Teste Angola

Angola 1

Special Advertising Supplement

ANGOLA September/October 2010

Saharan Africa’s biggest oil producer is defining its own new role in the region and the world, economically and diplomatically. The aim is to leverage oil revenues tobuild new infrastructure and advance health and education, studying but never simply copying what other countries have done. Entrepreneurs with internationalexperience are helping key sectors leapfrog to the latest technology.

Into the 21st Century

2 Angola

Angola is rushing into the 21st centurywith an almost palpable feeling ofoptimism, at least among the better-offin this West African nation of 13million. In many ways, it still seems the classic Third World dichotomy: high-end SUVs park outside trendyrestaurants while barefoot kids play in open sewage. But after centuries of colonial exploitation and decades of war, many Angolans believe they areat last on track to break the cycle and follow their own path forward.

“We are betting on development ⎯ we will always be Africans, but we are different fromthe rest,” said Julião Mateus Paulo, a veteranguerrilla freedom fighter who is now secre-tary-general of the ruling Popular Movementfor the Liberation of Angola (MPLA), in pow-er for a third of a century (see time line). Paulosaid he thinks Angola is unfairly judged bysome abroad who recall the MPLA’s revolu-tionary past: “We used to be Marxist-Leni-nist, but today we are social democrats.”

After the fall of the Berlin Wall, he said,Angola had to find a new political direction. “Weopted for a market economy, and that meanscapitalism, which of course can be cutthroat ormoderate. But we will never forget the socialcomponent, because education and health arevital for our population.”

The bottom line, Paulo said, is thatAngola is open to foreign capital: “Themore capital that comes to Angola the bet-ter, because we have a problem with unem-ployment and we can only attack that throughinvestment with domestic and foreign capital.”

The new approach seems to be working.Angola is awash with housing and infra-structure projects (see page 5), and theInternational Monetary Fund (IMF) pre-dicts 8.5 percent economic growth this year.

According to the United Nations Confe-

rence on Trade and Development, Angola received no less than US$15.5 billion of foreign direct investment (FDI) in 2008 ⎯about half of all the FDI going to less devel-oped countries. Most came from the UnitedStates, France and the Netherlands and wentprimarily to expanding the petroleum sector.Bucking last year’s global downward trend,non-oil FDI was up by 50 percent in 2009 toUS$1.8 billion, the Angolan InvestmentPromotion Agency reported.

Angola nevertheless struggles with pover-ty, inequality, weak institutions, a fragileyoung democracy, poor education, corrup-tion, bureaucracy, unemployment and bad infrastructure, curses common to Africa’spoorest countries. So why the optimism?First, because the government recognizesthere are many problems. It might believethey are sometimes unfairly magnified in theinternational press, particularly for a countryjust eight years out of colonialism, an inde-pendence fight and a civil war, but on mostfronts it accepts there is work to do.

Take corruption. Paulo agreed there’s aproblem, but downplayed it: “Corruption hap-pens in any country in the world,” he said, because “people don’t always have the con-science that they should serve their country.”He noted that President José Eduardo dosSantos often speaks of “zero tolerance.”

The U.S. State Department, in an Invest-ment Climate Statement on Angola pub-lished in early 2009, took a much harderline, suggesting that corruption ranges

high, wide and deep, but nevertheless conceded that “the government has madesignificant strides towards greater trans-parency.” It noted that Angola, prodded by theIMF, is now inviting major international ac-counting firms to audit the nation’s largestpublic companies.

The State Department report also recog-nized “an overall effort by the Government ofthe Republic of Angola to create a more in-

A new rolemodel for Africa

Introduction


vestor-friendly environment,” together withprogress in “establishing clearer written reg-ulations” and improvement in key financialsector indicators. Also, it noted the country’sprotection of basic intellectual property rightsand the low risk of political violence. Given theproblems that plague some other African na-tions, it might well have mentioned the ab-sence of religious extremism. Thanks to itslong Portuguese heritage, Angola is today apredominantly Christian nation, althoughindigenous beliefs retain a wide following.

Beyond tribalism Angola’s veteran freedom fighters turned pro-market national leaders now see themselves astrailblazers for a new Africa. “We feel a share of responsibility for the continent, for the region, because we have independent brothercountries that lack a strategic vision aboutthings, that are still wasting time with tribalismand racism,” said former Defense MinisterKundi Paihama, who now handles Veterans’Affairs. “We are concerned with education,health and the social area, but they (the othercountries) do not see that as a priority.”

