General Information
Capital(s): Luanda
Population: 10,366,031 (2001)
Area: 1,246,700 Km²
Currency: 1 new kwanza (Nkz) = 100 lwei
Language(s): Portuguese
Time Zone: GMT-1h00
ISO Code: AO
Dialing Code: +244
Continent: Africa
Introduction
This profile of Angola and doing business there is an overview. From the drop-down menus at the top of this page, you can access a wide range of additional business information on the Angola provided both by Mbendi and by our clients and partners
.
The first drop-down menu provides access to more detailed pages on the country’s economy, as well as to profiles of Angola’s major industry sectors, particularly oil and mining
The second drop-down menu allows you to access profiles similar to this one for other countries of the world.
The third drop-down menu allows you to search our various databases of Angolan business information. This includes companies, organisations including government departments, personalities, projects and facilities
Finally, the fourth drop-down menu allows you to access a range of Internet applications aimed at assisting you to conduct business more effectively.
The news headlines on this page are updated on a daily basis. You can click on Other News at the end of the headlines in order to get the country’s business news stretching back over several years. Because this overview is only updated every few months, you should use recent news items to build an up to date picture of Angola’s business environment.
Geography
Angola is situated in Southern Africa and shares its borders with the DRC, Namibia and Zambia as well as the Republic of Congo.
The capital city is Luanda and it is also an important port.
Politics
: President Jose dos Santos came to power in September 1979. He was reelected in what many saw as an evenly contested democratic election. The opposition UNITA under the leadership of Jonas Savimbi did not accept the result and have until recently continued a guerilla campaign.
The recent death of Jonas Savimbi has given people new hope that there will be a greater chance for peace. There is also increased pressure on both parties in the conflict to try and find a resolution to the conflict. There is new leadership of UNITA though and they have indicated that they will continue to fight unless the government proposes a truce. They have also called for the easing of UN-imposed sanctions against them as well as the opportunity to conduct talks with the UN. The government has stated that it is willing to negotiate a ceasefire agreement with UNITA. The peace process depends solely on both parties’ willingness to reach a compromise.
Economy
Angola’s economy has suffered as a result of the civil war that has raged for decades. Most of the country’s population survives through subsistence farming. The country’s oil exports are vital and provide almost half of Angola’s GDP. This and the fishing sectors are the only ones that prove attractive to foreign investors.
The government has implemented certain steps towards the improvement of the economy. These include the liberalisation of certain sectors as well as the furtherance of a privatisation plan. But the country still faces pressing economic and social problems. A lack of discipline when it comes to public spending is one of the biggest obstacles to economic recovery efforts.
Industry Sectors
Important industry sectors in Angola include fisheries, agriculture, manufacturingas well as oil
Investment
The civil war has meant that many investors have shied away from investing in the country. But the government has started to adopt measures to attract foreign investment.
Attempts have been made to try and reform the country’s fiscal and monetary policy. In terms of the fiscal policy, the government has stated that it has adopted a more restrictive policy. This is in order to control the level of public expenditure in what they have termed a ‘non-inflationary” way. This has also resulted in a tightening of tax laws and collection. This measure has two effects. Firstly, it ensures that the government receives the revenue owed to it which helps in the delivery of services. Secondly and perhaps more importantly, it also helps to reduce the level of corruption in this sector.
The government also revamped the manner in which it distributed subsidies. Instead of the application of an “across the board” fuel subsidy, it has chosen to look at each sector individually. The result has been that specific fuel subsidies – in the form of tax breaks – are applied to those sectors regarded to be essential for the country. These include agriculture, the fishing sector as well as coastal traffic.
The monetary and exchange policy of the government has also been reformed. The main aim of the reforms is to reduce the annual inflation rate as far as possible. Accordingly a restrictive monetary policy has been introduced. The government’s exchange policy comes as good news to investors. Continuing with a programme started in May 1999, the government has abolished fixed exchange rates and allows them to change according to market demand.
These reforms that the government has put in place do not show immediate results. They do however, point to an attitude of forward planning that might be seen as an encouraging sign by potential investors.
