ANGOLA 2020

We do not know if Angolan President Jo?o Louren?o (JLO) has been reading our posts, but if not, it seems like (by the way, if you have not done it yet, you are still in time to do so). Indeed, along last posts we have predicted several measures now implemented or under implementation in Angola and again we will take the risk to predict the future: one way or another, some of our thoughts will become reality. Believe us, we do not have a crystal ball and we do not practice obscure sciences, what we do is just analysis, pure analysis, based on field work we developed along years. By the end, we just want to share our knowledge, eventually calling your attention to our country and who knows, perhaps leading you to invest safely in this extraordinary land.

We are not driven by politics, we are absolutely independent: in VIANGOL we think that our job as analysts (as we like to see ourselves) is to bring you clear insights of this market, where we operate in, providing independent outlooks that you may rely on. Remember, our job is to search and provide you independent information, trying to maximize your investments, if this is the case. We provide quality information; you decide what to do with it.

If you have not realized yet, the two paragraphs above were exactly the same we have written almost two years ago. However, we admit, along the last two years, reality has overpassed fiction and the chain of events was unthinkable for many inside Angola.

It was not a long time ago that ruling President JLO also became President of the MPLA, keeping in his hands both the Presidency of the country and the party, closing the first year transition from former President Dos Santos and the so called “bicephalus” system, for sure not a solution for Angola. Since then, there are no “excuses” and all the responsibility is in the same hands.

Indeed, we can assure you that a lot has changed along last years and a lot will have to change even more during the next ones: simply, there is not any other option for Angola, if, in fact, its President wants to achieve a significant role in this country′s history. It is clear, that the legacy left to JLO by his predecessor deserves no comments, but exactly because of that, he may have a unique chance in history. In general, observers agree that Dos Santos legacy is characterized by important marks like the end of war, peace with UNITA, unification of the country, stability and election processes firmly established, side by side with extreme poverty and huge corruption practices.  

And fighting corruption seems now the main motto from the ruling party and actual Presidency. However, political, this is bringing to a new era and probably to unprecedented politics; since MPLA has been the ruling party in Angola how will it fix the own system it has established along the years? How will it turn around completely its own practices, implemented since ever? We are not politicians; remember, we just love this land, our job is to search and provide you independent information, trying to maximize your investments, if this is the case. We provide quality information; you decide what to do with it.

Going around the country, it is evident the population support to the new President. Altogether, it appears to exist clear signs of a new stage in local democracy. However, it is our duty to call your attention for the results; only time will show. Clearly, empty stomachs are not a good base to keep popular support and it is important to improve fast and provide minimum living conditions for population in general

Today, we want to call your attention, again, to another factor, we risk saying, either an extraordinary chance or an explosive one: demography. If our calculations are correct (we are not sure and we would like to have your inputs) Angolan population is growing roughly one million souls yearly. Think about it; one million 1 000 000. This is, we are now at least more 1 500 000 since we have write last time.

Either the Government face this reality urgently or it may explode in everybody hands. The challenge is huge, the equation is simple; we have millions to educate, to provide with health conditions, to give them a future to believe in, or we will have millions frustrated, revolted, not accepting anymore their fate…

In VIANGOL, we want to believe that we are now just starting a new future, with much better perspectives. Will it be easy? Not at all, we do not think so, but we believe that coming years will be effectively growing ones, and that this is your opportunity to come into this country, bring your expertise, share it, and very naturally, to profit; it is fair.

Where should I invest, are you asking? Like last time we could say everywhere, in almost everything, it is true, but this is too generic, so we will exercise:

• Agriculture - definitely it is a chance. Angola is extremely rich in land and water and agriculture may employ a lot of people.
• Fisheries – Angola rich sea may well support an all fishing industries.
• Cattle breeding – another sector condemned to be successful.
• Wood – the potential is huge, both for conscious plantation and for establishing a furniture industry.
• Natural stones – tremendous potential either for raw material or to transform it.
• Middle industry – as agriculture, cattle and fisheries develop, for sure it will bring middle transformation industry.
• Training – in all sectors, training will, permanently, be requested along next many incoming years.
• Tourism – natural conditions are simple amazing, but of course, it only will become serious as infrastructures develop.
• Healthcare – all, but all to be done…

Against the past, we would like to call your attention for a small detail: according a note just released last day 17 by Fitch Solutions, Angola oil production is expected to decrease 41% to 762000 barrels a day by 2028. By other side we all know that “blue gas”, this is hydrogen, is emerging as the future in energy. Clearly, although oil will still remain important for many years, we are running against time; either in Angola we change the base of economy or the country is condemned. That said, this is now probably the last chance to do it properly, in due time and in peace, as everybody deserves.

A new reality is present; official money exchange rates are becoming closer to street rates, inflation seems to be more controlled, combined with significant devaluation of local currency, demography is placing already a growing pressure and amazingly, against all odds for those living here, corruptions practices from the past (with others much, much more recent…) are being exposed daily, creating a new political/economic moment. Where are we going?

We believe, we want to believe, that this country will move into the right direction, more friendlily to foreign investment, open to freedom and bringing the right future with education and healthcare to its citizens, the basis of any successful modern State.

We want to call your attention to a “rare coincidence”; along last days we had here Angela Merkel, Mike Pompeo and soon Macron is expected to visit Angola (May). China is already a long stable story here, so we can see a rare alignment in different geographies to develop Angola. Important to notice also the importance of Angola for the protection of South Atlantic and its maritime routes…

In conclusion, this is probably a very fair moment to look into this country carefully and invest here. We might well be in the beginning of a virtuous cycle and this may be the very right moment to come in.

How to proceed? In general, as previously suggested:

• Study very carefully the local legislation concerning your business, do serious market research, have a clear business model, select local partner(s), go ahead with your project and start its implementation
• Select the right partner is crucial for your success. One day you may fly on your own, but if you are starting, make sure to “learn” the local environment well; having the right partner is essential for this
• Be prepared for high local living costs (now decreasing due to currency devaluation), give a reasonable and fair time for results (be careful with fast profits…) and implement the very best management practices from the beginning.

We have realized that onshore oil is now also actively into the radar in Angola. However, looking carefully for the locations, we trust that it would be a crime if any Government in Angola allows it in Okavango; it will become much more profitable to Angola and to local populations to explore it as one of the last world virgin nature reserves than to extract oil from there. We just want to call our attention in due time, for future memory.

As we wrote before, we are convicted that in coming years this will be an open economy and it is moving towards it. Either the Government opens the country or Angola will remain endlessly in the tail of development.

The country is changing, probably faster than we see; new legislation for foreign investment is and will be implemented. Simple as “any entity may invest in Angola and fully repatriate the profits abroad, concerning it is legally registered in Angola and pay its taxes locally”. As, by the end, you see this step implemented, it is a clear sign for a new era.

As we write before (2018) “keep attention, this will happen; it will be a clear sign of a tremendous change (as well as foreign currency available again to transfer abroad – what is happening again). Meanwhile, try to secure your place, and take the opportunity.

Welcome, and please bring all your expertise to this challenging country.

To your prosperity

Elísio Lopes Cabrita, Sales, Marketing and Export Management Consultant.

Born in Angola, I have worked over the last two and a half decades with a diverse array of challenges ranging from B2B to B2C and from a small sized family business to multinational ones, with living experiences in China, Europe and Angola.

My approach is to challenge the status quo and find suitable ways to create value for stakeholders.

I really appreciate you are reading my post. If you want to reach me directly, please send an email to [email protected].

Thank you for your interest.