Some international commentators havesuggested that the Angolan development mod-el, while producing impressive statistics for

Angola 3


Early history: Bushmen, huntersA.D. sixth century: Bantu migrate intoCongo region; bring knowledge ofmetalworking, ceramics andagriculture.1482: Portuguese traders arrive onCongo coast; first slaves acquired. 1575: Portuguese explorer Paulo Dias deNovais founds Luanda as “São Paulo deLoanda.”1836: Slavery officially abolished, withan estimated 3.6 million people shippedfrom or through Angola.1950s: Independence demands grow:MPLA is created in 1956; National Frontfor the Liberation of Angola in 1961; and National Union for the TotalIndependence of Angola (UNITA) in 1966.1961: Pro-independence guerrilla warstarts.1975: Independence from Portugal; civilwar starts within Cold War context;Agostinho Neto (MPLA) electedpresident.1979: Agostinho Neto dies of cancer;José Eduardo dos Santos (MPLA) electedpresident and re-elected in 1992.2002: UNITA leader Jonas Savimbi killedin combat; civil war ends.2003: United States recognizes Angola.2004: Oil production reaches 1 millionbarrels per day.2006: Ceasefire in break-away oil-richCabinda province recognized by UnitedStates, EU, Russia, African Union;Cabinda remains part of Angola; Chinaoffers Angola billions of dollars in loans.2008: MPLA wins 81 percent of vote in first parliamentary elections since1992; UNITA takes 10 percent. Foreignobservers question fairness of voting.2009: IMF approves landmark US$1.3billion loan.

Angola time line

GDP and investment, may be relying exces-sively on “trickle-down development” ⎯a po-lite way of saying that so far it appears to bebenefitting mainly the better-off. But nation-al leaders argue that their country needs to becompletely rebuilt, starting with the high-ways, ports and railroads. This will facilitate investment and modernization in agriculture,which currently employs roughly six out ofseven Angolans, thus boosting rural incomeswhile helping feed the population.

So widespread was the destruction duringthe civil war that the fertile country, formerlya food exporter, today imports many basics.“Now we have to fight to stop being economi-cally and socially dependent; we must produce.We will still import other things, but withintwo years we will ban the importation ofeverything that we can produce here,”Paihama said. “To do that, we must buildschools and train people. We must embracethe values of technology, democratization, so-cial inclusion, integration and popular partic-ipation at every stage of the process.” Angola’sdetermination to carve out a new role in theworld can also be seen in its foreign policy.

Closely intertwined, the government andthe ruling MPLA party appear to have put be-hind them any animosity toward their old

Portuguese colonial masters, the West in gener-al or the United States in particular for activelyhaving supported and armed the losing side inthe civil war.

“We used to have serious problems withAmerica, but we have been redefining our relations, and today the opinion is complete-ly different,” said Paihama, a confessed admir-er of former U.S. President Bill Clinton.“Gradually the Americans have come to understand us. And I cannot lie: There hasbeen a surge since Obama took office; todaythe atmosphere is very good.”

One striking feature of the new Angola isthe massive Chinese presence in civil con-struction and other areas of the economy,backed by multi-billion dollar loans fromBeijing. But Paihama rejects suggestions of atakeover. “We need to cooperate with every-body,” he said. “Our Chinese friends are help-ing, but they’re here to work and draw wages.When their contracts are up, they’ll go home.Nobody from China will give orders here.”

Chinese ambassador Zhang Bolun saidhis country was happy to help Angola, nowChina’s second-largest oil supplier. The coun-tries have exchanged military attachés, andChina may supply weapons and training in areas such as rebuilding Angola’s navy.

4 Angola

Angolans are determined to plot their own course — no cut-and-paste, cookie-cuttersolutions. But they pay attention to what other oil-rich countries have done.

Debate

THE ANGOLANMODEL

UNITED ARABEMIRATES

NORWAY NIGERIA VENEZUELA


Comparison: one third of the land area; aquarter of the population; seven times asrich; produces slightly more oil; reservesare half the size.

It might seem strange to compare Angolawith Norway, one of the richest countries inthe world, where public services are a globalbenchmark. But Norway has set an examplein maximizing the value of its oil and gas. Itcreated a sovereign wealth fund that feedsinto a national pension fund, designed toprotect current and future generations andcushion the country against the effects of anaging population. At the end of 2009, thepension fund stood at 2.8 trillion kroner(some US$440 billion), more than one year’stotal Norwegian GDP or roughly 1 percent ofthe value of all the world’s listed companies.

Comparison: less than one tenth of the landarea; less than half the population; six timesas rich; produces slightly more oil; reservesare seven times as big.

The UAE has been plowing much of its oilwealth into property and infrastructuredevelopment, seeking to become a globalhub for tourism, air travel, shopping, lightmanufacture, transshipment and financialservices. Completed or planned investmentsinclude the world’s largest airport, shoppingcenter and artificial island, not to mention theworld’s tallest building. A huge sovereignwealth fund set up in 1976, the Abu DhabiInvestment Authority, is the main driver. Thestrategy is to diversify the economies for apost-oil existence. Property investments tooka hit during the crisis.

Comparison: three quarters of the land area;almost 10 times the population; about one-third as rich, produces about the same amountof oil; reserves are almost three times as big.

Proportionally, oil has a similar weight in theeconomies of Nigeria and Angola: 40 percentof GDP and 80 percent of government revenuein Nigeria; around half and two thirds,respectively, in Angola. Nigeria has been rakingin oil wealth for half a century, but it’s dilutedamong a much bigger population. The countryhas built a lot of infrastructure and grownrapidly at times, but also suffered fromcorruption, mismanagement andenvironmental damage. Some non-oil industryhas been developed, including vehicles andtextiles. Much more could be done, particularlyin agribusiness.

