Transcript Doing Business in Angola

1
Africa Infrastructure Investment
Conference
Angola Business Opportunities
Economy,Infrastructure and Industry
July 18-19 2013
Presentation by:
Maria Luísa Abrantes, PhD
Chair and CEO of ANIP
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ANIP – Angolan National
Private Investment Agency
• ANIP is the only government entity
responsible for the execution of the
national policy on private investment,
its promotion, evaluation, approval and
monitoring.
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Angola
• Geographical location data : West Coast of Southern Africa
• Area: 1,246,700 km²
• Maritime Frontier: 1,650 km (Atlantic Ocean)
• Land Frontier: 4,837 km (Democratic Republic of Congo, Zambia and Namibia)
• Climate: Tropical
• Average Temperature : 30ºC (max) 17ºC (min)
• Inhabitants: 20,900,000 (projection)
• Capital: Luanda (more than 5,000,000 inhabitants)
• Administrative Division: 18 Provinces
• Main Ports: Lobito, Luanda and Namibe
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Angola
• Main Rivers: Kwanza, Cunene and Cubango
• Highest Point: Moco Hill (2,620m) in Huambo
• Main Beaches: Ilha do Cabo, Palmeirinhas and Mussulo in Luanda; Baía Azul, Cota and
• Caotinha (Benguela); Restinga (Lobito); Miragens, Azul (Namibe)
• Language: Portuguese (official), plus diverse local dialects, such as Umbundu,
• Kimbundu, Kikongo, Fiote and Chokwé
• Main Religions: Catholic and Protestant
• Currency: Kwanza (AKZ)
• Head of State: The President, José Eduardo dos Santos
• Government: Democracy led by MPLA
Introduction
•
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Angola is strategically located on the Atlantic Coast of West
• Africa, acting as a gateway to Southern and Central Africa by road
and railroad networks.
• Angola holds approximately 12% of Africa’s hydrographic network
and 7.4 million ha of arable land.
• Angola is one of the fastest growing economies in the world,
anticipating a GDP of 7.1% in 2013.
• From 2002 to 2008, average GDP stood at 15.3%.
• From 2000 to 2012, average GDP stood at 8%.
• The IMF has stated that Angola’s governance and accountability are
good.
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• As recommended by the IMF, international revenue reserves
stand at over USD 30 billion, helping to stabilize the inflation
rate of Angola’s currency, the Kwanza.
• The Angolan government’s main goals are to revamp and
develop the economy by diversification, prioritizing the
rehabilitation and construction of basic infrastructure, to
enable the flow of people and goods, as a result of private
investment in agriculture, agri-business, industry and fisheries.
• The main target is to reduce poverty and regional asymmetries.
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▫ From 2000 to 2011, the Angolan government invested an
average of USD 4.7 billion per year in order to rehabilitate
infrastructure.
▫ From 2013 to 2017 the government plans to spend an average
of USD 1,4 billion per year to rehabilitate infrastructure.
▫ From 2002 to 2012 the Government rehabilitated 11 Airports
and is currently constructing the new Luanda International
Airport extending over an area of 1,324 hectares, having also
rehabilitated 7,829 km of roads, 2,000 km of railroads and
552 bridges.
▫ Five damns were rehabilitated, namely:
 Mabubas, Gove
 Matala, Lomaúm
 Capanda (1st phase).
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What are the Advantages of Investing in Angola?
•
•
•
Angola owns one of the greatest hydrographical
network in all of Africa; and its main rivers are
Kwanza, Zaire, Cunene and Cubango
Rich in flora and fauna
Diverse mineral ores : diamonds, iron, gold, phosphates,
manganese,
copper,
lead,
zinc,
tin,
wolfram,
tungsten/vanadium, titanium, chrome, beryllium, kaolin,
quartz, gypsum, marble, granite and uranium
• 7.4 million hectares of arable land and pastures, from
which less than 3% are cultivated
•
Political and economic stability since 2002
•
Angola is member of
MIGA- Multilateral,
Investment Garanty Agency From the World Bank.
