materials.

WHILE THE REBUILDING PROCESS UNFOLDS ON LAND, ANGOLA IS ALSO LOOKING OUTWARD TO HARNESS THE POTENTIAL OF ITS SEAFARING TRADE.

ONE OF THE BIGGEST CHALLENGES FACING ANGOLA IS TO PROVIDE AD-EQUATE HOUSING FOR A GROWING MIDDLE CLASS



Obviously, since cement is a basic raw material in the construction industry, this is one sector where companies could invest in order that the product be made locally. We do already have a cement industry here but it is just not able to keep up with the demand from a booming construction sector. We are working on containing the rise in the costs of materials and once this problem is resolved, then we’ll have prices that are much more affordable. The housing policy of the state is focused principally on the middle class and on people who are disadvantaged, but we also have within the program what we call free prices, which allows private-sector investors to still take on high-class construction projects.”

China has been by far the biggest contributor to the re-building effort in Angola via a bilateral agreement by which the Asian nation extends loans for construction and infra-structure in exchange for oil. However, other countries have queued up to join the vast undertaking. Obredecht, a Brazilian firm active in 35 countries, has taken a lead role on key projects such as the provision of electricity and wa-ter as well as the construction of roads.

In May, former Brazilian president Luiz Inácio Lula da Silva (“Lula”) visited Malanje ahead of the World Economic Forum for Africa, to see first-hand some of the projects be-ing carried out by Obredecht. The Brazilian company has been involved in Angola since 1984, when it signed a con-tract for the construction of the Capanda hydroelectric dam on the Kwanza river, 360 km (220 miles) from the capital. However, the civil war prevented the project from getting off the ground until 2004, when the dam started generating electricity to supply Luanda.

Unlike Chinese firms, which import their own workers under a clause signed into the bilateral agreement, Obre-decht has sub-contracted many projects to Angolan firms. Likewise, the number of Angolans holding key positions within the company has risen from nine percent to 41 per-cent in recent years.

Portuguese companies are also well established in Angola’s construction sector, which represents a signifi-cant proportion of their revenue. The two largest ones are Soares da Costa and Teixeira Duarte. The latter has been active in Angola since 1976 and its international market represents 81.2 percent of a total revenues of $1.26 billion, of which Angola accounts for 46 percent.

Soares da Costa has been awarded the tender to build the headquarters of power company Empresa Nacional de

Electricidade (ENE), in Luanda, for $46.9 million. In 2013, Soares da Costa’s biggest market was Angola, which accounted for 57 percent of total revenues. In February, it was announced that An-

golan businessman Antonio Mosquito would assume a 66.7 percent stake in Soares da Costa through a capital increase of $70 million, to be underwritten entirely by Mosquito.

However, the influence of foreign companies means that relations with local Angolan firms have not always been entirely cordial. The fact that Chinese firms are paid directly from Beijing while their Brazilian and Portuguese counterparts are exposed to the vagaries of the local econ-omy has also been a point of contention. This has in turn led to some suspect construction work, with the Luanda General Hospital a case in point. Completed in 2006 in the Kilamba Kiaxi district by the China Overseas Engineering Group, the hospital was closed in 2010 due to structural concerns. The China Tiesiju Civil Engineering Group be-gan construction of a new Luanda General Hospital in the same location in 2012, with work slated to be completed by July 2014.

CONTAINER TRAFFIC AT THE PORT OF LUANDA HAS ALMOST DOUBLED OVER THE PAST FIVE YEARS.


53 CONSTRUCTION Angola

The government in 2010 introduced a new procurement act, which a 2011 study by Norway’s Christian Michelsen Institute and the Angolan Centro de Estudios de In-vestigação Científica described as “a step forward in the sense of organizing a scat-tered legal framework and by promoting competition and procurement expertise.”

The new legislative framework con-solidates two previous separate laws gov-erning the systems for public expenditure, provision of services and the leasing and acquisition of goods while also regulating the award of public works contracts.

While the rebuilding process unfolds on land, Angola is also looking outward to harness the potential of its seafaring trade. The government is planning on building what will become the largest shipping terminal on the continent at Dande, 50 ki-lometers north of Luanda. Container traf-fic at Luanda has more than doubled over the past five years and Angola’s aim is to

ANGOLA IS TRYING TO REBUILD RAIL LINKS WITH NEIGHBORING COUNTRIES TO FACILITATE THE TRANSPORT OF MA-TERIALS FOR EXPORT

ANGOLACONSTRUCTION



challenge the port of Durban as the busiest in Africa. An-gola is the gateway to the international markets for many landlocked countries with rich mineral resources, such as Zambian copper and iron ore from the Democratic Re-public of Congo.

Port administrator for commercial, safety and environ-mental affairs Alberto Antonio Bengue told Bloomberg in April that plans are to increase the number of containers handled in Luanda to more than a million by the end of 2014, up from 912,900 in 2013.

Of course, in order to meet its goals for exports, inter-nal infrastructure is required, with rail links to the ports and a reliable road system. Construction Minister Walde-mar Pires Alexandre said in May that there are 11,000 kilo-meters of paved roads in Angola with a further 7,000 kilo-meters under construction.

Angola’s railways are modern and efficient, but lack connections. There are three main lines, Luanda, Ben-guela and Moçâmedes, which serve the ports at the capital, Lobito and Namibe respectively – a total of 2,761 kilome-ters. At the World Economic Summit in Nigeria, Chinese Premier Li Keqian vowed to support a continent-wide rail network linking all the capitals of Africa, but such a proj-ect is a long way off. In the meantime, Angola is trying to rebuild rail links with neighboring countries to facilitate the transport of materials for export. The Benguela rail-way is under reconstruction with the aim of providing a direct link to Kamina in the DRC.

But housing remains the major priority for Angolans, and international cooperation is key to achieving suc-cess in this area. It is an even more crucial component of the country’s future when it is taken into account that the median age in sub-Saharan Africa is 18, compared to 41 in Europe. Africa’s workforce is predicted to swell by 163 million in this decade. By 2035, it will be bigger than China’s, and by 2050 one-quarter of the world’s workers will be African, according to Director Magazine’s Africa Rising report.

According to Housing Minister Silva, “There are many good examples of countries that have undertaken hous-ing programs that have been very noteworthy, such as, for example, Brazil and Colombia, whose experiences in this area have been very positive. In Africa, you have Morocco, whose experience has been very interesting and deserves our careful study and attention. Here, what has in fact really caught our attention is the financing of housing, and in this respect we have been considering how to adapt the exam-ples of Morocco and Brazil to our own sociocultural reality.”

The road to recovery in Angola has been a hard one, but few could have predicted that just a decade on from a devastating civil conflict the country would be in the state of health it is now. There is still plenty to do but the coop-eration of the international community and the entrepre-neurial spirit of the Angolan people - the building blocks of a prosperous future - are firmly set in place.

THE ROAD TO RECOVERY IN ANGOLA HAS BEEN A LONG ONE, BUT FEW COULD HAVE PREDICTED THE RECOVERY THAT HAS ALREADY TAKEN PLACE.


55_Angola_TheWF-maxam.indd 1 11/14/14 12:52 PM

In a bid to wean the economy off crude oil, Angola is banking on the ICT sector to become a chief engine of growth. Apart from sales of smartphones, digital TV and broadband, it is anticipated that modern ICT services will improve the efficiency of companies and organizations across the entire economy. (The World Bank es-timates that a 10% increase in broadband penetration in a country translates to an increase of 1.2%-1.4% in GDP.) With the help of companies from Chi-na, Sweden, Belgium and Russia, Angola

has been pioneering the telecommuni-cations revolution in Africa.

“Angola is leading Africa´s develop-ment in the telecommunications sector,” says Amilcar Safeca, Deputy CEO of Unitel, the country’s largest mobile operator.

“Information and communication tech-nology is essential in the functioning of the modern economy, hence the focus on public and private investments in this area in re-cent years. In Angola, ICT will help compa-nies to be more efficient and competitive; it will help in the emergence of new business

and in the country’s future growth.” Improving company efficiency is start-

ing within the telecoms industry itself: the state-owned operator Angola Telecom(AT) is currently undergoing a large-scale re-structuring process with the help of inter-national consultants. “[This] is seen as a step towards greater liberalization of the country’s telecom market, improved effi-ciency of the national telco and its eventual privatization,” says a report by global tele-communications research and consultancy company, BuddeComm.

MOVING AT HIGH SPEED

ANGOLATELECOMS ith the introduction of the first net ork in Africa and the

construction of the game-changing South Atlantic Cable S s-tem SACS , Angola is at the heart of the telecommunications revolution on the continent.

By Jonathan Meaney

Angola TELECOMS 56

56-60 TELECOS V4-8x10,5.indd 56 14/11/14 16:43

The announcement earlier this year that AT expects to turn a profit in 20 5 for the first time in eight years is evidence that the overhaul is paying off. The company has forecast a net in-come of almost $ million in 20 5, compared with a loss of $ 0. million in 20 2. This return to profit will be mainly the result of a government injection of $314 million in November, 2012 – part of the restructuring process – to pay off debts, increase revenue collection, boost sales and extend and repair fiber optic cables.

For AT, the next possible step is entry into Angola’s lucra-tive mobile market. Mobile penetration has jumped from 20% to 5 in only four years, making Angola one of the fastest grow-

ing mobile markets in the world; uddeComm predicts penetra-tion will hit 0 by the end of the year. Fixed-line penetration lags far behnd, at .5 , while Internet access , currently , is forecast to reach 26% by the close of 2014.

A third player in the industry would certainly help to further drive growth, bring down prices and improve services. But with rapid growth in penetration and millions of prospective new customers up for grabs, AT is not the only company con-sidering a bid for the coveted third mobile license in Angola; South Africa’s TN and Vodafone’s African subsidiary, Vodacom, have also expressed their interest.

The mobile market is currently a du-opoly controlled by Movicel and Unitel. The latter is part-owned by Isabel dos Santos, Africa´s richest woman and the daughter of Angolan President Jose Edu-ardo dos Santos. Unitel is the dominant player, with a 0 market share and around 10 million customers.

Both companies have been at the forefront of 4G LTE (Long-term Evolu-tion) mobile technology – and not just in Africa, but on a global level. In January, Unitel, in collaboration with Swedish firm

ricsson, became one of the first few privi-leged operators in the world to demo LTE Advanced (LTE-A) Carrier Aggregation technology, hailed by Ericsson as “the next step in the evolution of high-speed mobile broadband services.”

A A S A A R CA S -T T T C U CA-

T S S CT R, sa s Amilcar Safeca, eput

C of Unitel, the countr s largest mobile operator.

T T C A S R C A, S , U

A RUSS A, A A AS R T T C S

R UT A R CA.

TELECOMS Angola57

56-60 TELECOS V4-8x10,5.indd 57 14/11/14 16:43

“With this demo, we are well on the way to launching the most advanced mobile network in Angola and perhaps Africa in the near future. We are working with Ericsson to make this happen,” said Unitel’s Amilcar Safeca on the launch.

The demonstration was the second milestone for the company in only four months. In October, 2013, the first-ever LTE video roaming call in Africa was made in Angola on the Unitel network, using the carrier services of Bel-gian company, BICS. The call was made during the visit of a Belgian trade mission, between Belgian Foreign Affairs Minister Didier Reynders in Luanda and BICS Vice-presi-dent for operations and customer Services, Johan Wouters, in Belgium. Daniel Kurgan, chief executive officer of BICS, said the call “marks the next stage of the evolution of the telecom market in Africa and the further realization of LTE roaming across the globe.”

But it was former Angola Telecom subsidiary Movicel, in partnership with Chinese phone giant T , that first intro-duced fourth generation LTE technology in Angola in 2012, putting the country ahead of many parts of the United States, Britain, and most countries on mainland Europe in the roll-out of 4G mobile services.