Comparison: three quarters of the land area;roughly double the population; twice as rich,produces slightly more oil; reserves arealmost 14 times greater.

Another country that depends heavily on oil,which generates some 80 percent of its exportearnings and more than half of governmentrevenues. Decades of oil dollars brought somedevelopment and economic growth but failed topromote sufficient prosperity among the poor,thus paving the way for a populist government.Critics said the state oil company, PDVSA, hadbecome inefficient and costly, consuming anexcessive proportion of oil revenues in its ownoperations. In more recent years, PDVSA hasfailed to expand production; output in 2009 was30 percent below its 1998 peak of roughly 3.5million barrels per day.

ProAttempts to use oil revenues to financesocial programs; the question is how bestto do it.

ConA lesson for Angola that the interests ofnations and state oil companies are notalways identical.

ProImproved management seems to bepaying off: China will build an US$8billion refinery.

ConAngola must avoid the conflicts thatcurb production in the Niger Delta:spreading wealth helps.

ProAnother example of using oil wealth topromote development, leveraging astrategic location.

ConAngola lacks the United Arab Emirates’(UAE) central position between East andWest, and the critical mass of wealth.

ProExcellent example of using oil wealthresponsibly and preventing overheatingof the economy.

ConAngola needs to invest right now, torebuild infrastructure, create jobs andimprove education.

Note: All comparisons approximate; wealth comparison is GDP per capita in purchasing power parity; petroleum comparisons from BP Statistical Review of World Energy 2010.

Angola 5


Gaze around Luanda today and you will see21st century Angola being born, brick bybrick, girder by girder. Myriad new apart-ment blocks and offices represent the mostprosperous side of the booming capital city,whose population has more or less doubledto something like 5 million in perhaps 15years — the imprecision being a natural con-sequence of the pervasive lack of firm statis-tics. However, there’s much more to the newAngolan economy than just the tower cranespiercing the skyline or even the oil wealththat now generates around half of GDP.

The property boom is in part a conse-quence of oil revenues and the billions of dol-lars of foreign investment flowing into aneconomy that grew at above-Chinese rates forseveral years before the recent international cri-sis, and has pulled out of a momentary 2009dip on afterburner. The boom also reflects therapid expansion of local and internationalcompanies in numerous non-oil sectors.

Angola is unlikely to attract major tradi-tional manufacturing industries, such as au-tomakers, any time soon. The domestic mar-

ket is too small, the country is located in alargely low-income region and South Africa,the only substantial market nearby, already hasa midsize vehicle industry that is integratedinto global production systems.

What’s more, Angola lacks much of thebasic human capital and industrial infrastruc-ture needed to support world-class industries.But all small and developing economiesmust identify strategies and niches. ForAngola, this means moving ahead on threemajor fronts: improving the physical, humanand business infrastructure; developing effi-cient local suppliers wherever possible; andpromoting development in sectors where thecountry has a natural advantage.

Ports and people “Today the logistics platform is very impor-tant anywhere in the world; the more rapid-ly goods move, the lower the cost,” saidLeonel da Rocha Pinto, managing director ofMultiparques, a leading logistics company.

Port costs and delays are a common com-plaint among business leaders in Angola, and

private investment is part of the solution. Sinceit was created five years ago, Multiparques hasplowed some US$50 million into containerhandling equipment, trucks and a 60-hectaredry port with facilities for refrigerated contain-ers and the country’s only cargo scanner. “Iwas recently in Hong Kong to see their systemfor automatically registering the entry and exitof containers, feeding that directly into the taxinformation system,” said da Rocha Pinto,nicely illustrating both the opportunities andchallenges facing Angola. It’s a country wherea vast amount needs to be done, but it can alsoleapfrog straight to the latest technology.

Cheap labor doesn’t mean all companiesshould be labor-intensive. “Working without-of-date systems costs much more and cre-ates lots of problems; the more technology ina process, the better for the companies,” daRocha Pinto said.

Some years ago, Portuguese immigrantSergio Cubo set up Semec, a customs clearancecompany. Now he helps importers and exporters unravel the red tape of the import/ export bureaucracy. Clients are mainly Portu-guese, Chinese and Angolan companies bring-ing in drinks, foodstuffs, construction materi-als and equipment. “Angola survives on imports; without them business would simplystop,” he said.

The new Angola demands better physical, human and business infrastructure; moreefficient local suppliers; and development of sectors where the country has anatural advantage. It’s starting to happen.

The Luanda Bay Project is a showcase development to revitalizethe capital’s beachfront: a popular meeting place, leisure areaand home to the capital’s fast-growing financial district. Itincludes housing, highways, and business and commercial spacewith a multi-lane expressway and landscaped gardens.Dredging has removed polluted sediment from the bay, whichwas greatly degraded during the civil war, and has reclaimedlarge areas of land for development. The 15-year project startedin 2007 and includes an estimated US$2 billion in privatedevelopment plus US$135 million of public works.

