Why should I invest in Angola, NOW? 2.0
The elections have ended, the old power is out, and the new power is in functions, on top there’s no sign of conflicts (yet). Apparently and based in official speeches from Jo?o Louren?o (JLO as locally called), the new president states huge changes are undergoing against corruption and on new laws of foreign investments.
In VIANGOL we think that our job as analysts (as we like to see ourselves) is to bring you clear views from this market, where we operate in, providing independent outlooks that you may rely on. Although Viangol is particularly focused on healthcare, we may also provide similar research in further fields with MEDIANGO. Remember, our job is to search and provide you with independent information, trying to maximize your investments, if this is the case. We provide quality information; then you decide what to do with it.
The first months of this presidency have been like a hurricane. After decades of ruling power from José Eduardo dos Santos, JLO first measures were indeed a huge surprise due to the speed and the deep level they were implemented. JLO first act was a public and visible campaign against corruption, and in a first glance his initial measures were to step away Dos Santos family from all leading positions they had in public companies/ administrations. More than 300 exonerations, in just a few weeks, from police to the army, state oil company Sonangol, hospitals, etc., shows clearly that there is an agenda that was previously established and very quickly implemented.
Going around the country it is evident the support of the population to the new President. There is also a new breath in media, with people discussing everything in a way that was unthinkable just a year ago. This seems to be a clear sign into a new stage of local democracy. However, it is our duty to call your attention for the results; only time will show.
Oil prices are recovering (70 USD recently against 30 USD, not so long ago), reserves of foreign currency (USD) are still very short for the country needs being a challenge for most companies to transfer abroad, so, why should I invest in Angola now?
In a country with an economy still so dependent on oil, the recent fall of price created a perfect storm. Is this a reason to quit the country or stop any planned investments? Or even to start now your business here? Well, yes and no. Each one knows its own limits, but please have in mind that:
- As we wrote and predicted in February 2015, oil price has increased substantially (meanwhile).
- As we wrote and predicted in February 2015, policies to support and more rapidly develop non-oil related activities are now a major concern to the Government.
- As we wrote and predicted in February 2015, several companies left the market, creating more space for those who resisted, stayed and eventually for those jumping now into the boat.
- And if you decide to start now, congratulations. If you succeed in establishing your business now, you can only be more successful when events turn around, allowing you to maximize your investment.
- Local authorities must value and support those who remain or decide to come at this very challenging moment.
- Healthcare is clearly a priority for local authorities and its budget was even increased; there is definitely an opportunity in this field.
In contrast to what it may look like in a first glance, this might well turn out to be the right moment to gain your place in the market or increase your market share: it all depends on how you look at it and how well prepared you are for it.
Also have in mind that a very subtle change happened in the last weeks. Angolan Government signed agreements with South Africa and China, surpassing entry VISAS. Cleary this will transform the reality in next coming years. Keep an eye on it, competition will increase, but very probably your chances also. And one way or another, directly or indirectly, IMF will be around the country.
How to proceed? In general I would say:
- 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.
- Selecting the right partner is crucial for your success. One day you may well 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 very high local living costs, give a reasonable and fair time for results (be careful with fast profits…) and implement the very best management practices from the beginning.
As we wrote before, we are convicted that soon or later this will be a much open economy. Either the Government opens the country, either Angola will remain endless in the end of the tail. If we are asked about it, we would have only a suggestion to local authorities; open the country as fast as you can and create real serious legislation for foreign investment. 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 from a new era.
Keep attention, this will happen; it will be a clear sign of a tremendous change. Meanwhile, try to secure your place, if you have the chance.
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.