In order to keep the country at the forefront of the telecom-munications industry, both mobile broadband and fixed-line operators plan to invest billions of dollars in improving infra-structure in the coming years. Most notable of these invest-ments is the South Atlantic Cable System (SACS), also known as the Angola-Brazil cable. Launched earlier this year at a cost of over $200 million, SACS will stretch more than 6,000 km across the Southern Atlantic from the Angolan capital, Luanda, to For-taleza, Brazil.

Due for completion in 20 5, the SACS project will have an enormous impact on the telecommunications sector in Africa, South America and Asia. It has been reported that by connect-ing with existing cables, SACS could cut data traffic costs from South America, Africa and on to Asia by as much as 80%, as data traffic will no longer have to pass through urope and the US. This should translate into big savings for telecom operators that could be passed onto customers in Angola and across Africa. With cheaper and better services, it is anticipated that the cable will increase mobile penetration to 85 in the country within two years. SACS will also provide the shortest distance between the Sao Paulo and Hong Kong stock markets, as well as provid-ing a faster route from Europe to South America.

TELECOM PENETRATION IN ANGOLA

Mobile penetration has jumped from

20% to 65%

2009 2013

2010

10%

20%

30%

40%

50%

60%

70%

2011 2012 2013 2014

MOBILE PENETRATION TO REACH 70% BY YEAR-END 2014

INTERNET PENETRATION TO REACH 26% BY YEAR-END 2014

Angola TELECOMS 58

15

10

5

56-60 TELECOS V4-8x10,5.indd 58 14/11/14 16:43

MOBILE PENETRATION TO REACH 70% BY YEAR-END 2014

TELECOMS Angola59

S CTACU AR R T A ST A A T .

The following graphics from the International Telecommunications Union (ITU) show the tre-mendous growth in the number of telephone ac-cesses in Angola in recent years.The greatest increase has been in the number of cel-lular phones, which have more than doubled since 2008. Fixed-line phones have lagged behind, as mo-

bile telephony has overtaken many of its functions, particularly with the introduction of high-speed (4G) cellular networks. Broadband access is still minimal but has nonetheless doubled in the past two years. Despite the industry’s rapid expansion, the penetration rates (number of accesses per 100 persons) show that there is still a long way to grow.

THOUSANDS 2007 2008 2009 2010 2011 2012 2013 EAR

MOBILE ACCESSES 4,691 6,773 8,109 8,909 9,491 9,801 13.285 35.5%

FIXED TELEPHONES 94 114 303 303 303 303 215 (29.1%)

BROADBAND 11.7 11.7 20.0 20.0 25 31 48 53.9%

Source: ITU

DENSITIES 2007 2008 2009 2010 2011 2012 2013

MOBILE ACCESSES/100 INHAB. 28.26 38.71 43.84 46.69 48.4 48.6 61.9

FIXED TELEPHONES/100 INHAB. 0.54 0.64 1.64 1.6 1.6 1.5 1.0

BROADBAND/100 INHAB. 0.07 0.07 0.11 0.1 0.1 0.16 0.22

MILLIONS OF ACCESSES

CELLULAR FIXED LINES BROADBAND

15

10

5

2007 2008 2009 2010 2011 2012 2013

0.094.69

0.010.11

6.77

0.010.30 0.30 0.30 0.30 0.21

8.118.91 9.49

9.80

13.29

0.02 0.02 0.03 0.03 0.05

56-60 TELECOS V4-8x10,5.indd 59 14/11/14 16:43

Angola Telecom, Unitel, Movicel. MSTelecom and Star-tel are all behind this monumental project. All are share-holders in Angola Cables, which is covering the total costs of the cable’s construction. Angola Telecom has a 5 share, followed by Unitel 3 , STelecom , ovi-cel (6%) and Startel (3%). (See the interview with Angola Cables CEO Antonio Nunes, following this article.)

Angola is not only investing in telecoms infrastruc-ture projects on land and ocean; it is also aiming to go into space. With the help of Russian technicians, and financed by Russian bank VTB, the West African nation is construct-ing its very first satellite. Ango Sat, costing $300 million, is set to be in orbit by 20 – yet another groundbreaking ven-ture for Angola in the telecoms industry. Like SACS, Ango Sat is expected to bring down prices while also improving services, particularly digital television.

The Minister of Telecommunications and Information Technology Jose Carvalho da Rocha has said that Ango Sat will be subsequently followed by other satellites in the long

term. This would put Angola’s foot firmly in the African space race, which is currently led by the sub-Saharan Af-rica’s other large petro state, Nigeria (now officially the continent’s largest economy following a GDP rebasing in March, overtaking South Africa), which now has several satellites in orbit.

But Ango Sat and subsequent satellites mean much more than improved phone receptions, faster connection speeds and cheaper digital television. If Angola is to follow on the same path as Nigeria, satellite transmissions could have a much more important use. Nigeria’s satellites are be-ing used to improve agriculture, by giving farmers access to detailed, accurate and up-to-the-minute weather forecast-ing that was never before available. They are also being used for security in the fight against Boko Haram extrem-ists in the north of the country. Fortunately, Angola does not have a security issue on the scale of Nigeria’s, but like in Nigeria, satellites could be useful in efforts to improve ag-riculture, another priority sector in Angola for development and economic diversification.

Like Ango Sat, fourth generation mobile broadband of-fers much more than faster YouTube streams and instant ac-cess to Facebook. It is revolutionizing business, healthcare and education. “Banking, healthcare, and other applications have evolved on mobile, not because it was particularly suit-ed as a platform, but because there was simply no alterna-tive,” states a report by U.S. networking equipment manu-facturer Cisco on the evolution of the use of 4G in Africa.

The ways in which advanced telecoms technology can be used to improve lives and businesses are virtually end-less. Doctors can now make long distant diagnoses of those in isolated rural communities over the phone, using video calling or photo messages sent on instant messenger ser-vices. A small business owner will no longer have to travel for hours at a time to present a customer with an invoice; he or she can use a smartphone to send that invoice by email in a matter of milliseconds, and subsequently use this time for other productive activities. Mobile banking services are giving millions of people access to electronic payment ser-vices. Students can be taught English and other useful skills by teachers as far away as the U.S. or Britain using video conferencing technology.

Angolans are using 4G smartphones for far more than YouTube and Facebook access; they are utilizing the tech-nology much more innovatively – making small businesses, famers, individuals and large organizations work in a much more efficient and effective way. This will no doubt boost an already rapidly growing economy and has the potential to substantially improve livelihoods across the board.

Angola TELECOMS 60

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Sin título-10 1 11/14/14 12:38 PM

62 Interview ANGOLA CABLES

INTERVIEWwith

WF. The SACS project is one of the most antic-ipated telecom projects in the world. Where did the idea come from and the how did An-gola Cables undertake this exciting project?

AN: This project comes directly from a governmental concept, which is to become one of the best (countries) in telecoms in Africa. Our government’s perspective is to invite private com-panies and enterprises that belong to everyone in the telecom sector in Angola, and together embark on this big adventure, which means a lot to the company itself. We come from a company with a mixed perspective, both with business and public support, like Unitel, which is quite a mixed company. That is where we started. Angola has an old relationship with Brazil. Brazil was the first country in the world to recognize Angola as an independent country. Therefore, our cultural, political and economic re-lationship with Brazil is very strong from the beginning. Brazil is also in need of these cables, so even if we are both independent countries, we need the same kind of infrastructure. Therefore, we decided to start devel-oping that cable. The SACS project will also help in the development of the cable market in Africa; it will be a completely new road that will change the old telecom market.

WF: Do you think you were the obvious choice to be the leader of Angola Cables be-cause of your past successes at Unitel?

AN: I came to Angola Cable because in 2009 they invited operators and I was part of them. They needed some-one to help to manage the WACS (West Africa Cable System) project. Angola Cables was built to support WACS, which was the big project. At that time, the government invested $25 million and was willing to in-vest more. At that moment, it seemed unusual that the government would spend that kind of money on its own, so that is why they invited all the op-erators to participate. To make such a big project the government needed private support. At Unitel, we had been trained to make teams on our own. This project (WACS) compared to Unitel is a com-pletely new and different story, where they have to share definitions, men-talities and perspectives with others. Again, it is a new learning process.

WF: What image did you want to implant when you arrived?

AN: We need to change the image that people do not do what they are supposed to do, that we do not de-liver things in time, this type of im-age. This doesn’t bring confidence to people. Inside of WACS, we are partners but outside, these compa-nies remain competitors. It is really a new way to behave, even for my-self. It was a completely new way to learn. When I was helping to build Unitel, everybody was my competi-tor, we were trained to do things by ourselves and today I see that every-body is my boss. One of the things that I learned at WACS is that if you have to be able to work with your competitor, because if we join forces we can have much more, so it makes sense to share infrastructure. WACS it is the perfect example of sharing infrastructure. At the end of the day, it is better for everyone, even if we are in competition.

ANTÓNIO NUNES, CEO OF ANGOLA CABLESAngola Cables, a consortium of the countr s five telecoms operators, is constructing the South Atlantic Cable S stem SACS , hich

ill connect Africa to South America b means of a , km submarine fibre optic cable stretching from uanda to ortaleza in

razil. n uanda, SACS ill oin up ith the est Africa Cable S stem, helping to turn Angola into a hub for telecommunications on

the continent. n ctober, , Angola Cables announced that SACS ill also connect ith a ne undersea cable to be built bet een

razil and the United States. That pro ect ill be undertaken in a partnership ith oogle, razil s Algar and Urugua s Antel.

A T U S, C A A CA S, TA T R A UT T R S T SACS R CT, TS

T T A TS A S R C U T C S RASTRUCTUR A A T U T .

The SACS pro ect ill also help in the development of the cable market in Africa it ill be a completel ne road that ill change the old telecom market.

62-63 INTERVIEW Angola Cables-2.-8x10,5.indd 62 14/11/14 16:51

63 ANGOLA CABLES Interview

WF: How do you see Africa’s potential with regard to telecoms? Where do you see future opportunities?

AZ: We have a huge potential, but there are bridges missing. To people that are not used to building bridges, it is a massive chal-lenge; to us, it is just the way we do it. We are used to crossing a river and building bridges to cross that river. We learned that in our past. When we look at that what we are doing now, it is not much different from what we were doing before. Dealing with operator in Africa it is not an easy task, you need to make a name for yourself. From the outside, it is very complicated to work like that. I see people trying to make concessions in Africa complain-ing that it is not easy because we have a massive mix of private and state operation. To the outside world, it is a very complicated thing and therefore, they think Africa it is a country not a continent. What we are trying to do now, since we know both sides, is to build bridges. We are trying to make this connectivity to allow business development to grow. The potential is there. Just in the oil sector, this cable will be used a lot. We have many companies exploring oil in Angola, and in the region,;they are Brazilians, Americans, and Europeans and just from them, we have a potential use to the cable. The connectivity is so long and the cost is so high that it is slowing down the process. When we decrease the length, we can operate a drilling machine in Brazil from here, because the connectivity is very short. We are a growing country that needs to learn a lot and linking that information would be a great deal for us, and another great use for the cable. Therefore, just for us, there is a great potential to use the cable and if we take to other African countries, it will be massive.

WF: How will this technological improvement (SACS) have an impact on the development of Angola?

AN: When we developed the telecom business, we saw an im-provement of the country. We are bringing value to the coun-try, we were able to enable people to communicate. Now, with this new cable, we understand that it is bigger than Angola itself; we will bring value to the continent because we are en-abling people to communicate and the whole country will be part of that. For example, when we build this cable it will be the shortest way on earth to link Sao Paulo stock market with Singapore stock market. We can go from Sao Paulo to the USA, from the USA to London and then to Singapore. However, if you measure it, it will be much longer. That will be the shortest path between South America and Asia. Once again, Europe will be connecting with South America without having to go through the US. In terms of the industry, it will be a completely new way to look at networks in the world. If we look at the configuration of the networks today, it is a redundant path. When we have this con-nection we will have a complete ring of connections. We will have South America, North America, Europe, and Africa closed on a ring, which means that the communication ow will be completely new. AT&T saw our project and told us to go ahead and do it because they will be using for sure.