Building the Angolan model

6 Angola

Cubo reckons to get containers out of theport in five or six days, but in cases of ur-gency he can manage it in 24 hours. “Ofcourse there’s a cost, but that’s inevitable,” hesaid. “In Europe there are situations that yousimply can’t resolve, but here everything canbe resolved, albeit at a cost.”

Both da Rocha Pinto and Cubo see hu-man resources as key to successful opera-tions. “Angola needs to pour resources intoeducation,” said da Rocha Pinto. “We canmake any kind of investment we choose, butif we don’t invest in people to operate themachines then that’s a real problem, becausewe’ll continue to depend on expatriate labor,and you can’t build a country that way.”Workforce training, he said, was his “prin-cipal, permanent challenge.”

Cubo stressed training but also employ-ment conditions: “A well-paid worker withall his needs met is half the battle.”Companies building the new highways,bridges and dams should also pay close atten-tion to staff qualification, said NunoGuimarães, head of Angolan operations forConduril. In Angola for two decades, thePortuguese-based construction company cur-rently has around 2,000 employees. Less than10 percent of them are foreign. “That’s belowaverage for our sector,” said Guimarães.Some Angolans grumble that Chinese con-struction companies in particular importcheap labor and deprive local people of jobs.

Guimarães attributes his high percentageof local staff to ongoing training in skills, safe-ty and quality. Conduril Academy, his latestproject, will offer theoretical and practicaltraining for the construction sector. A futurestep will be a similar school, open to the gen-eral public. Employee training is also criticalin high-tech services.

Building Angola


Carlos Brito, executive director of mobilephone operator Movicel, said he was happywith his level of staff skills but stressed theneed for training courses, in particular to in-crease the number of professional level po-sitions held by local staff. For his partMiguel Veiga Martins, managing director ofrival mobile phone operator Unitel, stressedthe role that high-tech companies can andshould play in helping develop local compe-tence. “Partnerships with Angola’s leadinguniversities are good for us because we haveaccess to the graduates, but they also helpdrive up general educational levels.”

Looking long term In many ways, businesses are building thenew Angola almost from scratch. Take insur-ance. “The market is just starting; it’s almostembryonic,” said Rui Campos, CEO of thefour-year-old insurance company GlobalSeguros. “It’s difficult to change people’smentality; the ‘now’ culture is giving way toa more midterm view, and with that comesthe habit of insuring against risks. But itdoesn’t happen overnight.”

Having opted for a flexible, fast-response,IT-based structure, Campos sees staff train-ing as fundamental. “Competent insuranceprofessionals are not available in Angola, sowe invest a significant part of our budget intraining our own.”

Developing modern financial infrastruc-ture also includes occupational pensions. Partof the challenge is fostering a more long-termview among people who for many decadeshave struggled just for daily existence, butLuís Alexandre, CEO of Cofre, the nationalpolice pension fund, urges flexibility.

The answer in Angola today is to combinewhat is the quintessential long-term business

01 02 03

Augusto da Silva TomásTransport Minister

In the driver’s seat Creating the new Angola involves many tough jobs,but few are more difficult than rebuilding thecountry’s transportation system, wrecked in theyears of war. Transport Minister Augusto da SilvaTomás lists just a few of the challenges — and theopportunities they create:Ports: Lobito is being developed as an internationalport to serve West Africa. There is a project in the worksto clear channels and berths currently blocked by shipssunk during the war — there were 80 wrecks in Luandaalone — and also plans for a deepwater terminal.Rail: A major repair and upgrading program is underway with Chinese help (see main story). Investmentswill restore the link to Zambia, offering a lucrativeexport route for that country’s minerals. Thestrategy is to separate rail infrastructure from railservices.Air travel: TAAG Angola Airlines, the national carrier,has invested heavily to upgrade its all-Boeing fleetand is once again cleared to fly into Europe. PrivateAngolan and foreign companies will be invited to bidfor airport management contracts.Metro: Studies are under way for a mass transitsystem in Luanda, essential to ease the capital’straffic congestion.Finance: An important consideration — Angola hascredit lines from China, Brazil, Portugal and Spain.But it must spend the money on goods and servicesfrom the respective countries.

Angola 7


with help for day-to-day needs like doctors’bills and small loans. Some products are of-fered in partnership with a local bank.Alexandre suggests that if Angola’s financialinstitutions get it right in the new emergingconsumer market, they can help change so-ciety: “Suppose a policeman thinks that theonly way he can make ends meet or have hisown home is by living off bribes. Well, if wecan show him that with his salary he can ob-tain microcredit — perhaps for his wife toopen a snack bar — and so maybe change hislife, we will soon have fewer cases of bribery.”

Local suppliers, naturaladvantages Angola imports way too much. It’s partly aconsequence of chronic underdevelopmentand partly a legacy of war. Now the govern-ment is anxious to boost local output wher-ever possible. Greater local food productionis an obvious target, both for reducing importsand boosting rural incomes. So is expandedlocal refinery capacity ⎯ Angola currently exports crude oil and imports most of its gaso-line. Another promising area is building materials, which are obviously in big demand.

One key project here is the plannedUS$294 million cement factory announced

for Lobito, a major port with a fine naturalharbor on Angola’s southern coast. Lobito isat the end of the 1,290-kilometer BenguelaRailway, which runs east to the border of theDemocratic Republic of the Congo, thendown to Zambia.