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Macroeconomic Indicators
2010
2011
2012
2013
696
605,9
657,3
673,5
77,9
110,1
103,8
96
3,4
3,9
8,1
7,1
° Non- Petroleum GVA growth rate %
7,8
9,7
9,1
6,6
° Petroleum GVA growth rate %
-3
5,6
4,3
7,3%
° Annual inflation rate %
15,3
11,4
9,02
9%
Fiscal (Percentage of GDP):
° Revenue
° Expenditure
43,7
42,2
43,3
38,2
36,5
2,90
33,4
1,4
35,6
9,4
41,6
-3,4
Premises of the Economic Policy:
° Annual oil production (million/bbl.)
° Oil Price (USD/bbl.)
Goals of the Situation:
° General rate of growth of GDP %
° Public deficit
GDP (2012): USD 114,14 billion
GDP per Capita (2012): USD 6,200 per year
Source: http://www.minfin.gv.ao/docs/dspOrcaCorren.htm
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The Main Commercial Partners of Angola
Angola 2010
2011 2012
Products
Main
Commercial
Partners
Machinery,
Portugal, China,
Electric
USA, Brazil,
USD USD USD
Equipment,
South Korea,
Imports 18,1
19,75 22,32 vehicles and parts,
France,
medicines,
food
biliões biliões biliões
Netherlands,
products, textiles,
South Africa
military goods.
China, USA,
USD USD USD Oil, diamonds,
France, South
Exports 52,3
Africa,
65,8 71,95 sisal, fish, timber,
cotton
Canada,India,
biliões biliões biliões
Taiwan
Source: https://www.cia.gov/library/publications/the-world-factbook/
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Investments Distribution
Foreign Direct
Investment in
Angola
(2012)
USD 115.5
billion
Foreign Angolan
Direct Investment
(2012)
USD 8.196
billion
Source: https://www.cia.gov/library/publications/the-world-factbook/
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Angola Needs
• Rehabilitation and construction of basic infrastructures
• Development of the network of water and energy
• Construction and reconstruction of roads, bridges, railways,
ports and airports
• Modernization and increase agricultural production
• Creating jobs through the implementation of new industries
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Incentives are Given to Priority Areas
Infrastructures
Telecommunications;
Agriculture and cattle
breeding;
Fisheries
Transportation;
Industrial hubs and
free zones;
Industry
Education and Health
Energy and water;
Hotel and Tourism
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Reserved Sectors of
the Government
Government must be
major shareholder
- Production, distribution and
sale of war material;
- Local infrastructure when
part of the basic
Telecommunications System
- Central bank and matters
related to national currency
- Postal Services
- Ownership of ports and
airports
- Basic infrastructure for the
national telecommunication
networks
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Transfer of Dividends
Zone A:
From USD 1 million up to USD 10 million,
transfer of dividends upon third year.
Luanda, principal municipalities From USD 10 million up to USD 50 million,
of Benguela, Lobito, Huila and transfer of dividends upon second year.
Cabinda
From USD 50 million, transfer of dividends upon
first year.
The
rates
of
dividends to be
transferred will be
negotiated on a
case-by-case basis
From USD 5 million, transfer of dividends upon first
Zone B:
and must be part
year.
Remaining municipalities of
of an investment’s
Benguela, Cabinda, Huíla, Kwanza
articles
of
Norte, Kwanza Sul, Bengo, Uíge, From USD 1 million to USD 5 million, transfer of incorporation.
dividends upon second year.
Lunda Norte and Lunda Sul
Zone C:
Huambo, Bié, Moxico, Kuando
Kubango, Cunene, Namibe,
Malange and Zaire
To be Negotiated
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Tax Incentives
Economic Zones
Industrial
Tax
Capital
Property transfer
Gains Tax
Tax
Criteria for
Applying
Maximum Limits
1 to 5 years
For the acquisition of
Up to 3 years
land and real estate
connected to the project
Investments ≥ USD 50
million; Investments
which generate ≥ 500
jobs;
1 to 8 years
For the acquisition of
Up to 6 years
land and real estate
connected to the project
Zone A
Luanda, main municipalities
of Benguela, Lobito, Huila
and Cabinda
Zone B
remaining municipalities of
Benguela, Cabinda, Huíla,
Kwanza Norte, Kwanza Sul,
Bengo, Uíge, Lunda Norte
and Lunda Sul
Zone C
Huambo, Bié, Moxico,
Kuando Kubango, Cunene,
Namibe, Malange and Zaire
1 to 10 years
For the acquisition of
Up to 9 years
land and real estate
connected to the project
Investments ≥ USD 20
million; Investments
which generate ≥ 500
jobs;
In Zone C the subcontracts could also be eligible for tax exemption and reduction.
