Angola is among the five African countries recommended by consultants as the best investment destination for this year along with Ethiopia, Ghana, Mozambique and Mauritania.
The consultants consider that Angola benefits from the program with the IMF, leading to more investments, with “immediate opportunities” in oil.
The start of the economic recovery in Angola will benefit from the presence of the IMF to ensure market-friendly policies, “which will facilitate the business environment, which in turn will lead to more investment and expansion from a general point of view.
In the construction sector, “there are major infrastructure projects, such as the Luanda international airport, the Caio port project or the Caculo Cabaça hydroelectric plant, which are expected to undergo contract modifications by the State and reputational risks to contractors, as well as likely delays, as the agreements signed by the former Government are being re-examined by the current one.”
With much-needed banking sector reform, correspondent bank dollar clearing services should return, and commercial credit should become more readily available in the Angolan marketplace, helping to grow and diversify the economy.
Longer-term, it remains to be seen how committed Lourenço is to implementing the difficult but necessary changes required to put Angola’s political and economic landscape on a more positive trajectory.
Lourenco’s actions have already led to tangible evidence of increased investor confidence and interest. Mining – particularly diamond mining – is one sector where moves to break the stranglehold already led to increased investor interest. Since December the Ministry of Mining and Resources has been working on a new trading system, which is likely to allow for the presence of foreign traders.7 A forum on mining opportunities in Angola – particularly diamond, copper, iron and gold – held at South Africa’s mining Indaba in February.
Telecoms: This strategic sector stands out as a majör opportunity. In November 2017, a tender for a fourth telecoms license, and a planned sale of 55% of state-owned Angola Telecom, were both announced. MTN has publically indicated it is considering a bid. According to one interviewee for this report, “Lourenço has broken Isabel’s monopoly and I hear Vodacom have signed to become the fourth network provider.” The winner of the tender has yet to be announced, however, in February 2018 Vodacom had its multi-service licence in Angola renewed by telecom sector regulator Inacom.
Cement and construction: This sector appears promising in the medium term given its role in the country’s ongoing post-war reconstruction.
Tourism: The Angolan government is committed to a strategic drive to boost tourism as part of a 2011-2020 Strategic Plan, entitled the Tourism Master Plan. The plan has now entered its second phase of implementation, which includes a focus on regional visitors (i.e. from South Africa). Any operator working to increase tourism footfall into Angola will enjoy significant government support.
Financial services: Like Nigeria in recent years, Angola’s banking sector is heading into a period of consolidation which will be good for business efficiency in the medium term.
Retail: Investors new to the Angolan market will benefit from engaging constructively with the Lourenço administration and aligning with its reform agenda. The new government is making an effort to publish its strategic plans (i.e. PEM) and companies should seek to align themselves with the priorities set out in these. Also, the government’s one-stop-shop for business incorporation – see here – is, despite its dated marketing strategy, becoming more effective and has registered over 75,000 companies over the past decade.