This ne cable is bigger than Angola itself. e ill bring value to the continent because e are enabling people to com-municate and the hole countr ill be part of that.

,1 5 km submarine fibre optic cable stretching from Luanda to Fortaleza in Brazil

62-63 INTERVIEW Angola Cables-2.-8x10,5.indd 63 14/11/14 16:51

The starting point on Angola needs to be the recognition that it is a post-con ict country hostilities ended in 2002 with large oil receipts 5 percent of exports and 5 percent of budget revenues and near half of D in 20 3 , and faces the opportunities and challenges of both. arge oil receipts have underpinned solid growth, but also make the country vulnerable to oil price volatil-ity. The country’s oil dependency and its large infrastructure and human capital defi cits also undermine competitiveness, hamper diversifi ed growth in the non-oil sector, and make it heavily reli-ant on imports. It has also accentuated income inequalities.

nce con ict ended, Angola’s macroeconomic policy stance was overstretched so that it lacked adequate policy buffers in-cluding foreign reserves to face the global crisis and the country was badly affected. Under an I F-supported program in 200 - 2, Angola made good progress in restoring macroeconomic stabil-ity the exchange rate stabilized, foreign reserves topped seven months of imports, in ation fell to single digits, and the fi scal bal-ance turned into a surplus. ore importantly, the government has moved to strengthen policy formulation and coordination, including the formulation of a medium-term macroeconomic framework that allows it to assess and manage macroeconomic vulnerabilities more effectively. This puts Angola in a much better position than before to face another oil price shock. With macro-economic stability largely restored, the government has been able to turn to its longer-term developmental objectives.

The longer-term prospects for the oil sector are bright. re-liminary explorations in the deep sub-salt fi elds, that geologi-cally mirror those in razil, have been positive. If commercially fruitful, Angola could become the region’s top oil producer with-in a decade; though still early days, there is talk of production reaching 3 million barrels per day. eanwhile, however, pro-duction from existing oil fi elds is leveling off. roduction in 20 3 was a disappointing . million barrels per day and projections for production to reach and surpass 2 million barrels per day in the medium term are starting to look optimistic. A more cau-tiously realistic picture would be for output to edge up to around .85 million barrels. This implies that the oil production will add

little to overall growth, though oil revenues will continue to un-derpin growth in the rest of the economy.

erhaps more important to Angola’s longer-term stability and prosperity is what happens in the non-oil sector. The presidential elections in 20 2 highlighted the need for diversifi ed and inclu-sive growth to spread the benefi ts of the country’s oil wealth more

widely. Following the elections, the government has embarked on a medium-term National Development lan ND that puts pri-ority on a large expansion of infrastructure spending transport, water, and electricity to support economic diversifi cation.

The large expansion in capital spending is critical for economic growth but also poses risks. The government is projecting a high growth dividend that may fall short of expectations, and will need to manage spending carefully to ensure good value for money and that the economy is not destabilized. indful of the destabilizing experi-ence before the global crisis, the expectation is that the government will err on the side of caution. However, the fi scal expansion also comes at a time of softening oil revenues that have already deterio-rated the fi scal balance by 0 percent of D over the past years, pushing it back into defi cit in 20 3. oreover, to meet the plan’s large fi nancing needs, the government is embarking on substan-tial domestic and foreign borrowing, including a possible sovereign debt issue. ut at the same time, the government is also shifting re-sources from foreign reserves into the new Sovereign Wealth Fund that is geared more towards long-term investments than to liquid assets that could serve a stabilization role should oil revenues fall.

THE VIEW FROM HERE

ANGOLA’S ECONOMY: GROWTH PROSPECTS BRIGHT, DECISIVE ACTIONS NEEDED

By Nicholas Staines IMF’ representative in Angola

a co acio al e gola offi ce in Benguela

Angola THE VIEW FROM HERE 64

64-65 THE VIEW FROM HERE-V3-8x10,5.indd 64 14/11/14 16:16

A D , C NT CHAN

I

N N- I

C I, C NT CHAN ,

20 UD T NA UN I F S T

20 3

5. 8.8 .8 3. 5.. 3

2. .5 - . -3.5 2.-0.33

.5 . 0.8 .3 .3.5

.0 8.0 . . .2.

20 3 20 320 20 20 5

ut with foreign reserves above US$30 billion, or about a year’s worth of non-oil imports, the government has room to maneuver.

eanwhile, the business environment remains difficult. An-gola ranked poorly on the latest World ank’s Doing usiness in-dex out of 8 though it was also rated amongst those that had most improved. usiness complaints include difficulties deal-ing with a centralized and bureaucratic government administra-tion, acute shortages of skilled labor, poor infrastructure, limited access to finance, and slow judicial processes. uch of this is a legacy of Angola’s post-con ict history, exacerbated by high, oil-fueled demand; effectively a function of delayed development that would find an echo elsewhere in the region. Improvement in these areas is critical, but progress - at best expected to be slow - is hampered by limited institutional capacity. And addressing the human capital shortfall could take generations. ut what is per-haps most needed is a determined political assault to implement the structural reforms required to remove the blockages in the business environment. There are also other elements –expatriate labor quotas and tariffs to encourage nascent domestic production – that re ect the understandable political desire to give preference to Angolans, but that also make doing business more complicated.

Continued macroeconomic stability, the successful imple-mentation of the infrastructure program, and decisive action on

the structural reforms needed to enhance the business climate would go a long way to support economic diversification. This, in turn, would support more inclusive growth to spread the benefits of the country’s oil wealth. High poverty rates and income inequal-ities are potentially destabilizing, especially once memories of con-

ict wear off. And some provision is needed to take care of the poor and vulnerable; currently, the country lacks effective social assis-tance to protect them. Instead, large fuel subsidies used for both transport and private power generation provide the main conduit for distributing oil revenues though, as elsewhere, the poor benefit disproportionately little. The government is committed to reducing the subsidies to finance other spending priorities but is concerned about the impact on business and the vulnerable segments of the population. Improving electricity services will alleviate a large part of this concern. To protect the vulnerable, the government is also implementing a social assistance program based on direct cash transfers, but this too will take time to build up.

reliminary government estimates are that overall output in 20 3 was .8 percent, driven by a large agricultural rebound fol-lowing the drought in 20 2. The I F now projects real growth in 20 to moderate to percent because of a large but temporary drop in oil production during the first half of the year but should then recover to percent in 20 5 as oil production recovers. ver the medium term, we can envisage non-oil sector growth trend-ing up to around 8 percent, but modest oil production growth will hold overall growth down to around percent.

Under an IMF-supported program in 2009-12, Angola made good progress in restoring mac-roeconomic stability: the exchange rate stabi-lized, foreign reserves topped seven months of imports, inflation fell to single digits, and the fiscal balance turned into a surplus.

About the author: Mr. Staines has been the IMF’s representative in Luanda for the past three years. He has been an IMF staff member for 15 years, work-ing mostly on African countries. Prior to joining the Fund, he worked in the private sector as a macroeconomic modeler, forecaster and consultant. He previously spent several years as an academic teaching macroeconomics and finance. e holds a Ph.D. specializing in Finance.

AC ASSU TI NS, 20 3-

Source: International Monetary Fund

The above chart compares the macroeconomic assumptions behind the government´s 2014 budget with data from the Banco Nacional de Angola and projections from the International Monetary Fund-

THE VIEW FROM HERE Angola65

64-65 THE VIEW FROM HERE-V3-8x10,5.indd 65 14/11/14 16:16

From independence in 1975 until the present, the Ango-lan economy has been dominated by the in uence of oil pro-duction and exports, which have accounted for 0 of D , particularly in the most intense years of the civil war, when agriculture, trade, transport, construction and manufacturing were almost nonexistent.

Although, after the end of the civil war 2002 , it was possi-ble to invest heavily in other sectors, particularly in basic infra-structure public investment between 2002 and 20 3 amounted to $ .5 billion , the process of diversifi cation of the national economy, in which the government, the business sector and the banking system are engaged, did not give tangible results. The oil sector continues to dominate the economy, with a relative weight of between 3 and of the ross Domestic rod-uct. Moreover, this dominance also occurs in other indicators such as tax revenues those originating in petroleum repre-sented over three fourths of total tax revenues in 20 3 , export revenues 5 of the total exports and international reserves. However, the tax realm has begun to show noticeable signs of diversifi cation, registering increases in other sources of budget revenues fi scal revenues from the non-oil sector as a result of the Tax eform rogram T that is taking place.

In the macroeconomic area, results have been more sig-nifi cant and sustained, but other aspects are equally relevant. The communiqu issued by the onetary olicy Committee of the National ank of Angola on anuary 2 , 20 regarding the results of 20 3, rightly recognizes these developments stabil-ity of the foreign exchange market; a .3 increase in credit to the economy, with a global amount in 20 3 of $33 billion; an in ation rate of . in 2002 it was 05. , representing a safe path to price stability; and interest rates of .5 and 3 for maturities of 3 and 2 months, respectively. The exter-nal position of the Angolan economy, measured by the stock of net international reserves and its dynamics of average annual variation is quite good $30. billion at the end of 20 3 and an average annual growth rate of 2 .8 , representing roughly nine months of imports of goods and services.

The national economy has benefi ted from a number of positive factors and motivators for its growth. These include not only the economic policy measures implemented under government programs –it is in the process of implementing the National Development lan 20 3-20 , pending the results

from 20 3 – but also factors of an external nature upward movement of demand and prices in the international oil mar-ket; increasing trade relations with the most important and dynamic emerging economies and domestic support, as re- ected in the provision of funds by the banking system and the

State to fi nance private investment.Despite these conditions, the Angolan economy continues

to suffer from structural defi ciencies that the banking system has tried to alleviate by assisting and supporting the correct formulation of investment projects that are bankable. The lack of competitivity of practically the entire non-oil economy is widely acknowledged, not only by international institutions according to the Doing usiness World ank, Angola has

consistently occupied the lowest place in the world ranking in several items , but also by national institutions designed to support growth. The latest evidence of this lack of competi-tiveness was given by the postponement, once again, of Ango-la’s request to join the Free Trade Area of the Southern African Development Community SADC .

Manuel José Alves da Rocha

THE VIEW FROM HERE

ANGOLA’S ECONOMY: ENCOURAGING MACRO NUMBERS, CONTINUING POVERTY

Angola THE VIEW FROM HERE 66

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According to existing data, D should have grown at the average annual rate of 3.3 between 200 and 20 3, much lower than the approximately 0 growth in the 2002 2008 period. y 20 , the average annual economic growth rate - according to the I F - should be around 5.5 , which does not allow significant improvement in the living conditions of the population the population growth rate according to the National Statistics Institute, IN , is 3.2 per year .

il exports continued to be one of the most important factors of economic growth in 20 3, with a contribution of just under 2 percentage points to the growth rate of . of D , despite the decrease between 20 2 and 20 3. Ac-cording to the elat rio de Fundamenta o do 20 a background report that accompanies the government

budget , the value of oil exports in 20 3 was $ 5. 2 bil-lion dollars, compared to $ 8. 0 billion dollars in 20 2, a percentage decrease of 5. .

ne of the obstacles to a greater diversification of the economy and the creation of a structural competitivity has-

been the energy sector. The government is in the process of implementing an ambitious program of production and supply of electricity about $ billion by 20 - involving productive activities and families - which is expected to yield significant results for the living conditions of the population and the reduction of production costs in the economy.

D per capita has increased since 2002, reaching a value of $ ,3 5, for a total value of economic activity of nearly $ 22 billion in 20 3. However, Angola remains among the countries with a low level of human develop-ment, according to the United Nations; the national average monthly salary in 20 2, according to the National Accounts, was only 3 ,000 kwanza, equivalent to about $3 0. The ini index, which measures inequalities in income distribution, is 0. and has worsened since 2002. According to an official survey on the living conditions of the population, conducted in 2008 200 , about 0 lived on less than two dollars a day and 0 of the national income was concentrated in the hands of 20 of the population. The poverty rate officially presented 3 is very controversial, given the actual liv-ing conditions of the population, especially in rural areas, where income differences are much more pronounced.