Both the port and the railway were bad-ly damaged during the civil war, but they arenow being brought back to life. Chinaclosed an US$89 million deal for locomo-tives, passenger coaches and freight wagons,and will train Angolan rail technicians.

Repair of Benguela and other railroads isessential to getting the economy movingagain. Angola currently has two main hard-currency earners, petroleum and diamonds,but until the war it had substantial iron oreexports. There are also deposits of man-ganese, gold, copper and many other miner-als. Various agricultural raw materials couldalso be exported.

There is also significant potential for fish-ing, particularly in the plankton-rich BenguelaCurrent that sweeps up the west coast ofAfrica. Angola, Namibia and South Africa areworking together to manage and preservethese fishing grounds, trying to protect themfrom over-fishing and to adapt them to cli-mate change in an integrated way.

Angola, old and new

01 The National Bank of Angola: foundedin 1864 by Portugal

02 Downtown Luanda: no stopping thegrowth

03 Port of Luanda: expansion under way04 Hydropower: self-sufficient in clean

energy05 Rail: nationwide upgrading after years

of neglect

• Population: 13.1 million• Population growth rate: 2.06%• Median age: 18• Life expectancy at birth: 48.5 (f), 44.6 (m)• Malnutrition in children <5 years old: 27%• Infant mortality/1,000 live births: 158• HIV/AIDS in population ages 15-49: 2.1%• Adult basic literacy: 67.4%• Internet users: 3.1%• Land-mine victims: 80,000 (max. est.)• Area with land mines (km2): 242-1,239 (est.)• Average income (annual, PPP): US$1,890

- Population <US$1.25/day: 54%- Population <US$2/day: 70%

• Income share (households):- Poorest 10%: 0.6%- Richest 10%: 44.7%

(Various sources; most recent available from 2000)

A country with a vast legacy of social challenges:Equitable development is the answer.

04 05

Social challenges

8 Angola

Angola CEOs

What is the key to success in one of the world’s most exciting emergingmarkets? Discover the secrets of some of Angola’s leading businessmen.

CEOS OF THE FUTURE

The U.S. State Department kicked off its 2009Investment Climate Statement on Angola asfollows: “Angola offers both high returns and greatrisks to investors and exporters.” Then it detailedsome of the challenges and opportunities discussedin this report. But what does it take to achievethose high returns and minimize the risks?The starting point is local knowledge.“Unfortunately in Angola we don’t have a lot ofinformation and Internet yet, so you have to comehere and get your hands dirty, put up with thetraffic and understand how things work,” saidTeddy de Almeida, president of the South Africa-Angola Chamber of Commerce. The next thing, whichis particularly relevant to foreign business people orAngolans who have trained and worked outside oftheir country, is to meld local knowledge withinternational skills and business practices. “Someforeign companies want to bring in their own habits,work systems and forms of organization, but theseare not always compatible with what exists here,”said Félix Cipriano Barco of Estilo Rouge, a family-owned furnishings and textiles business that movedfrom Portugal to Angola a few years ago. “We haveto adapt our needs to the possibilities of thecountry, and not vice-versa.”One of the greatest challenges for any modernexecutive is coming to terms with the slownessof decision-making in Angola. Labyrinth red tapeand a bureaucratic mind-set are a regrettablycommon legacy of Portuguese colonization, asanyone who has worked in Brazil will know. Theold Portuguese adage of public officials “creatingdifficulties to sell solutions” is far from extinct,although Angola is modernizing and bringing inlaws and systems to reduce such practices.Particularly aggravating can be the delays. “We Angolans tend to understand this, butcommunicating it to a foreign investor is morechallenging,” de Almeida said. “Visas, for example —sometimes people have to wait 14 days or more, so ifyou are a foreign investor, you have to develop thefruit of patience.”

INTERNATIONAL EXPERIENCE

Angola is hungry for the latest business practices and know-how. Many top business executives have studied abroad —Portugal is a popular option — and followed that up with aperiod of international work experience. Also, companies inAngola often import key skills.

USE THE BEST TECHNOLOGY

Angola wants to join the 21 st century, not the 20th. Thatmeans using the latest available technology rather than fallingback on traditional, labor-intensive options. Moderncompanies may currently seem like high-tech islands in agenerally underdeveloped economy, but that’s changing. Timeis on their side, and in Angola the clock is running very fast.

HARD WORK PAYS OFF

Entrepreneurs and corporate executives tend to work hardeverywhere, and Angola is no exception. “I put in 16 hours aday for many months when I started up my company,” saidSergio Cubo of Semec, while Wang Yuzhi, deputy generalmanager of the Sinohydro construction company, said that“investment in Angola takes a lot of hard work. ... The Angolangovernment wants fast construction and lower costs.”

CRISIS IS OPPORTUNITY

Some companies packed up and left Angola when therecent international crisis hit. Most are probablyregretting it now, as the economy bounces back. Ask anysuccessful businessman about the problems, and he canoffer a long list. But then ask about his returns. The IMFdoesn’t think the crisis has finished off Angola: In late2009, it approved a US$1.3 billion standby loan, and thisyear said that “reforms are beginning to bear fruit.”