The tax incentive is granted after the implementation of the project and at least 90% of the estimated
work force being in place. The reduction in the percentage of the rate of tax may not exceed 50%.
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Tax Incentives
• Tax incentives and benefits do not constitute a rule.
• They are not granted automatically or for an indeterminate period of time.
• When considering the proportion and scaling of tax and customs incentives and
benefits to be granted, criteria must take into account:
a) The type and value of investment.
b) The investment’s insertion into the country’s economic development
strategy.
c) Perception of direct and indirect capital gains.
d) Complexity of investment.
e) Estimated time required for a return on capital.
f) Type of technology to be utilized.
g) Commitment to reinvestment of profits.
h) Volume of goods or services to be produced.
i) Creation of production lines.
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Tax Incentives
• Tax incentives or tax reductions are granted after negotiation
on a case-by-case basis.
• An extraordinary tax incentive could be granted to:
a) Investments declared highly relevant for strategic
development.
b) Investments capable of creating at least 500 jobs.
c) Investments capable of contributing to a major boost in
technological innovation and scientific research.
d) Annual exports that could exceed USD 50 million.
e) Investment projects evaluated at above USD 50
million.
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Infrastructure Sector
July 17-19, 2013
Presentation by:
Maria Luísa Abrantes, PhD
Chair and CEO of ANIP
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1. The Transportation Sector
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Strategy
-Privatization, so that resources managed by the state could be
transferred to the private sector.
-Integration of Angolan transportation network into the SADC network.
- Creation of authorities on an institutional level for the planning of road
network.
-Creation of public institutes as regulatory bodies for different
transportation subsectors.
- Development of the three main corridors, originating from ports, by
regenerating rail companies.
- Revamping and modernizing ports and the shipping sector, bringing in
private enterprise and appropriate management to re-establish the
competitiveness of national companies.
- Institutional reorganization and strengthening.
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Areas of Investment
Road Transportation
-Interprovincial and intermunicipal passenger transportation.
- Medium and long haul transportation of goods.
Rail Transportation
- State ownership and operation, through the CFL, CFB and
CFM.
-Open to private investment in the concession process,
arrangement of funds, technical assistance and repairs, and
supply of rolling stock, communications, etc.
-The government has approved a preliminary study, called
“Ango Ferro”, to refurbish, upgrade, construct and extend the
whole of Angola’s rail network.
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Areas of Investment
Corridors
- Malange, Lobito and Namibe.
-The government believes that these three corridors
warrant the same degree of priority, constituting an
open area in which both public and private investment
can operate, since they act as a support for the
development of the national economy, access to the
sea for land-locked countries, and stimulate regional
development.
Ports
- Open to private investment in the concession
process, arrangement of funds, technical assistance,
supply of equipment, communications, etc.
- Leasing port: Luanda.
- Operating ports: Lobito, Namibe, Cabinda, Soyo and
Porto Amboim.
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Rehabilitated Airports
Airports
City
Area
4 de Fevereiro
International
Airport
Luanda
17 de Setembro
Airport
Benguela
4000 m²
Mukanka
International
Airport
Lubango
*
Passengers Parking
Capacity Capacity
Services
856
restaurants, bars, cafes,
lounges, VIP/CIP and
Special Visitors,
Executive and first Class
passengers, Duty Free,
taxi
400000
*
13 commercial spaces,
VIP lounge, taxi to
Benguela and Lobito
500000
300
restaurants, stores,
special lounges, taxi
37543 m² 3,6 million
Catumbela International Airport
Catumbela
Saurimo Airport
Lunda-Sul
Joaquim Kapango Airport
Kuito
Luena Airport
Luena
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2. The Power Sector
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Short-Term Projects
Production
• Rehabilitation and upgrade of production capacity of
hydroelectric power plants (Cambambe and Gove)
• Construction of mini- hydroelectric plants (Chiumbe-Dala, in
Moxico)
• Installation of gas turbines in Cabinda, Namibe, Dundo, Xagongo
and Ondjiva
Distribution
• Rehabilitation of the transportation and distribution network
(Luena, Ndalatando, Malanje, Menongue and Soyo)
• Completion of Capanda-Luanda lines
• Interconnection of Northern, Central and Southern electrical
system
• Connection of the city of Uíge to the Northern system
• Electrification of urban centers
• Extending of electrification to rural areas (solar village project )
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Medium-Term Projects
• Completion of works on Cambambe (960 MW) and Laúca
(2,000 MW) dams
• Construction of new hydroelectric power plants on the
Kwanza river (Caculo-Cabaça)
• Increase in national generation capacity, by 2025, taking it
from 1,000 MW to 9,000 MW (essentially for hydro and
natural gas resources )
• Boosting of renewable energies
• Beneficial utilization of other endogenous resources, which
can take on a complemental role
• Construction of large hydroelectric and natural gas
combined cycle power plants
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Energy Production Projects
1. Natural Gas
▫ Soyo power plant (2015): fired by LNG. Investment of
USD 2.5 billion, with a capacity of 750 MW.