About the author: Manuel José Alves da Rocha, an Angolan economist, is associate professor at the Catholic University of Angola and Director of its Center for Studies and Scientific Research (CEIC). He is the author of 15 books on the economic and social reality of Angola and sub-Saharan Africa, the most recent one on capital flight from the region.

From independence in 1975 until the pres-ent, the Angolan economy has been domi-nated b the influence of oil production and e ports, hich have accounted for of GDP, particularly in the most intense years of the civil ar, hen agriculture, trade, transport, construction and manufacturing were almost nonexistent.

Banco Nacional de Angola headquarters in Luanda

THE VIEW FROM HERE Angola67

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AGRICULTURE: SWEET ENERGY FROM SUGAR CANE

Spreading out to the horizon below the towering Black Rocks of Pungo Andongo in Angola´s northern province of Malanje, tens of thousands of acres of sugar cane reach toward the sky as they ripen under the tropical sun. If all goes according to the ambitious plans of investors, these bright green plants will soon help kick-start a reborn Angolan sugar industry. Part of the har-vest will be turned into ethanol and pro-vide biomass to produce much-needed electrical power for local residents and industry.

Begun three years ago, the 100,000-acre farm - said to equal in size the New York City boroughs of Manhattan, Brook-lyn and the Bronx - is already being de-scribed in superlative terms as the coun-try’s largest agricultural project and its biggest renewable-energy development.

The first harvest by the Angolan Bio-energy Company, known as Biocom, is scheduled for this year, with 40,000 metric tons of processed sugar destined for the domestic market. Angola, which once produced enough of the sweetener to fulfill its own needs and also export some, currently imports all the sugar it consumes.

As sugar output steadily increases, Biocom executives hope for an annual production target of 260,000 tons within four years, easily surpassing the 225,000 tons the country now imports from for-eign suppliers. If world prices allow a good return on investment, Angolan

sugar will join oil, minerals and other re-sources once again on the export market.

However, Biocom’s $500 million in-vestment, located 200 miles east of the capital is not just about sugar. Eventually, the company plans to convert 15 percent of production into 30 million liters of eth-anol a year. If all goes well Angola could one day joining Brazil and the United States as a top producer of the renew-able, eco-friendly fuel that is being used increasingly around the world.

Biomass-fed generators will also pro-duce 28 megawatts per hour of electricity that will be pumped into the province’s power grid to benefit rural residents and local industry.

JOINT-VENTURE COOPERATIONBiocom is as prime example of Angola’s innovative take on boosting its agricultur-al sector and renewable energy produc-tion while creating technology jobs in the country’s interior. It also also re ects the country’s efforts to foster public-private cooperation in joint ventures.

Angola’s National Private Investment Agency and state-run Sonangol Holding have 20 percent of the company, while the country’s Damer and Brazilian conglom-

Like other oil-rich nations, Angola has long neglected its farm sector, to such a degree that 90 percent of the food the country consumes is imported. Matters were made worse by the civil war, which left a legacy of damaged infrastructure and land mines scattered across the countryside. The farm sector is now undergoing a rebirth, thanks to public-private partnerships and cutting-edge technology. By Benjamin Jones

“ANGOLA IS BLESSED WITH ABUNDANT WATER

AND A CLIMATE AND RICH SOIL PERFECT FOR BOTH TROPICAL AND SUB-TROP-

ICAL FARM PRODUCTS.”

68Angola AGRICULTURE

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erate Odebrecht hold 40 percent each, with the latter playing a key practical role in getting the project off the ground.

Dozens of Biocom technician trainees traveled to Brazil to learn all there was to know about processing sugar and turning it into ethanol and electrical energy, an activity in which Odebrecht has long been involved.

Their six-month course included theoretical and practical classes taught by the Brazilian experts, covering everything from mechanized harvesting and sugar cane storage to the finer points of biomass energy production and ethanol use.

This mammoth project is a prime example of the Angolan government’s

multi-faceted plan to open up the coun-try’s interior to economic activity, increase agricultural production, promote alterna-tive exports to wean itself off the almost total reliance on extractive industries for foreign exchange and create employment.

Experts say Angola has an excellent chance at meeting all those goals, due to several important factors including the country’s natural attributes and its history as a major agricultural producer.

Angola is blessed with abundant wa-ter and a climate and rich soil perfect for both tropical and sub-tropical farm prod-ucts. The country has 140 million acres of arable land and the southwest plateau

affords rich grazing areas for cattle and other livestock.

ANGOLA AS A MAJOR AGRICULTURAL PRODUCERThe experts also note that during colo-nial times the country was a major pro-ducer of sugar, coffee, cotton, rubber, sisal, corn, potatoes, beans, cassava, peanuts and a wide variety of fruit for both the domestic and export markets. In those days, Angola only had to import wheat, as it was self-sufficient in every other major food crop.

But then came the chaos of the inde-pendence struggle, Portugal’s abandon-ment of its African colonies and, in An-


71 AGRICULTURE Angola

ANGOLAAGRICULTURE

has made a concerted effort to correct the situation and put Angola’s agricultural sec-tor back on its feet.

Flush with its billions of dollars in an-nual petroleum income, the government is pouring vast fi nancial resources into up-grading or creating new rural infrastruc-ture, including roads and bridges to im-prove market access for farmers. It is also providing training programs for rural resi-dents in farming, animal husbandry, soil treatment and irrigation training programs while establishing agricultural study and research centers.

This year, authorities also moved to raise farm productivity and reduce the country’s dependence on food imports, which make up some 90 percent of all food consumed. New import duties were lev-ied on a range of food items such as eggs, fruits and vegetables.

Angolan trade offi cials say they hope the measures will slowly lower food costs, especially for the two-thirds of the popula-tion who live on less than two dollars a day, and go a long way towards slashing the country’s annual food import bill which is estimated at around $5 billion.

At the local level, government offi -cials and Angolan and foreign experts are giving small farmers a hand up through a variety of programs funded domestically and internationally.

Agricultural processing plants such as grain mills and juice production fa-cilities are being set up, as are agri-busi-ness training programs and micro-credit schemes. With the beginning of each growing season, central government au-thorities and provincial offi cials purchase and distribute vast amounts of starter sup-plies for small landholders.

gola’s case, a decades-long and devastating civil war which ended just a dozen years ago.

In the con ict, much of the country’s transport and other infrastructure were heavily damaged. easants ed to the safety of the cities in an unprecedented internal migration estimated to have affected four million people, or a third of the population. Even worse, an estimated 10 million landmines were planted around Angola.

The government’s wrong-headed agricultural policies didn’t help matters. As Portuguese farmers and traders returned home with independence, pro-ductivity plunged. In response, authorities set up state farms, much like Soviet collectives. However, these also proved unproductive and vast swathes of farm land were turned over to the peasants.

Since peace was declared in 2012, the govern-ment, with both public and private foreign assistance,

THE GOVERNMENT IS POURING VAST FINANCIAL RESOURCES INTO UPGRAD-ING RURAL INFRASTRUC-TURE TO IMPROVE MAR-KET ACCESS FOR FARMERS


Depending on the province and its special needs and climate, these could include thousands of tons of seed corn, beans, sorghum, fertilizer, pairs of oxen and other livestock as well as tens of thousands of farm im-plements such as hoes and ploughs.

For example, officials in Ben-guela province are working to trans-form it into the country’s biggest production center for tomatoes and bananas through training schemes and massive investment to upgrade local irrigation systems.

At the same time, more than a doz-en agricultural development centers are being established for this year’s growing season with starter supplies being provided to some 100,000 peas-ant farmers and their families.

Land mines are also being cleared. With foreign financing and guidance, Angolan teams are disarm-ing and destroying land mines litter-ing the countryside. Apart from the danger they represent, the mines also hinder the planting of crops and graz-ing of livestock.

TARGETING NEEDSIn another agreement highlighting co-operation between Angola and foreign and multinational organization part-ners, Brazil and the Food and Agricul-tural Organization of the United Na-tions (FAO) are targeting the need for agricultural and veterinary research.

Under the terms of the deal signed this year, more than 100 Ango-lan researchers will receive technical and short-term training at the Brazil-ian Agricultural Research Corpora-tion, as part of the $3 million program.

“The availability of highly quali-fied researchers and innovators who understand the complexity of devel-opment challenges is key to making great strides in agriculture and food security in Angola,” said FAO Assis-tant Director-General for Technical Cooperation Laurent Thomas at the time the program was launched.

Also active in Angola is the U.N. Industrial Development Organization, or UNIDO, which has launched a proj-ect to rehabilitate Angola’s agricultural machinery manufacturing industry, one of the sector’s most basic activities.

efore the civil war, five local firms were major contributors to ag-ricultural production by manufactur-ing farm tools and implements for the individual farmer but are now largely dormant.

In its bid to jumpstart the indus-try, UNIDO is engaged in pilot proj-ects such as replacing machinery, providing spare parts for existing machinery, raw materials and prod-uct components and manufacturing consumables.

There is also assistance in mar-keting the finished products, technical knowhow, mechanical engineering, machine tool electronics, induction furnaces and business management.

COFFEE AS AN EXAMPLECoffee alone is an excellent example, not only of Angola’s agricultural heri-tage, but of the current challenges facing the sector, its tremendous po-tential and the opportunities for for-eign investors.

Coffee beans were a major source of revenue for the colony before inde-pendence, when Angola was the third largest producer in the world. But just four years ago, coffee growing accounted for only 0.6 percent of the total area under production.

Angola’s robusta beans are highly prized by traders and consumers alike and are used primarily in espressos, the most popular brew of choice in hip coffee shops around the world.

ut Angolan officials are also keen to expand Arabica coffee pro-duction in Huambo province where hundreds of acres of greenhouses have been built and tons of special fertilizer are distributed.

In one promising case of foreign involvement in the coffee industry, a Vietnamese company which is the largest robusta producer in the world has signed on to a ten-year project

to rehabilitate and restore almost 250,000 acres of coffee plantations. Funding is being provided through a credit line from Brazil.

Although it shares linguistic and cultural ties with Angola, Brazill isn´t the only player; U.S., Canadian, Portuguese, Spanish and Japanese investors are backing agri-business projects around the country, while the ubiquitous Chinese are involved in a rice-growing scheme in Kuando Kubango province.

MAJOR POTENTIAL All this effort appears to be paying off, according to a recent World Bank report.

Agriculture, which employs two-thirds of the Angolan la-bor force, has posted respectable growth rates over the past several years despite a slight downturn trig-gered by a drought in 2012 that cut the yields of many food crops in ten of the country’s 18 provinces.

The World Bank describes the sector as having significant poten-tial,” but cautions that challenges remain.

“Improving the productivity of the agricultural sector is critical to reducing poverty,” the World Bank report said. “However, less than 30 percent of Angola’s arable land is cur-rently under cultivation and per-acre productivity is among the lowest in the region.”

The bank said Angola’s recent efforts to facilitate access to markets through improvements in infrastruc-ture in rural areas have improved ag-ricultural output, with crop produc-tion in Angola growing faster than the regional average. However, it coun-seled that much remains to be done to raise the country’s agricultural productivity to the level of its regional competitors.

IMPROVING THE PRODUCTIVITY OF THE AGRICULTURAL SECTOR IS CRITICAL TO REDUCING POVERTY, ACCORDING TO A WORLD B ANK REPORT ON ANGOLA



Sin título-6 1 11/14/14 11:35 AM

Angola CHINA IN ANGOLA 74

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Following independence and its emer-gence from the grip of a 27-year civil war in 2002, Angola was as much in need of foreign assistance to rebuild as any other young African nation. In the late 1970s, when the colonial powers were performing a gradual withdrawal from the old continent amid a clamor for independence that was reaching fever pitch, few African countries were looking to the East for partnership op-portunities. But at the same time China was experiencing steady GDP growth on the back of vast public spending commitments, while simultaneously entering the international markets in a variety of sectors. The opportunity was apparent: oil-rich Angola faced the task of rebuilding a national infrastructure devastated by con ict; industry-heavy China needed to be powered.