THINK SOCIAL

Modern businesses in Angola are resourcecenters in a needy society. They can makea difference. Many business leaders seethis as an inherent responsibility, notcharity. Sponsoring education andtechnical training helps build a moreaffluent society and cements links withlocal communities. It also enhances acompany’s standing with the government.


CARLOS BRITO MOVICEL

Carlos Brito, executive director of Movicel, Angola’ssecond-largest mobile phone operator, is immenselyoptimistic about the future for telecommunications in the country and in manyother emerging markets.“Going back 10 years, the people using mobile telephony services around the world weredrawn 75 percent from the so-called developed countries and 25 percent from the so-called emerging markets,” Brito said. “Now the proportion has inverted, and estimatesare that in another 10 years the emerging nations will represent 85 percent of the globalmarket. Angola will certainly continue to see rapid growth in telecommunications.”Movicel started life as a subsidiary of Angola Telecom, the country’s state-owned fixedline and Internet operator, and was 80 percent privatized in 2009. Now it operatesnationwide with more than 3 million subscribers. A telecommunications engineeringgraduate with additional qualifications in business management, the Portuguese-bornBrito worked in his home country, Brazil, Mozambique and around Asia before takingthe reins at Movicel. Doing business in Angola was not fundamentally different, he said.“I’m very confident about Angola’s continued progress, and I think that businessmenwho have the necessary vision will find fertile ground here to expand their activities,”Brito said. “Angola offers great possibilities for investors from the United States and allaround the world; it faces explosive growth.”

“Businessmen who have the necessary vision will findfertile ground here to expand their activities. ... Angolaoffers great possibilities.”

LEONEL DA ROCHA PINTO MULTIPARQUES

Leonel da Rocha Pinto is not just the managing director ofMultiparques, a leading logistics operators. He’s alsodedicated many years to promoting paralympic sports. Thisyear he became president of the African SportsConfederation of the Disabled. Da Rocha Pinto’s story is remarkable. His family was split apart to become rural refugeesduring the civil war, and as a teenager he polished boots for South African troops inexchange for food. Later he rose to canteen dishwasher, scraping leftovers from the platesto help feed his mother and two younger brothers. From there he helped organize refugeechildren. Finally arriving in Luanda in 1985, da Rocha Pinto discovered his father had beenkilled by a land mine. A job with a state maritime transportation company led to his joiningNDS, a Dutch shipping line that was starting up in Angola. Five years ago, he foundedMultiparques. But he always finds time for paralympics, mainly helping amputee victims ofthe civil war and in particular the land mines that still plague the country; the InternationalCampaign to Ban Land Mines estimates the total number of Angolan land-mine casualtiesto be approximately 80,000, and 2008 data shows there is an average of one new victimper week. “Most of the people we work with are products of the war,” da Rocha Pintosaid. “They are social outcasts, so we seek to show the nation that disabled people are notuseless. They can do anything; they can make others happy.”


“The people we work with are products of the war ....They are social outcasts, so we seek to show the nationthat disabled people are not useless”

Angola 9

10 Angola


CEO VERDICT

SERGIO CUBO SEMEC

Work hard and enjoy every minute — that’s the recipe for success offered by SergioCubo, founder-manager of Semec. He worked in the import/export industry in hisnative Portugal before opting for the better prospects he saw in Angola. Initially Cuboworked with existing companies, gaining local experience. Then, in January 2009, heset up Semec to focus on customs clearance, transportation and logistics.“What I like best about working in Angola is that there’s always so much to do; theplace is bustling and I like to work 60 minutes in each hour,” he said. “It’s a constantbattle, in all areas. Every day there are complicated cases to resolve, but that’s one ofthe things that I enjoy — solving problems.”Cubo has watched Angola since before independence. Now he calls it a country of thefuture. “I have often said that I won’t leave here as long as I live. This is a place whereyou can do great and profitable business, and even though it can be difficult to comehere, everyone should be betting on this country.”

RUI CAMPOS GLOBAL SEGUROS

Global Seguros is fairly small by world standards for insurance companies, but it has grownfast since it was founded in 2005. Now CEO Rui Campos is seeking to leverage his domesticstrategy into expansion of international relationships.In 2009, the company billed total premiums of US$20.4 million derived mainly fromautomobiles (39 percent), workplace accidents (25 percent), construction (15 percent),corporate multi risk (12 percent) and airplanes (5 percent). This generated reinsurance ofUS$8.8 million that was split between Munich Mauritius Re, Mapfre Re (Spain), Africa Re(South Africa) and SCOR (France).“These companies are also a source for the know-how that we need, because we are stillbeginners in this activity,” said Campos, an Angolan who studied in Portugal and France.Mapfre, in particular, helps with staff training.In addition to local Angolan individuals and companies, Global Seguros countscorporate customers from Portugal, Brazil and France. However, Campos plans asectorial rather than geographic strategy for widening his international links: “Our ideais to focus on the areas and sectors that we specialize in, rather than worrying if acompany is from Portugal or China.” Global Seguros currently ranks third or fourth in the Angolan market in terms of policyvolume, Campos said. Looking to the long term, he wants to make the company abenchmark in the local insurance sector for the way it handles risk, and for achieving agood balance between offering a great working environment and providing shareholderswith a satisfactory return.