2. Wind
▫ Wind farm in Tombwa: the Namibe area boasts the most
wind potential (5.2 m/second).
▫ Hybrid system (100 MW of wind power, solar - 4.2 MW,
and thermal - 2 MV).
3. Solar
▫ Solar Village Project : solar panels in rural communities
(1st phase: 18 villages, 2nd phase: 42 communes).
4. Biomass
▫ Project A: Beneficial utilization of central plateau forestry
resources, along the Benguela railroad trajectory .
▫ Project B: Production of energy through combustion of
solid waste.
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Currently Operating Power Plants
Luanda
CFL
Boavista
Cazenga
Benfica
Morro Bento
Km 9 Viana
Morro da luz
Quartéis
Viana
Total
Source: Ministry of Energy & Water
MW
120
100
100
40
40
40
30
30
18
538
Provinces
Namibe
Lubango
Moxico
Dundo
Menongue
Cabinda
Bié
Cunene
Huambo
Benguela
Uíge
Total
MW
20
80
15
30
10
70
10
10
15
22
3
285
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Total Production Costs (USD/MWh)
Investments needed by 2015 (USD billion)
Angola LNG
2
Refining
8
Logistics
2
Retail
3
Total
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Priority technologies (USD/Mwh)
65
CCGT
75
Gas
80
Coal
95
Hydro
Complementary technologies (USD/Mwh)
140
Mini-hydro
155
Wind
170
Diesel
210
Biomass
320~425
Solar
Source: Ministry of Energy & Water - Master Plan 2012 - 2016
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3. The Water Sector
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• Angola ranks second in Africa when it comes to
water resources, with abundant rainfall in
almost all the country.
• In 60% of Angola an average annual rainfall of
some 1,000 mm is recorded.
• Only 42.6% of the population (59.1% rural and
23.4% urban) has access to potable water.
• 59.6% of the population (59.1% rural and
23.4% urban) has access to piped water
• It is worthwhile to see the cities’ infrastructure,
stretching grids, water treatment, supply and
sewage system.
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Dam Capacities (MW)
Kwanza River
Capanda
Lauca
Caculo-Cabaça
Cambambe
Total
Cunene River
Gove
Matala
Jamba la mina
Jamba la Oma
Ruacaná
Total
Others
Luachimo (Lunda-Norte)
Chicapa (Lunda-Sul)
Chiumbe Dala (Lunda-Sul)
Mabubas (Bengo)
Lomaum (Benguela)
Total
Overall Total
Source: Ministry of Energy & Water
2012
520
180
700
60
20
240
320
4
18
26
60
108
1208
2017 (proj.)
520
2069
2047
960
5596
60
40
126
50
240
516
36
36
12
26
60
170
6282
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Goals to be Achieved
• “Water for All” Program (USD 650 million): to cover 80%
of the water supply in rural areas.
• Construction of 5,000 new points and rehabilitation of
2,000 fountains.
• Provision of a per-capita minimum of 40 liters/day
(fountains) and 70 liters/day (household water
connections).
• Provide the 21 major hydrographic basins (43% of
national territory) with integrated water resource
management plans.
• In 2015, 20 million people will have access to sanitation,
raising the proportion of people to 59% in rural areas and
81% in urban ones.
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• The Biopio and Chicapa dams need to be
rebuilt.
• A regional project for the Okavango River will
cover an area of 323 square kilometers.
• 94.5% of the volume of water lies in Angola,
with 2.9% in Namibia and 2.6% in Botswana.