This led to the widening of economic and political ties throughout the following decade. In 1984, Angolan Foreign Trade Minister Ismael Gaspar Martins travelled to eijing to sign the fi rst ilateral Trade Agreement between the two countries. A Joint Economic and Trade Commission followed in 1988. Cooperation between the two countries expanded to the extent that in 2010 bilateral trade stood at more than $120 billion, making Angola China’s largest trade partner in Africa.

At the same time, Angola became Chi-na’s largest source of oil, which the People’s Republic reciprocated with massive loans for infrastructure and development. The agreements signed between the nations stipulated that 70 percent of development projects in Angola be awarded to Chinese companies. The China International Fund (CIF), a private company based in Hong Kong, is at the forefront of Angola’s devel-opment drive. However, former Minister for Economic Coordination Manuel Vi-cente told the Financial Times in 2012, that the CIF was completely detached from the estimated $10billion oil-for-loans deal be-tween the two countries from 2004 to 2010. Vicente, now Angola’s Vice President, was CEO of Sonangol, Angola’s state oil com-pany, until his appointment to the Cabinet on September 26, 2012.

The bulk of Chinese lending to An-gola has been carried out by the Export-Import Bank, a state-owned entity. The loans are repayable over 17 years, a much better deal for Angola than simi-lar credit lines offered by European lenders, which demand repayment within four to fi ve years. Although the credit lines were fi rst extended to help Chinese companies investing in Angola, these soon were able to branch out on their own and signed a combined total of $22 billion in contracts in 2009 alone.

“Angola is a credible partner,” Chi-nese Premier Li Keqiang, told reporters during a two-day visit to Angola in May, 2014. “Angola has the biggest Chinese community and number of companies from China in Africa.”

Through Sonangol, CIF’s involve-ment in Angola has led to billions of dollars of investment in roads, infra-structure, and construction, includ-ing of hospitals and schools. The vast majority of these projects are carried out by Chinese companies, which pre-fer to import their own workers rather than hire locally. This has led in turn to conflict, with Chinese companies occasionally the target of hostility from Angolans. But it is also a signal of China’s commitment to Portuguese-speaking countries. In response to tensions created by drafting in Chi-nese workers for jobs Angolans are perfectly capable of doing themselves, Sonangol has now imposed limits on the number of foreign workers that can be on its payroll; it seems likely that others will follow suit.

THE OPPORTUNITY WAS CLEAR: OIL-RICH ANGOLA FACED THE TASK OF RE-BUILDING ITS NATIONAL INFRASTRUCTURE; INDUS-TRY-HEAVY CHINA NEED-ED TO BE POWERED.

WIN-WIN PARTNERSHIP OR MARRIAGE OF CONVENIENCE?

CHINA IN ANGOLA:

CHINESE COMPANIES, BANKROLLED BY A GENEROUS PROGRAM OF GOVERNMENT FINANCING, HAVE MADE GREAT INROADS IN ANGOLA, WHICH CHINA VALUES AS A SOURCE OF OIL AND A MAR-KET FOR ITS EXPORT GOODS. MORE THAN 500 COMPANIES AND 100,000 WORKERS BEAR WITNESS TO CHINA’S GROWING INFLUENCE IN ANGOLA. HOWEVER, THEIR BUSINESS AND LABOR PRACTICES HAVE OFTEN MADE FOR AN UNEASY FRIENDSHIP.

By Rob Train

WIN-WIN PARTNERSHIP OR MARRIAGE OF CONVENIENCE?

CHINA IN ANGOLA Angola75


In late 2013, Chinese Deputy Premier Wang Yang announced, at the Fourth Forum for Economic and Trade Cooperation be-tween China and Portuguese-speaking countries, that a new raft of credit lines would be opened and economic and development zones set up wherever they were desired. The Forum was inau-gurated in 2003 and is based in Macau, Portugal’s former trading outpost in the China Sea. Trade between China and the Forum’s member nations -- Angola, Brazil, Cape Verde, Guinea-Bissau, East Timor and Mozambique, reached $128.8 billion in 2012, and $ 8.5 billion in the fi rst three quarters of 20 3.

In Angola, the presence of Chinese companies has been steadily expanding, resulting in the creation of a services center by the Chinese Chamber of Commerce in Angola (CCCA) this year. It is estimated that there are around 500 Chinese businesses in Angola, employing some 100,000 ex-patriate Chinese nationals. The center’s mission is to ease visa problems faced by workers and facilitate permits for Chinese enterprises.

Among the members of the CCCA are ZTE Corporation, Huawei, Sinosteel Corporation, China Petroleum & Chemi-cal Corporation (Sinopec), China National Overseas Engi-neering Corporation (COVEC) and the China State Ship-building Corporation (CSSC).

Of these, telecoms equip-ment manufacturer Huawei stands out for its expansion pro-gram in Angola, which encom-passes a vast roll-out of digital connectivity across the country to grant 18,000 young Angolans access to the internet, as well as providing online resources for schools. It is estimated An-gola currently has around 19 percent internet penetration, a much higher figure than the continent-wide average.

Also present on the ground is the China International Trust and Development Corporation (CITIC), which has been responsible for some of the keystone development projects undertaken in Angola, such as the Kilamba Kiaxi social hous-ing area 18 kilometers outside of the capital, Luanda. CITIC is also

behind the Angola National Tourist Area Project, which aims to capitalize on the prospects inherent in the country’s rich but not fully exploited tourism offer.

A signifi cant part of the task facing the Angolan tourism industry is the fact that large swaths of the country outside Luanda remain all but inaccessible to foreign visitors. That is where CITIC has focused its efforts. Earlier this year, Chinese Ambassador to Angola Gao Kexiang paid a visit to southern Angola to see for himself the effort being made to complete the Moçamedes Railway project, which aims to extend the line in southern Angola from Menongue to Cuito Cuanavale to connect with the Eastern Transversal line that links the Democratic Republic of the Congo with Namibia, and could help to boost tourism in Angola.

Contained within Angola’s borders are soaring peaks, dense tropical rainforests, white sand beaches and vast, open plains. The allure of Angola’s natural resources is seen as a key driver of the country’s economic resurgence. In 2002, when the civil war fi nally ended, tourism receipts in Angola were zero. But after just a few years the country witnessed an in ux of visitors, drawn to the exceptional beauty of the country. Currently, the tourism industry employs some 50,000 Angolans, but there is a chronic lack of hotel beds. Little won-der, then, that the tourism industry has turned to Chinese ex-pertise to bridge that gap.

Construction of the fi rst four-star hotel in ndjiva, the capital of Cunene province, was undertaken by Chinese company Guangdong Group Ltd., in cooperation with Ango-lan fi rm S Constru oes. The ricila hotel was constructed at a cost of $14 million dollars and has 64 rooms and several suites. But that’s just the tip of the iceberg. Angola has a rare and exquisite tourism offer, which encompasses the best of the African continent in a single country. It’s clear that there’s a goldmine to be tapped.

THE PRESENCE OF CHINESE COM-

PANIES HAS BEEN STEADILY EXPAND-

ING, RESULTING IN THE CREATION OF

A SERVICES CENTER BY THE CHINESE

CHAMBER OF COMMERCE IN ANGOLA

(CCCA) THIS YEAR.

Chinese Premier Li Keqiang met with Angolan President José Eduardo dos Santos during a visit by the former to Angola in May, 2014.

Foto

: Est

elle

Mau

ssio

n

Angola CHINA IN ANGOLA 76


TCUL is Luanda’s public transit company, with 40 bus lines within the province of Luanda. TCUL also runs services between Luanda and various points throughout the country - namely, Benguela, Sumbe, Malange, Uíge, Huambo and N’Dalatando. With upgraded vehicles, more routes and better customer services, we aim to get Luanda going from A to B more efficiently, quickly and safely than ever before.

TCUL also engages in the business segment of sales of advertising space on buses. This far-reaching and impactful business enables individuals and organizations to publicize their businesses, brands, products, services, etc., on the interior or exterior of the bus.

Moving Luanda forward

5º Avenida - Cazenga - Cx. Postal 14211Luanda / República de Angola

In Luanda alone, the current shortfall in hotel beds is es-timated to stand at 3,000. “This situation is expected to im-prove in coming years with the opening of a number of new hotels,” ANIP stated earlier this year.

Chinese companies do not just provide the infrastructure for increased tourism. They, along with other foreign nations sending expatriates over, particularly Portugal, provide a ready-made middle class able to take advantage of the new routes and hotel offers. Much of the population of Angola, as in so many other emerging African nations, lives on roughly two dollars a day, so the middle-class is augmented by itinerant workers on higher wages. While that might not sit well with Angolan unemployed, the fact remains that other than remit-tances, much of the money earned by Chinese and Portuguese workers goes straight back into the Angolan economy. It is not ideal – a vast in ux of foreign workers into an alien coun-try is rarely a recipe for cordial relations – but in the case of the Chinese, integration is steadily becoming the rule, rather than the exception. In some countries – Dubai, notably, and also Zambia - foreign nationals live in compounds and do not interact with the people of their host country. But in Angola, Chinese guest workers have already branched out into fields other than big construction projects.

On the streets of Luanda, it is not uncommon to hear Chinese street vendors hawking their wares, or to see signs offering traditional oriental massages. Chinese real estate en-trepreneurs, retail salespeople and shop owners also abound.

ut in turn, concerns over the in uence – and indeed An-gola’s self-perpetuated reliance on Chinese loans – has also had the middle and upper classes peering over their broadsheets with mild concern. In the past two years, several contracts that were initially to go to Chinese companies have been given to Indian, Brazilian, American and European companies. While China remains, and is likely to remain, the country’s main eco-nomic partner, the government of President José Eduardo do Santos has strengthened diplomatic and security ties with the United States, Europe, Brazil and other Asian powers, such as India, according to a TradeMark Southern Africa report. The same study notes that US firms such as Chevron employ Ango-lans to staff their plants, in contrast to the Chinese policy.

Is China’s in uence in Angola sustainable iven China’s dependence on oil from Angola and the importance the Afri-can country has for Chinese exports, the union looks set to be a lasting one. But with other countries taking a far from altru-istic interest in Angola’s natural resources, China will have to pull out all the stops to maintain its pre-eminence.

CHINA IN ANGOLA Angola77


78Angola LAND MINES

Dozens of casualties were registered last year in Angola in a war that has no soldiers -- the battle the country’s past stub-bornly insists on waging against its future. Long after the civil war that devastated the country from 1975 to 2002 came to an end, land mines continue to claim new victims – there were 89 confirmed in 20 . eanwhile, government and international organizations work to remove this threat to life lying just below the soil the country needs to develop its agriculture, transpor-tation and infrastructure.

xperts give a conservative figure of 0 million mines plant-ed throughout the country during the civil war, or one for every two Angolans. Because anti-personnel mines are designed to wound and maim rather than kill the victim, it is tragically com-monplace to see some of the country’s 70,000 or so amputees as just another component of the urban landscape.

In the aftermath of the con ict, Angolans have taken on primary responsibility for dealing with this situation. Ac-cording to government figures, between and 20 3,a total of 2,833 anti-personnel mines were cleared, 2 , anti-tank mines neutralized and about 2.7 million explosive devices recovered. As of 2014, some 7,000 square kilometers of land had been cleared of mines.

The first attempts at de-mining took place between 1994 and 1998, during the lull in fighting between A opular

ovement for the iberation of Angola and UNITA National Union for the Total Independence of Angola forces. During that interval, the short-lived coalition government established

By Robert Latona

LANDMINESTHE CIVIL WAR’S LETHAL LEGACY

our decades of conflict left Angola ith the unenviable title of the most land-mined countr in the orld. The government, aided b international organizations, has been orking to remove this threat hich, apart from having tragic conse uences for individuals, has also been an obstacle to economic development.

78-81 Land Mines-8x10,5.indd 78 11/14/14 3:24 PM

79 LAND MINES Angola

A R S AR S R R-T AT A CT A S, SA S U. . T R RA A STRAT R C AR . T

A R T S T C S T UCAT A UT R S .