“This is a place where you can do great andprofitable business ... everyone should bebetting on this country.”

“Our idea is to focus on the areas and sectors thatwe specialize in, rather than worrying if a

company is from Portugal or China.”

Rua Frederich Engles, 92, 10 Andar, Apt. GLuandaTel: (+244) 222 336 190

Growing with Angola

projecting the future

www.aldeianova-ao.comwww.aldeianova-ao.com

Rua Frederich Engles, 92, 10 Andar, Apt. GLuandaTel: (+244) 222 336 190

MIGUEL VEIGA MARTINS UNITEL

Miguel Veiga Martins is one of a growing number ofhighly qualified globe-trotting executives who arehelping Angola to bypass the old technologies and movestraight into the 21st century with a nationwide mobilephone system. An electronic engineering andtelecommunications graduate from Portugal’sprestigious Higher Technical Institute, with postgraduatetraining in network engineering and ISDN technology,Martins is now managing director of Unitel, Angola’slargest mobile operator. With almost 6 million subscribers in around 120municipalities nationwide, Unitel claims 90 percent ofthe nation’s wireless telephony coverage and 65 percentof its mobile telephony market.Helping Martins conquer this fast-growing market hasbeen his previous experience with Vodafone in Portugaland England, and before that with Cisco Systems astechnical support director for Southern Europe. “We’re areference in Angola, not just for our size but for ourclient relations,” said Martins, who points to SMS andvalue-added Internet-based services for businesses aspotential growth areas. Now Unitel is seeking to addother international links and activities to its existingpartnership with Portugal Telecom: “We want to bringin more people with international experience.”

“We’re a reference inAngola. ... We are lookingto bring in more peoplewith internationalexperience.”

12 Angola


Angola 13

FÉLIX CIPRIANO BARCO ESTILO ROUGE

Five years ago, Felix Cipriano Barco talked his mother into moving theirfamily-owned furnishings business, Estilo Rouge, from Portugal to Angola,and his friends called him crazy: “They said there was no point in giving upeverything in Portugal and coming to an African country, in particularbecause Angola had been at peace for such a short time.”Barco, a civil engineer, first visited Angola in 2002. “Something clicked,”he recalled. “I started studying the country and thought about opening upa subsidiary.” With three decades in the textiles industry in Portugal, theBarco family decided Angola was a good place to make curtains andfurnishing fabrics. Real local competition was pretty scarce. As thecountry’s potential became clearer, they brought in a local partner withgood knowledge of the market and took a bold decision: “Instead ofkeeping the head office in Portugal with a subsidiary in Angola, we didexactly the opposite.”Today, they’re planning a subsidiary to make prefabricated houses andconsidering going international. Mozambique or South Africa are likely firststeps, within a couple of years, but that would be just the start. “We wantto show that a company born in Angola can demonstrate professionalismand quality anywhere in the world,” Barco said. “Some years from now, wewant to be represented on all five continents.”

“We want to show that a company born inAngola can demonstrate professionalism andquality anywhere in the world.”

NUNO GUIMARÃES CONDURIL

Portugal and Angola are bound together by more than fivecenturies of shared history, much of it sorely blighted by slavery,colonialism and a bitter struggle for independence. But today, thatshared inheritance is helping to empower bright youngprofessionals like Nuno Guimarães. He grew up in Angola with dualcitizenship, studied civil engineering at Minho University in Braga,Portugal, and now heads Angolan operations for Conduril, aPortuguese-origin construction company. “Angola is today ourlargest market for billing and business volume,” he said.

LUÍS ALEXANDRECOFRE (CPPPN)

Today a police pension fund; tomorrow a major financial institutionwith international connections. That’s the dream — and strategy —of Luís Alexandre, who was elected president of Cofre, the NationalPolice Welfare Fund, in 2007. He’s built up his membership to92,000 and now seeks links with one or more internationalinstitutions. “We want partners who add value, who bringdevelopment for the country,” he said. “Too many investors justlook for an easy profit; we want know-how, innovation, a seriousapproach and, of course, money to invest.”

“We want partners who add value, who bring development. ...Too many investors just look for an easy profit.”

Common Portuguese-Angolan heritage breeds newgeneration of professionalsand entrepreneurs.


14 Angola

Big projects to boost oilwealth and exports

Petroleum


ANGOLA’S challenge is to increase localadded value and make sure that oil revenuesare spent wisely to develop the rest of theeconomy, for example by financing new infrastructure. Two major projects are underdiscussion, the first being a refinery atLobitos, on the coast south of Luanda. Anexisting refinery supplies roughly one thirdof the country’s 120,000 BOPD fuel require-ment; the balance is imported.