Trade
The country’s oil exports form 90% of all exports. Other products include diamonds, gas, coffee, as well as sisal and fish products. They are exported to countries such as the US, Benelux countries, China and Taiwan.
Angola’s imports include machinery and electrical equipment, vehicles and spare parts as well as medicines, food and textiles. South Korea, South Africa, Portugal, the US and France are the main suppliers of these items to the country.
Business Travel
There are flights from South Africa to the country from Johannesburg.
Travel throughout the country has been hindered by the conflict and in many cases is almost impossible. The actions of UNITA in the past have also made the country very unsafe for travel. It is recommended that visitors make enquiries at their nearest embassy before traveling to the country.
The risk of conflict is supplemented by the lack of adequate medical facilities and supplies. Malaria, tuberculosis, cholera, polio, HIV-AIDS, hepatitis A, typhoid fever, yellow fever (regional), schistosomiasis (bilharzia) and dengue fever may be contracted while travelling in Angola
Communications and Infrastructure
The government announced plans to expand and rehabilitate the country’s infrastructure that has been damaged by the conflict. These improvements, some of which are underway and even completed, include the repair of dams, roads, the telephone network as well as the electrical grid. International agencies and various governments have provided the country with assistance in this area.
At present the telephone network is mainly limited to government and business use. There is only one Internet service provider. There are at least 16 operators licensed to sell mobile phones.
The roads and ports were possibly the worst hit by the war. The country’s infrastructure is often targeted by combatants as it severs supply lines. As a result the roads are very run down and in many cases impassable. Various international agencies such as the UN have targeted Angola’s infrastructure as an area of high priority in reconstruction programmes.
HIV/Aids
The civil war in Angola did much to isolate the country from the initial onslaught of the HIV/Aids epidemic. But they have since experienced a large growth in the number of those infected.
Donors actively provide assistance for the country in the form of financial packages, technical assistance and equipment. The government also established authorities in 1987 to deal with the problem of Aids and there was thus a well-grounded operation. But the efforts of these foundations have become largely ineffective as a result of the war and the resulting damage to infrastructure.
The country’s economy has suffered because the age group most infected with the disease is that which is also the most economically significant one to the country. The result is that production falls and business costs rise as a result of absenteeism and the loss of workers. This is not taking the additional medical costs associated with the disease into consideration.
Risk
The IMF conducted a consultation with the government in February 2002 and found that although the government had put in place some economic reforms, these were achieving the goals set out for them. The international body found that this was largely due to a lack of control over public spending. Projections were also made based on unrealistic figures. The risk in this situation lies in the fact that although it may seem that the government is trying to make reforms, they do not follow them through. This could have an effect on the way one conducts business as a result of the fact that there seems to be a lack of accurate information in the way of statistics and figures. This sort of information is essential when considering setting up business.
The level of corruption in the country is also a risk to investment. The IMF consultations with Angola also focused on this and outlined the necessity to properly record all transactions entered into. The level of corruption in the country is high. This might have an effect on some businesses wishing to establish offices, register a company or in terms of the issuing of relevant licenses. It is very important to be aware of this.
Outlook
The economic situation is not likely to see much change in the immediate future. There has been hope in the past with the government implementing economic reforms. But these have not had the desired effect, largely because of a lack of discipline as well as the fact that there is no reliable economic information available. The government has been encouraged start recoding correct information with regard to economic indicators as there decision shave been based largely ion fictitious information in the past according to the IMF report. If these measures are implemented then an improvement in the economic situation could be possible.
Although the death of Savimbi has presented new hope for the potential for peace in the country, there is still no significant material change to the political situation. The conflict continues with UNITA making demands and both parties feeling the weight of increased international pressure for a resolution. The situation could change if one of the parties swallow their pride and take the first step to negotiation. This is based upon the fact that both parties have expressed their willingness to at least negotiate a ceasefire agreement. But this rests on the preceding action of the opposition. Suffice it to say, the situation hangs in the balance.
Business Assistance
Angola has a number of chambers of commerce and industry and details of these can be found via our Organisation Search, as can details of relevant government departments. MBendi’s Company Search allows interested parties to find details of many Angolan companies