ANGOLALand Minesthe National Demining Institute INAD , which

continues to have primary responsibility for identifying and locating mine emplacements, as well as training and supervising brigades of sappers tasked with neutralizing them. The insti-tute is also in charge of programs for educating people about the dangers of unexploded mines.

INAD is a linchpin component of a larger pol-icy-making entity, the CNIDAH, or National Inter-sectorial Commission for Demining and Humani-tarian Assistance, on which the Armed Forces and ministerial bodies are represented. CNIDAH sees to the strategic planning, mobilizes resources get the job done, and evaluates the outcome. Its broad-er remit also includes supervision of social rein-tegration and humanitarian assistance programs aimed at mine victims.

CNIDAH also coordinates with those for-eign governments playing an essential role in helping Angola deal with its mine problem. Among the most generous is Japan, which granted nearly $ 00 million last year to fi nance clearing in oxico -- the southeastern province that vies with neighboring Cuito Canavale as the country’s most mine-infested region.


80Angola LAND MINES

Among the questions raised during rince Harry’s visit was whether the govern-ments responsible for this state of affairs be held accountable.

art of the problem is that just about everyone was respon-sible: both of the principal Angolan factions in the civil war, along with their foreign sponsors -- the United States, Soviet Union, Cuba, ortugal,

aire, China and South Africa -- but it was Cuban occupa-tion forces that first employed mines on a massive scale to isolate the towns, military in-stallations and power plants under their control.

As the con ict dragged on, however, those mines were increasingly used as an offensive weapon against civilians to deny them access to their food crops, firewood and livestock. Creating a cli-mate of terror worked well enough as strategy: people

ed one of Africa’s most fer-tile countrysides to seek ref-uge in a handful of big cities that today are home to of the population. oads, rail-ways and bridges -- so essential for domes-tic commerce and so neglected by Angola’s former colonial rulers -- were seeded with anti-tank mines, making them the priority for ongoing clearance campaigns.

A SLOW AND DANGEROUS PROCESSDetecting mines is a cumbersome, labor intensive and slow process -- and, at the risk of stating the obvious, an exceedingly dangerous one. Only the Cuban forces who supported the A bothered making maps of the minefields they created, so just know-ing where to start, comes down to surveying

WOMEN AND CHILDREN OFTEN THE VICTIMSOne of the greater tragedies of the landmine saga is that the victims, more often than not, are women and children.“Women and girls are disproportionately affected by land-mines, notes United Nations Development rogram Ad-ministrator Helen Clark. They have different needs when it comes to education about risks and different challenges when they or a family member is killed or injured.”To bring that point home, the government sponsored a gala in 2008, in which contestants from each of the country’s 18 provinces vied for the title of iss andmine Survivor at Luanda’s trendiest nightspot. The event’s motto was “Ev-eryone has a right to be beautiful,” and a selection of photo-graphs of the contestants later toured in oland and Norway.

Additionally, at least 8,000 of the 70,000 amputees were children at the time that their limbs, sight or hearing were taken from them, victims of their own innocent curios-ity about the objects deliberately planted near fresh water sources, shady groves and other soft targets with no military justification whatsoever.

As in some other countries, notably Zimbabwe and ozambique, an undisclosed percentage of Angola’s mine-

related casualties are self-in icted. Throughout Africa, it is widely and wrongly believed that a substance called red mercury can be recovered from mines and other unexploded ordinance: terrorists are supposed to pay cash over the coun-ter for it, because it’s used to enrich uranium for nuclear bombs or cover stealth aircraft with a paint that renders them invisible to radar. The only drawback is that red mer-cury doesn’t exist -- not in nuclear devices or anywhere else, but especially not in unexploded landmines.

INTERNATIONAL NGOS DO THEIR PARTThe presence of international N s and donor groups in An-gola goes back to the parenthetical peace interval from 1994 to 8. Foremost among them are the ines Advisory roup

A ritain which lost one of its members in an explo-sion in Angola in 1997 - the same year it was proclaimed co-winner of the Nobel eace rize. Also active are g en-schen gegen inen eople against ines ermany and the Scotland-based HA Trust.

The latter organization owes much of its high public profile to Diana, rincess of Wales, whom HA hosted on her 1997 visit to Angola. The media-savvy princess knew that photographs of her chatting with a victim or holding a recov-ered mine in her hands would be plastered on front pages all over the world, calling attention to Angolans’ plight, as in-deed they did. Her visit also helped pave the way over some politically rough terrain towards Ottawa, where a treaty out-lawing the manufacture, storage and use of anti-personnel mines came into force in 1999.

In August, 20 3, it was Diana’s son, rince Harry who ar-rived in Angola on a four-day visit to confer with demining teams sponsored by the HA Trust and reaffirm his family’s support for the cause that stirred his mother’s passionate con-cern. He was told about the landmines and other explosive de-vices that HA experts have been locating and putting out of business at an average rate of 0 per month over the past five years. ut many more are still out there; the five provinces where HA operates contain 553 confirmed minefields.


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sites where casualties have already been recorded and adopt-ing the mentality of an individual who plants death traps with-out regard for who the victim may be.

Nowadays, mines are made almost entirely of plastic in order to thwart conventional metal detecting probes. Israeli re-searchers, however, have come up with a method of scanning from the air to detect variations in the nitrogen content of the soil that would indicate the presence of mines. And scientists in the United States are achieving promising results with ground penetrating radar, but, sadly, such equipment is still a long way in Angola’s future. Technology will never be enough- Skill, along with an inordinate amount of luck and personal courage are all that Angola’s 7,000 trained mine removal technicians have at their disposal. That, plus a sharp-edged garden trowel.

A skilled, trained sapper may need an hour or longer to scrape away at the earth surrounding a land mine. The trick is to avoid contact with the trigger mechanism on the mine’s upper surface while digging away at the soil from a low angle, going in deep enough so that any contact avoids the spring-loaded trigger. Once the emplacement has been confirmed, a painted stake is driven in the ground to mark

the spot where a follow-up team lays a string of firecracker charges for controlled detonation.

Dogs are extremely good at detecting the scent of the high explosives in buried mines. The tricky part is training them to keep a safe distance, but skilled handlers have had few problems and remarkable successes in teaching their animals to play the game safely. g , the erman N , has two facilities in Angola where canine mine-sniffers are groomed for their mission.

Animals may also become the beneficiaries of demining. One of the most ambitious initiatives to come off the drawing board in recent years involves the recovery and transforma-tion of parts of Kuando Kubango province, also in the war-ravaged southeast, with a view to their eventual inclusion in what is set to become the world’s largest wildlife sanctuary. Assembled from outlying territorial contributions of Namib-ia, Zimbabwe, Botswana, Zambia and Angola, the Kavango-

ambesi Transnational Wildlife ark would provide Africa’s animals with a secure habitat the size of Italy, and create a tourism-driven economy to benefit inhabitants that now rely on subsistence farming.


UNDISCOVERED PLACESFOR INTREPID TRAVELERS

TOURISM: TOURISM:

The Cunene River near the border between Angola and Namibia

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When the civil war ended in 2002, few people would have considered Angola as a tourist des-tination. A mere trickle of intrepid travelers entered the country that year, but in every sub-sequent calendar cycle, the number has risen like the waters of Angola’s many surging rivers, reaching a crescendo in 2012 with more than half a million foreign visitors, an almost 500 per-cent increase in little over a decade, according to World Bank estimates.

Angola’s government has invested heav-ily in its tourism offer as a means of lessening dependence on revenues from oil and precious stones. A significant push to improve the coun-try’s infrastructure has resulted in thousands of kilometers of new roads being built and rail-ways restored. The government has prioritized the travel and tourism sector and growth indica-tors are expected to remain positive in years to come, leading the ministry to set a target figure of . million foreign tourists to Angola in the year 2020.

To this end, the Ministry of Tourism has launched a con-certed effort to place itself on the world stage at international tour-ism fairs. In 20 alone, Angola has participated at FITUR in Ma-drid, BIT in Milan, ITB in Berlin, BTL in Lisbon, FIT in Havana and INDADBA in Durban, South Af-rica. At BTL, it was noted that An-gola had made significant prog-ress in terms of investment in the sector, with the construction of new hotels, the improvement of roads, the business opportunities available and the country’s over-all tourism potential.

No small wonder, because Angola is full of surprises. The climate and topography changes dramatically from one province to the next. From tropical rainforests to the parched plains of the Namibe desert, soaring mountains and raging waterfalls such as the spectacular Kalandula falls

in Malanje – the continent’s third-highest - An-gola is Africa in microcosm. The Atlantic coast is a , 50-kilometer expanse of white sand beaches and the temperatures range from the sultry trop-ics of Cabinda to the cool conditions of Lubango in the south, where the seasonal Cacimbo mists take hold. The jewel in Angola’s crown is the na-tional parks network, which was ravaged during the civil war for natural resources and, as is the case across the continent, plagued by poachers. But a government initiative coordinated by the Quissama Foundation gradually reintroduced lost species into the synonymous reserve. Called Noah’s Ark, the project entailed importing ani-mals from South Africa and Botswana to repopu-late Angola’s natural spaces. Today, elephants, cheetahs, lions, antelope, wildebeest, leopards, gnus and zebras roam Angola’s protected parks, another tourism draw.

However, the majority of the foreign cash spent in Angola still registers in Lu-anda. Angola’s capital city is rated the most expensive in the world and has earned that accolade several times from human re-sources consulting firm Mercer. Oil wealth

Like many other industries, tourism in Angola was stunted by the damages inflicted b the civil ar. Toda , the tourist numbers are increasing as travelers from home and abroad discover the countr s ide-ranging treasures: miles of pristine beaches, national parks that have been restored and stocked ith

ildlife and an elegant cit nightlife are ust some of its attractions.

By Rob Train

Sand dunes on the Cunene

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has helped to build up the streets of the central business district and high-class hotels – many of them located near the Cuatro de Feveriero airport – and eateries jostle for the dollars dropped by visiting executives and resident ex-patriate workers. Top of the line four- and five-star hotel rooms start at around $ 00 to $500 dollars, while a three-star can cost $300. There is a burgeoning bed-and-break-fast sector emerging nationwide to cater for more modest budgets and a handful of hostels exist in the capital – al-though these are purely for the hardiest of travelers. Eat-ing out can also be an eye-watering experience in Luanda; the bill at most restaurants catering to tourists and expats will easily exceed $100 per person.

Nearby the city are several getaways, including Palmei-rinhas Beach to the south and Santiago Beach to the north. Mussulo Island lies 35 kilometers offshore from Luanda and is a favorite destination for foreign visitors looking to escape the capital. A tidal lagoon accessible only by boat, Mussulo Island is a white sand haven of the sort that adorns travel brochures the world over, complete with a wide range of accomodation and restaurants. Closer to the city, the Ilha de uanda,a .5 mile-long sandspit, holds beaches, bars, casinos and nightclubs that cater to both locals and foreign visitors alike, against the backdrop of the imposing Fort Sao Miguel. Throughout Luanda, colonial-era architecture jostles for space with imposing modern skyscrapers.

Angolan tourism as a whole is still heavily reliant on business travellers but recreational visitors are starting to discover the unspoiled country outside Luanda. Eco-tour-ism companies have sprung up to cater for the more ad-venturesome visitor and have opened up areas of Angola that would have been inaccessible 10 years ago, even if one such firm describes the conditions of the roads that must be traversed to reach them as “challenging.”

Unfortunately, while many African na-tions exercise little in the way of bureaucratic zeal when it comes to visa applications, An-gola takes it to the lower limit. The applica-tion process for an ordinary tourist visa or one covering a business conference would test the patience of the most seasoned traveler. Still, it is a vast improvement from several years ago, when tourist visas did not exist and practically no information on traveling around the coun-try - if you were lucky enough to get in - was available via any medium. Today, many of the eco-tourism travel companies will happily ar-range visas, hotels, airport transfers and on-ward travel across the country.