With a projected capacity of 200,000BOPD, Lobitos would eliminate imports andleave a surplus for export. U.S. engineeringgiant KBR was hired in 2008 to design theestimated US$6.4 billion project. Similarly,an international team was hired in 2005 todesign a 5 million metric tons-per-year natu-ral gas storage and liquefaction plant nearSoyo, in northern Angola, fed mainly fromoffshore fields. Currently the country flaresoff most of its gas, losing valuable export do-llars in the process. The United States is thetarget customer for gas exports.

Both projects have been under discussionfor several years. Now, Petroleum MinisterJosé Maria Botelho de Vasconcelos is confident they will move ahead. “At this moment, the conditions have been created sothat it can be built. ... I think we will start to

Oil drives Angola. It generates around half of the country’s GDP and more than over 96 percent of its export earnings, contributingroughly two thirds of government revenue, according to IMF estimates. But while oil is so important, it has little multiplier impact— virtually all the oil is exported crude, and it has not yet spawned significant growth of support industries in the supply chain.

José Maria Botelho de VasconcelosPetroleum Minister

How can Angola’s oil wealth help promotedevelopment?Oil money is paying to rebuild our infrastructure —highways, bridges, new housing projects, powerstations and so on. If we can boost revenues, Angolacould make a major leap; we could become self-sufficient in food and improve the level of educationand the standard of living of our citizens.

The government is also interested in biofuels ...We have a project to produce ethanol fromsugarcane, but we are also looking at producingbiodiesel. We have a lot of good land in Angola, butalso some not-so-good land. That’s where we’relooking at jatropha to make biodiesel.

Q&A

see work this year,” he said. Angola is an increasingly important oil producer, with anaverage 2.01 million BOPD in 2008, accor-ding to the U.S. Energy InformationAdministration (EIA). Production fell to1.82 million BOPD in 2009, but Nigerianoutput fell even further and Angola becamethe largest sub-Saharan producer. The UnitedStates and China are lead customers, taking31 percent and 29 percent, respectively, of total oil exports in the first half of 2009, theEIA said. All foreign oil companies mustpartner with the state-run Sonangol.International oil companies operating inAngola include BP, Chevron, Total,ExxonMobil, Eni, Sinopec and CNOOC.

Angola 15


Is this a mixture of capitalism and socialism?Well, I’m a Keynesian liberal, and the socialistaspects of the project are not so major. This isn’tkibbutz spirit; the villages have a logistics centerwith various small factories, and we want tomaintain social cohesion by having families sellproduce there, but they’re not obliged to.

Do these projects take Angola back to itsagricultural roots?Some people — including many foreign NGOs —seem to have an ideological interest in keepingAfrican agriculture traditional. Well, traditionalAfrican agriculture might have had many interestingcultural aspects, but it was a disaster. The proof ofthis is that it kept Africans poor for thousands ofyears. It meant burning; no property rights —everything that impedes modernization.

How should Angola develop?We should dedicate maybe two thirds of ourterritory to nature reserves ... and try to promotegrowth of small rural towns surrounded by fertileland, like in the United States and Europe. Oil won’tlast more than 20 or 30 years.

Q&A

One major government-sponsored project iscalled Aldeia Nova (New Village). The goalis to settle thousands of small farmers intonew communities with core services, for ex-ample schools and small factories, to processtheir produce.

In the 1950s and '60s, Portugal set upsome 30 agricultural colonies around thecountry that were to be inhabited byPortuguese settlers. With independence andthe civil war, these communities were aban-doned and became largely overgrown. Nowthe aim is to clean them up and see what in-frastructure can be used.

This year, one project called Quiminha re-ceived roughly US$200 million in internation-al financing to settle 310 families on 6-hectareplots, each with a 100-square-meter housewith running water and sewage, plus 64 pri-vate farms of 50 hectares each. Candidates for

Aldeia Nova projects are chosen in an annu-al selective process.

Former soldiers — whichever side theyfought on — receive a minimum 30 percentshare of places. Some projects aim for larger-scale production, for example with sugarcane.“We want to involve private investment,” saideconomist José Cerqueira, director of AldeiaNova. The idea is to leave perhaps 50 percentof the area available for private investors toplant, with technical support from Aldeia Nova— which in turn is receiving know-how fromBrazil’s Campinas Agronomy Institute and theTechnical University in Lisbon. Sugarcane canbe the feedstock for biofuels and bioelectricityproduction, with private companies providingthe processing infrastructure. “Aldeia Novaprojects won’t resolve all the questions of ruraldevelopment, but they can make an importantcontribution,” Cerqueira said.

A new Angolan modelAgriculture

The civil war was a tragedy for Angolanfarming. Before the war, the country feditself and had valuable exports. Today,though most Angolans still work on theland, food is imported. Everyone fromthe government down understands thatkick-starting Angola’s agriculturalsector is crucial to the nation’s future.The question is how.

José CerqueiraAldeia Nova

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Editor-in-Chief Stella KlauhsProduction Director Rafael MuñozProject Director Carla de Campos,Neil Breslin Jr.Research Director Adrián Viñuales

Writer Brian NicholsonCreative Director Marta ConceiçãoPhotography Sammy, LeandroSantana, Emanuele Giusto,iStockphoto, SXC, Peninsula Press

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