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4. The Telecommunications Sector
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Delimitation by law of sectors
Law Nº 5/02 of April 16, 2002.
Absolute Reserve of the State: Basic
telecommunications network.
Relative Reserve of the State:
Telecommunications services for public use.
and Economic activities liable to be engaged
in by entities not belonging to the public
sector, by way of a concession agreement.
Challenges
Increase competition in telephony market.
Improve internet services offer and
universalize it.
Improve corporate segment offer.
Develop national and international
backbone.
Regulate pay-tv duopoly.
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Major Liberalized Market Operators
-Cellular Telephony Business:
UNITEL and MOVICEL.
-Landline Service Licenses:
Mercury (Sonangol
Subsidiary), Nexus, Wezacom
and Mundo Startel.
-Data Communication
Licenses: Multitel and ACS.
-Ten authorized ISPs.
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Business Opportunities in The
Industrial Sector
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1. Agro-Industries
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Advantagens
• Internal market potential;
• Agrarian potential due to 3 million
hectares of arable land;
• Favorable climatic conditions;
• Genetic biodiversity;
• Environment without a polluted
atmosphere or soil;
• Existence of abundant water;
More irrigated areas:
Bengo, Cabinda, Luanda and Huíla.
Major Crops:
Tubers, cereals and fruits.
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Government Programs
• Promotion of agro-business:
▫ Agro-industrial hubs
▫ Cofee and Palm Oil development
programmes
• Construction and rehabilitation of
infrastructure in irrigated areas
warehouses ans silos
• Research and development
• Training
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2. Manufacturing Sector
44
Priority Industries
• Agro-industries;
•
•
•
•
•
•
•
•
•
▫ Foodstuff Industry
▫ Milling Industry
Beverage industry,
Packaging industry;
Tanning and Pelt industry
Textile Industry;
Paper industry;
Rubber industry;
Electrical equipment industry;
Chemical industry;
Light metal and metal
products;
• Construction material;
• Automotive industry;
45
2013 – 2017 Goals
• Provide support for competitive substitution of imports and promotion
of exports through incentive systems and the temporary protection of
emerging industries;
• Provide support for rural economy;
• Produce more studies and/or programs for the launch of more
substantial industrial investments;
• Increase natural resources value chain;
• Upgrade existing industrial equipment and promote the monitoring of
industrial structure;
• Promote industrial development at regional level, underpinning it on
industrial development hubs and special economic zones;
• Regulate restructuring, legal and privatization issues related to
Industrial Companies;
• Increase institutional capacity in industrial sector and support for the
development of country ‘s private sector and social groups;
• Improve quality-control process in industry.
46
Subprograms to Support Industrial
Development
Infrastructure projects, for setting up Industrial plants, with the
construction of roads, sidewalks, sewerage systems, installation of
water, electricity, telecommunications and firefighting systems in the
Industrial development centers of:
• Viana
• Bom Jesus
• Lucala
• Fútila
• Catumbela
• Caála
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Subprograms to Support Industrial
Development (cont.)
Projects for the construction of industrial parks in some of the
industrial development centers planned for the country:
• Uíge
• Soyo
• Dondo
• Kunje
• Matala
Preparation of feasibility studies focusing on launching the basic
infrastructure needed to construct the Kassinga industrial
development hub.
Institutionalization and ongoing creation of infrastructure, with
the construction of sidewalks, sewerage systems, water, electricity,
telecommunications, and firefighting systems in the special economic
zone of Luanda - Bengo
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3. Mining Sector
49
• Independent mining activity has been limited to diamonds
and, on a smaller scale, to the extraction of marble and
granite.
• Angola has numerous mineral deposit, including:
▫ Diamonds; Iron;
▫ Gold; Phosphates;
▫ Manganese; Copper
▫ Lead; Zinc;
▫ Wolfram; Uranium
▫ Tungsten/Vanadium;
▫ Titanium; Chrome;
▫ Tin; Beryllium;
▫ Quartz; Gypsum
▫ Marble; Granite;
50
Public Private Partnership PPP are
allowed following the appropriated
legislation.
51
Thank you!
Invest in the future, Invest in Angola!
www.anip.co.ao
www.anip-angola-us.com
PowerPoint by: Maria Luísa Abrantes & Ana Karina Silva
Translation by: Lynn de Albuquerque