The rewards for those travelers willing to jump through the hoops are found in a coun-try where mass tourism has yet to swamp the natural reserves and where they can get a real glimpse of the African wilderness as it was before the European colonial powers arrived. In an age of globalization and overpopulation, Angola’s natural beauty still lies very much off the beaten track. But a colonial throwback is also one of the new attractions Angola has to offer: the Benguela railway, built in the early 20th century, has recently reopened and is considered to be one of the most spectacular rail journeys in the world, running from the Atlantic coast through the central highlands and onto the city of Luau, on the border of the Democratic Republic of Congo.

Aside from the destruction wreaked on its national infrastructure during the civil war,

Elephant sunset

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Another view of the dunes along the Cunene River

Zebras are among the animals that can be found in Angola´s protected parks

The Epupa, or Monte Negro Falls rise to a height of 40 meters The Epupa, or Monte Negro Falls rise to a height of 40 meters

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TREASURES AND PLEASURES, NEAR AND FARMost business travellers and foreign residents in An-gola spend the vast majority of their time in Luanda. While tourist infrastructure is lacking in much of the country’s interior, a few destinations provide a sure reward to travellers. Some of the best, close by and far from the capital, are listed below.

MUSSULO ISLAND. A weekend getaway just south of Luanda but well removed from the big-city chaos, Mussulo Island is in fact a peninsula. Most travellers arrive by boat, taking the 22 mile trip from the pier in Luanda. Apart from its natural attractions – white sand beaches and coconut trees - the island features chalets for rent, resort spas and other ame-nities. The shore facing the mainland offers tranquil waters, perfect for aquatic sports, while the Atlantic side boasts isolated beaches and dunes, making it an ideal spot for viewing the sunset.

KISSAMA NATIONAL PARK. Located 70 kms 3. miles south of uanda, issama is one of An-

gola’s largest areas for viewing wildlife. Like most of the country´s national parks, Kissama (also spelled

uicama was neglected during the civil war and fell victim to poachers. An ambitious international program, Operation Noah´s Ark, began to repopu-late the park in 2000, by importing animals from Botswana and South Africa. Today, Kissama boasts a growing population of elephants, rhino, dwarf forest buffalo and roan antelope, along with a wide variety of bird species.

KWANZA LODGE. Not far from Kissama, on the mouth of the Kwanza River, sits this privately-run lodge, which offers cabin accommodations, a restaurant and bar, all surrounded by the natural vegetation on the riverbank. A popular spot with fishermen, it has a sport fishing vessel that can take serious anglers as far as 500 nautical miles into the Atlantic. Visitors can take a river cruise on the Kwanza or enjoy the palm-lined beach at Cabo Ledo, just south of the lodge. For bookings, contact Trix or Danie at [email protected] or by phone

2 3 0 8. BENGUELA RAILWAY. A legendary feat of en-

gineering completed in 2 , the enguela railway was built to connect the Port of Lobito on the Atlan-tic with the copper mines in Zambia and the Congo, more than 800 miles away. The railway was shut down in 2 after suffering extensive damage dur-ing the civil war, but was reopened in 2012. Tourists who want to get the feel of colonial rail travel can take the twice-daily service on the 8.5 mile route west from enguela 3 2 miles south of uanda to Puerto Lobito. Those who choose to travel east will have less choice; the service to Huambo, for exam-ple, runs only once a week.

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ANGOLATOURISM

The Baobab tree, known as the “Tree of Life,” can store up to 100,000 gallons of water in its trunk The Baobab tree, known as the “Tree of Life,” can store up to 100,000 gallons of water in its trunk

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Angola’s main obstacle to increasing tourist arrivals in recent years was the inclusion in July 2007 of national flag carrier TAAG Angola Airlines on a European Union black-list due to security concerns over aircraft safety. Still, the blacklisting did not affect the trend of rising foreign visi-tor numbers year-on-year. The ban on operating flights to and from EU countries was lifted in March 2010 after the government restructured the company and invested in a major overhaul of the fleet’s aircraft. TAAG had been granted permission to operate flights to Lisbon a year ear-lier. Today, the company is one of Africa’s leading airlines, with a modern fleet of Boeing 737-200s, 737-700s, 777-200ERs and 777-300ERs. Flying out of Luanda’s Cuatro de Fevereiro airport, TAAG’s list of destinations includes the European Union, Beijing, Dubai, South Africa, Russia and Brazil, as well as several domestic stops. Companies that operate inbound services include British Airways, Luf-thansa, Emirates, Iberia and KLM.

TAAG has achieved important objectives. After the blacklisting, the government had to outline a plan to re-build TAAG, with the main objective of restructuring the company’s operational area. Those efforts culminated in 2010, when TAAG was the only African airline to have its

EU security ban lifted, because it was able to pass the au-dits to which it was subjected and, consequently, the air-line’s credibility began to be restored. Other than IATA, at the African level there is also another association, AFRAA, and TAAG has held the chairmanship of its executive com-mittee since 2011, says the airline’s chairman, Dr. Joaquim Teixeira da Cunha.

Air travel has opened Angola to the wider world and TAAG’s investment in the country’s domestic airports has gone some way to solving the inherent problems in over-land journeys. What’s more, a new craving on the part of cruise ship passengers to explore previously unthinkable destinations has benefitted uanda. Since 200 , several operators have included the Angolan capital on their itin-eraries, among them Holland America Line, Yachts of Sea-bourn, Oceania, Silversea Cruises, Princess Cruises and Cruise and Maritime, all of which will be docking in the Ilha de uanda bay in 20 , 20 5 and 20 .

All of this is a boon to the government’s plan to cash in on the exceptional tourism offer that Angola enjoys. In a continent largely overrun with package deals and by-the-numbers tours, Angola presents something of a final fron-tier for people wishing to really scratch beneath the surface

The Kalandula Falls, in Angola´s northwestern Malanje province , is one of the largest waterfalls in Africa by volume

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of Africa. Problems persist in trans-port and infrastructure, but the gov-ernment’s commitment to promoting tourism as a means of sustainable non-oil related income has smoothed over many of the issues connected with getting around the country.

One of the quickest and most ef-fective ways to achieve this was to develop a modern and efficient net-work of airports.

As. TAAG’s Dr. Cunha explains, “In broad strokes, the government outlined a program to rehabilitate and modernize the airports in the whole country. All provincial air-ports benefited from this moderniza-tion program, and they still continue to benefit from large investments to create the conditions required for the operation of aircraft and for the proper handling of passengers.”

He adds that currently, a new airport is being built in Luanda, with the aim of turning it into a regional hub, providing a connecting link to Latin America, especially to coun-tries like Brazil, Cuba and, eventual-ly, Argentina. The new airport could also be a point of connection with Europe, because many African coun-tries have no national carrier and travelling from one to another often requires going through Europe.

A C T T AR RRU T AC A A S A -T -U RS T URS, A A R S TS A A R T R R S T R A R AT T SUR AC A R CA.

Inner gorge of the Monte Negro falls

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90 Angola LIFESTYLE

ANGOLALIFESTYLE

WORLD’STRAFFIC JAMS AND KIZOMBA IN THE

MOST EXPENSIVE CITYollo ing a long period of confl ict,

Angola toda has emerged as an oil-rich countr ith one of the fast-gro ing econo-mies in the orld. ut the former ortuguese colon is much more than that: its rich and livel culture refl ects the infl uences of the rest of Africa, as ell as ortugal and razil.

By ESTELLE MAUSSION

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Angola is often called the “new Dubai of Africa,” mostly because of its renovated and lively capital, Luanda. The city´s recent development is best symbolized by the Ilha, a new bayside boardwalk lined with palm trees imported from Miami, where residents and visitors can stroll, rollerblade or savor an ice cream in the sun.

Once a year, the Angolan capital makes the international news, because it heads the Mercer survey of the world’s most expensive cities for expatri-ates. ast year it took first place, ahead of oscow, Tokyo and Singapore.

“The prices are totally crazy here, and not only for expatriates but for everyone”, says Aldemiro Ladislav, a 23 year-old university student. “Every-thing is very, very expensive - food, clothes, electrical devices, cars, hous-ing... it’s hard to believe but it’s true, that is our day-to-day life.”

If you don’t know how to bargain, the “mamas” selling vegetables and fruits on the street will charge you five dollars for a pineapple. In an ordinary restaurant, a dish such as fried chicken with French fries or fish of the day with rice will cost between $30 and $40. A night in a “pensao” (hostal) costs about $150 and you’ll have to pay at least $100 more if you choose to stay in a hotel.

This hyper-in ation is the result of the country’s recent history. The con-icts that roiled Angola for over four decades, between and 2002, were

enormously destructive: roads, trains, communication lines were destroyed, while agriculture and many other industries were ruined. Since the civil war ended in 2002, the country has been recovering very at a rapid pace, thanks to its oil resources. Angola is today the second-largest oil producer in Africa fol-lowing Nigeria, producing 1.7 million barrels a day in 2013.

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The government of President José Ed-uardo dos Santos, in power since , has been spending the money to rebuild and modernize the country, but the process is far from being completed.

“There are still problems with infra-structure, logistics, water and electricity supply , says Salim alimamade, profes-sor of economics at the Catholic Univer-sity of Angola. “And, as the country is not producing enough, it has to import the vast majority of the food and goods. All of that means higher prices.”

The oil-based economy, combined with the presence of a large number of expatriates, has combined to create a real-estate bubble and a shortage of es-sential services, all of which contribute to rising in ation.

It’s a difficult situation but we are now used to it. veryone finds their own solutions and tactics to get through it,” says Aristide, a student in biology.

WIth a population of five million, or a quarter of the country’s total population, Luanda is on a different scale than other Africa capitals such as Lagos or Cairo, which have 15 million inhabitants each. But it’s still a very chaotic place. Built by

ortuguese in the th century to house 500,000 people, the city has undergone rapid growth without any urban planning.

As a result, its electricity, water and telephone systems are all undersized or outdated. The shortage of public trans-portation creates horrendous traffic jams, while the collective taxis - blue and white Toyota vans called “candongueiros” (“il-legal traders”), famed for their dangerous driving - further complicate the situation.

“I have to wake up every day at 5 a.m. and leave at 5:45 a.m. in order to avoid traffic and get to my office in the city cen-ter,” says Maria, a 33 year-old Angolan woman who works at a bank and lives in a condominium in the suburbs of Luanda.

For newcomers, this can be very dis-turbing. ecause of the traffic and the time wasted waiting for people, it’s really hard to have more than two meetings on the same day, complains a South African businessman on a commercial visit.

Security is also a major concern. As in most African countries, simple measures are required, such as driving with the car


doors locked, not carrying any object of value, or avoiding walks at night. ery recently, the Angolan authorities observed an increase in crime, which was followed by a strengthening of the police force and the launch of a so-called “zero-crime” operation.

But what is most striking for the strangers is that Luanda, per-haps more than any African capital, is a place of extreme contrasts. The city is home to both a rich elite and a massive poor popula-tion; to both modern skyscrapers and decrepit colonial buildings; to luxurious suburban developments and sprawling slums.

Nothing illustrates this dichotomy better than the Ilha, a 4.5 mile-long peninsula on the bay of Luanda. Not many years ago, it was a peaceful spot, peopled by fishermen, where tra-ditional celebrations were held and a gentle lifestyle was the norm. Today, it houses fashionable nightclubs, expensive sea-food restaurants and trendy bars where expats and wealthy Angolans enjoy themselves on the week-ends. However, the local population is still there in the background, holding their modest parties on the beach.

“I don’t like to come back here to where my house was, it’s too painful”, says Fernando an Angolan teacher, evicted from the Ilha because of a road reconstruction. “I had to move very far from here, where I miss the ocean and the solidarity of our former neighborhood.”

Across the street, young people are enjoying themselves at a new club where patrons can drink and dance until sun-rise. On the Ilha, there´s always a reason to have a good time, whether it´s Carnival in February, Women’s Day in March, the winter – called cacimbo – in July or the New Year.

That’s because fun, music and dancing are an essential part of the Angolan way of life. Despite the difficult condi-tions they live in, Angolans are very welcoming and friend-ly, always quick with a smile or a laugh. Silence can hardly be found because there’s music everywhere: in restaurants, in the streets, in cars, even in offices. The sound heard is usually is kizomba, the typical Angolan music, created by a fusion of West Indian zouk, African rhythms and semba, an Angolan mixture of traditional and modern rhythms with European and Latin American styles.

“’Kizomba’ means ‘party,’ or ‘advertisement’ in Kimbundu, one of Angola’s national languages,” explains Domingos Ngui-zani, director of the Angolan National Ballet. “During the civil war, the music helped the population to think about something else. At that time, people gathered during the week-end, trying to forget the violence of the battles by listening to music, singing and dancing,” he adds.

izomba is also the name of the dance associated with the music. Everyone in Angola, from the youngest to the oldest, knows how to dance kizomba, a colorful, two-person dance.

“This dance is more and more popular today, and is known all over the world. There are kizomba classes in Lisbon, Paris and London”, says Eduardo Paim, the singer-songwriter who helped to popularize the step in the 80’s. The dance did create the suc-cess of the music, because of the creativity and freedom it offers.”

In Angola, a new generation of young singers invented kuduro, which is a mixture of kizomba with R&B or electronic music. Rap also enjoys great popularity, from romantic rap-

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Photo by Arianne Martin


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pers to revolutionary ones, who criticize the long-serving Angolan president, the style is very lively. Other well-known artiists include Paulo Flores, the Ango-lan king of semba, or Waldemar Bas-tos, a guitarist and singer whose music combines Afropop, Portuguese fado and

razilian in uences. Music is just one example of Angola’s

dynamic culture. The country is also alive with theatre artists, one-man show pro-ducers, painters and fashion designers. The sisters Delfina and eatrice er-aldo created their own brand of clothing,

eraldo Fashions, and have participated in fashion shows in Luanda, Windhoek, and even New York, during African Fash-ion Week. Their designs are inspired by styles from Africa, Europe and Brazil.

Angola is indeed an astonishing melting pot of in uences the ortu-

guese colonial past, the Soviet-dominat-ed period, and the strong links with Bra-zil as well as with the rest of Africa. The country’s cuisine re ects this richness the cod and steak with pepper sauce dishes from Portugal, barbecues from Brazil, and beans in palm oil, mashed manioc and seafood from the Angolan and African heritages.

The Angolan traditional cuisine also reminds us that Angola is still largely a rural country. “Luanda is not really An-gola, the capital is an anomaly in the country”, Angolans like to say. A trip outside of Luanda will show you that the rest of Angola consists of villages, small and quaint cities, forests, deserts, beaches and mountains. The country has a wide variety of landscapes and a high tourism potential. Nowadays, only 500,000 persons per year come to visit

the country, mainly on business trips. ut in the future, the figure is expected

to be much higher; Angolan authorities plan to welcome more than four million tourists annually in the decades to come.

Photo by Arianne Martin

Designs by Angola´s Geraldo Fashions have been seen on runways from Windhoek to New York.

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Kizomba LIFESTYLE Photo by Arianne Martin

ANGOLA’S “RAINBOW CUISINE” COMBINES FLAVORS FROM NEAR AND FARAfrica is home to a diverse set of regional cuisines, many of which combine strong local culinary cus-toms with foreign avors that re ect their colonial past. In Angola’s case, this “Rainbow Cuisine” brings together the ancient agricultural traditions of indig-enous tribes with alternative spices from Asia and In-dia, and the European tastes of the country´s former colonial masters, the Portuguese.When they first arrived in the 500s, the ortu-guese introduced a wide variety of herbs and spices to the country, such as the hot chili peppers known as “peri-peri,” black pepper, garlic and the vital ingredient, olive oil. Angola’s traditional dish-es were soon being amended to include what were then exotic new elements.Today, everyday Angolan cuisine remains simple, hearty and heavily in uenced by its traditional fishing and agricultural roots. Typical ingredients include seafood, chicken, beans, rice, vegetables and various sauces (which are invariably packed with ortuguese inspired avour. Among the sea-food varieties prawns and white fish such as tilapia are popular and used in many recipes. Eating out in Luanda, though, is also extremely expensive. Better news, however, is that local beer remains a welcome exception, with a bottle setting you back less than a dollar. Small won-der that one of the nation’s favourite traditional dishes is also said to be a great hangover cure!

HERE ARE SOME OF THE BEST-KNOWN ANGOLAN DISHES:Calulu de Peixe (Fish Calulu) is a classic Angolan stew infused with the Iberian avours of ortugal. It consists of dried and salted fish, fresh fish, onions, tomatoes and hot chilli peppers cooked in red palm oil with okra and sweet potato leaves. While its me-dicinal properties may be up for debate, there can be no dispute about its delicious avor.This stew is typically served up with a side of Funje, an ancient Angolan recipe made from cas-sava our, with a consistency similar to mashed potatoes When served together, Calulu de Peixe and Funje make a perfect plate to represent the coming together of traditional Angolan cuisine with the taste of the country’s colonial past.Other favorites include Moamba de galinha, or chicken moamba, is often called the national dish of Angola. It consists of chicken with a hash made from palm oil paste, or red palm oil, along with okra and garlic. It’s served with rice or Funje and often accompanied by wild spinach. A variation called moamba de ginguba features peanut sauce instead of red palm oil.Cocada amarelha. Diners with a sweet tooth will enjoy this yellow coconut pudding prepared with sugar, grated coconut and egg yolks, a dessert that is also popular in Mozambique.

FAR FROM THE MADDING CROWD


NIGHTCLUBS:

Two of the restaurants mentioned above, Loo-kal and Coconuts, turn into high-powered disco-theques once dining hours have ended. Some of the others that shouldn’t be missed are:

Chillout. Av. urtala uhamed. Tel. 2 222 30 3. Upscale and sophisticated, uanda s premier

nightspot is situated at the far end of the Ilha. The I area is recommended, as the place does be-

come packed. Saturday nights are for izomba and local crowds predominate.

Teatro Elinga. Largo Tristao da Cunha, 17. 244 2 2 858. reat music, professional D s and a

pleasant surrounding in a charming old building, make Elinga popular with expats and locals alike.

iami each. Av. urtala ohamed. 2 2 3 885. An emblematic uanda locale, iami each has a restaurant, bar, discotheque and, like its competitors on the Ilha, fabulous ocean views.

95 LIFESTYLE Angola

Cocada amarelha, Angola’s sumptuous conconut pudding.

RESTAURANTS:

Cais de Quatro Av. Murtala Muhamad, Casa do de-sportista, Ilha do Cabo. Tel. 2 23 3 5 5 . oast-ing “the best view of the Bay of Luanda,” Casi de Quatro has a wide and varied menu ranging from seafood dishes to sushi and pizza.

Cafe del ar. Av. urtala ohamed. Tel. 2 2 205 777. A relaxed atmosphere and a privileged lo-cation at the end of la Ilha have made Cafe del Mar one of the capital s most popular spots for informal dining, snacks, or just drinks.

ookal. Av. urtala uhaned, 2 0. Tel 2 38 2 735. Locals and expats alike praise this restaurant as one of the best in the capital, despite the high prices. Lobster is the speciality of the house, but before din-ing, try one of the trademark black caipirinhas.

Tambarino. Av. Amilcar Cabril, 23. Tel. 2 23 0 00. A traditional restaurant featuring seafood

specialties, an ample wine list and professional service. All these combine to make Tambarino a classic among Luanda eateries.

Naquele ugar. ua de Setembro. Tel. 2 2 322 5. ocated next to the fortress of San iguel, Naquel ugar has a great view of the city. Seafood dishes are the specialty, but the steak with pepper sauce is also recommended.

ahia. 83 8 Av de Fevreiro. Tel 2 222 3 0 0 ne of the most popular restaurants on the

Marginal, the renovated, palm-lined boardwalk on the Bay of Luanda. Its three levels of seat-ing include a romantic, candlelight venue and a top- oor pizzeria.

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FAR FROM THE MADDING CROWD ANGOLALIFESTYLE


Angola LIFESTYLE 96

FROM SEMBA TO KIZOMBA:EXPLORING ANGOLA’S MUSICAL SENSUALITY

ANGOLALIFESTYLE

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Any conversation about contemporary Angolan music must necessarily begin with semba. First popularized in the 50s, semba is a style of music and dancing that is the main in u-ence behind other genres that have originated from the West African nation, such as kizomba, which took semba’s sensual-ity to a whole new level, and kuduro, a fast-paced Angolan style of techno and house music.“The body of the man that comes in contact with the body of the woman at the level of the belly button – this is one definition of the word semba in the context of dancing, which shows the highly sensual nature of Angola’s popular forms of music and dance. Semba was strongly influenced by the cultural traditions of the antu a general label for the 300– 00 ethnic groups in Africa who speak Bantu languages) and African rhythms such as kazukuta and kabetule. Semba songs are tradition-ally sung in Kimbundu, a Bantu language widely spoken in north Angola. One of the first modern Angolan bands to sing in Kimbundu was Ngola Ritmos, in the late 40s and 50s. That was a daring move at a time when the language was prohibited in Angola by the Portuguese. The subject matter of semba songs usually focuses on social events and activi-ties, day-to-day life and, before independence in 5, the freedom of Angola. Ngola Ritmos also contributed enormously to the spreading of semba music globally and in uenced the guitar-driven style of later semba artists such as iceu ieira Dias, os aria and Nino Ndongo. Barceló de Carvalho, the An-golan singer known as Bonga, is one of the most successful Angolan artists to popularize semba music international-ly. A nomad who spent time in Portugal,

ermany, elgium, France, as well as returning to Angola, Bonga remains a hero to many Angolans and was fierce-ly and openly critical of the political re-gime that was established following the country’s independence in 5.

Initially, semba was a single dance where a man would move rhythmically in front of a woman. Then, in one sudden move-ment, he would grab her by the hips and draw her close to him so that their bellies were touching. Nowadays, semba is a couples dance with large, often acrobatic, steps to a fast beat, where there is much room for improvisation.Following independence in 5, zouk an Angolan style of music derived directly from zouk music from the French Ca-ribbean) began to take over at parties. By the beginning of the 80s, kizomba, a style of music and dance which incor-porated both zouk and the semba, was becoming popular. To the untrained eye of a spectator unfamiliar with the danc-ing style of kizomba ( a word which can mean both “party” or “dance” in Angola), it has some similarities with tango. But it can certainly seem more sensual, on account of the intense gyrating hip and lower body movements. Partners dance inti-mately close together on tempo, as well as on the off-beat, and occasionally use syncopation (musical rhythm in which stress is given to the weak beats instead of the strong beats).

ike semba, kizomba music is in uenced by traditional Af-rican rhythms and, traditionally, by the Kimbundu language, but, like unlike semba, kizomba music is characterized by a slower and usually very romantic rhythm – hence its simi-larities with tango.Since its humble origins in Angola in the early 80s, kizomba has gone on to become hugely popular throughout the world, particularly in lusophone (Portuguese-speaking) countries and across West Africa. In recent years, this sensual dance has also taken hold in the United States, particularly in San Fran-cisco, New York, Seattle, os Angeles, and Washington DC.

As Kizomba has spread globally, it has naturally taken on new forms and in uences from around world, but, “The roots of kizomba are and will always be Angolan,” said An-golan professional dancer and choreographer edro ieira Dias in an interview with Jornal de An-gola. “Angola will always be the fountain from which people drink the pure water of Kizomba.”

Singer Waldemar Bastos’ music combines Afropop, Portuguese fado a ra ilia i ue ces

Angola ma ell be one of the most musi-cal countries in Africa. ver the centuries, Angolans have combined their o n music and dance traditions ith influences from

urope and, most notabl , razil. Toda , Angola has begun e porting its musical and dance st les, as evidenced b the popu-larit of kizomba in clubs and dance halls from isbon to os Angeles.


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