Loans to companies are guaranteed, Development Bank of Angola assures

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Banco de Desenvolvimento de Angola (BDA) will “simplify the process of analysis and lending to the domestic business sector” in the country. Walter Barros a member of the Board at BDA, announced that the bank has been working on “a process to enhance qualified human resources and strategies to deal with requests for funding”.

According to the same responsible, speaking at a lecture for students and exhibitors at the 5th edition of the International Benguela Fair (FIB), the drop in the international price of oil has had a reduced effect on the objectives of Angolan development bank since it  has a strong treasury.

The BDA benefits from 5% of all oil tax revenues. through the National Development Fund.  “What may happen is a reduction in tax revenue in general and, in this way, the reduction of inputs, but tis will not affect granting credit to customers, since the bank has share capital, its own resources and other credits that can be traded with foreign partners” Walter Barros added. “We have cash to fund projects not only this year but also to sustain the bank for as long as it exists,”

The BDA was created on 7 June 2006, as a financial instrument of the Angolan State, to support the sustainable development of the economy, boost economic diversification, promote new technologies and create more jobs. (Source: Jornal de Angola)

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Angola and Egypt lead foreign investment in Africa

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Angola and Egypt were the top destination for foreign direct investment in Africa last year. According to fDi Intelligence , a data division of the Financial Times group, these countries were the top destination for foreign direct investment in Africa “as companies investing in the region searched for good growth potential on the continent”.

“In sub-Saharan Africa, oil-rich Angola raked in $16 billion more investment in 2014 than it did in the precious year, mostly in its vibrant oil and gas sector”, data revealed.

“In 2014, Africa experienced substantial growth in inward investment, with $87 billion find its way in mostly oil and gas projects — which got $33 billion or about a third of the total investments. Real estate was the second-most popular sector, attracting $12b billion in investment, followed by communications at $6 billion.

Africa is the world’s fastest-growing region for foreign direct investment, according to fDi Intelligence, with capital investments growing by 65 percent in 2014, while the global average only added 1 percent.

Nigeria, Mozambique and Morocco also saw a big increase in capital investments and together accounted for 27.5 percent, or $24 billion, of the foreign investment to Africa in 2014″. (Source: AFK Insider)

CEO from Oi: Business relations with Isabel dos Santos “are improving and evolving”,

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Relations with businesswoman Isabel dos Santos, the largest shareholder of Unitel, “are improving and evolving”, declared the CEO of Brazilian telecommunications group Oi, Bayard Gontijo.

Gontijo also said that “We’re working with two scenarios. One is selling the asset, The other one is fixing those old disputes … in a structure where we have the shareholders’ agreement respected by both sides”. This outcome would include the African asset in Oi’s accounts and the unlocking of the process for payment of 246 million euros in dividends that have gone unpaid since 2011.

“We are changing the centre of gravity from Lisbon to Brasilia,” announced the CEO, adding that Brazil’s state development bank BNDES, a major shareholder and creditor of Oi, has strong relationships in Angola.

The stake in Unitel, and in other African assets, was inherited by Oi from Portugal Telecom SGPS, following a capital increase resulting from the merger of the businesses.

Unitel, which has the businesswoman Isabel dos Santos as one of its main shareholders, argues that it has the right of first refusal on the 25 percent that PT owns in Unitel in cases of sales or mergers (as was the case of Oi/PT SGPS ). (Source: Reuters, Macau Hub)

Standard Bank optimistic about Angola’s economy: “This could be a good time to invest”

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Standard Bank remains upbeat about Angola’s recovery from oil price fall and the Angolan government’s quick action and improved capital market access will help recovery from oil price decline, says Standard Bank, quoted by International press. Recent signs of price stability and quick government action to manage the situation are expected to encourage development opportunities in the future.

“The government is reducing investment plans for this year and there is some reduction in terms of government spending. This is affecting the whole country in terms of economic activity,” says Luis Teles, executive head of corporate and investment banking, Standard Bank Angola, quoted by business online media How We Made It In Africa.

One of the solutions to bringing about stability to the market is coming from the government and banks themselves, which are acting quickly to find new avenues of funding. The government is already working with major banks like Standard Bank to ensure enough dollars can be provided to help specific industries, like the food and oil industries.

“We have been in discussions with the government and the central bank to come up with answers. We are certainly seeing the government moving quickly to counter the negative effects of the drop in the oil price. The government is pushing hard to diversify the economy and is coordinating with the Central Bank to find new ways to incentivise banks to lend more to the real economy,” says Teles.

Standard Bank hopes that by using its experience and track record in the country and working with authorities to help improve access to capital by introducing new products, that it will allow clients to cover their shortfalls.

“There is no derivative exchange for example, and we are busy with discussions to improve access to capital and create more liquidity,” says Teles.

Other important facilitation roles being played include: pushing for more local content development and production by advising local investors at a strategic level, raising financing for production facilities, advising on mergers and acquisitions, the provision of financing for joint venture structures, trade and receivables finance down the value chain and bridge facilities for equity investors.

Teles says significant development opportunities exist, including in the downstream sector but it is all about balancing timing.

“This could be a good time to invest. The country is keen to attract foreign direct investment and is making it easier and faster to come in. Investors can then take time to find a local partner and invest in their structures without feeling pressure to be profitable immediately. Of course, when the oil price increases, the growth potential will arise quickly again,” said Mr Teles. (Source: How We Made It In Africa)

Executive Secretary for ICGLR praises president Dos Santos efforts in the Great Lakes region

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The Executive Secretary of the International Conference on the Great Lakes Region (ICGLR), Alphonse Tumba Luaba (photo), praised in Luanda the efforts of the Angolan president, José Eduardo dos Santos, in his capacity as acting chairman of the African regional body, Angop news agency reports.

The official highlighted the contribution of the Angolan statesman to peace and support for the Central African Republic (CAR) and other States in the Great Lakes Region. The statement was made during a meeting gathering the chiefs of Staffs of the Armed Forces and the heads of Information Services of ICGLR.

President, José Eduardo dos Santos is in his second year in the presidency of the ICGLR, whose term began in January 2014.

According to Angop: “Tumba Luaba also spoke of the serious security and humanitarian situation prevailing in some of the ICGLR member countries, calling on international community to join efforts in order to tackle the crisis.

Issues related to the outcome of the peacekeeping mission in the Central African Republic and the member states of the Economic Community of the Central African States (ECCAS) as well as the threat of terrorism in the Great Lakes region”, were also part of the meeting agenda.

The ICGLR is an inter-governmental organization of the countries in the African Great Lakes Region. Its establishment was based on the recognition that political instability and conflicts in these countries have a considerable regional dimension and thus require a concerted effort in order to promote sustainable peace and development. Most notable among the conflicts that have had cross-border impacts or origins are the 1994 Rwandan genocide that led to the loss of more than 800,000 lives, and the political instability in DRC. These conflicts constituted a major threat to international peace and security.

The organization is composed of twelve member states, namely: Angola, Burundi, Central African Republic, Republic of Congo, Democratic Republic of Congo, Kenya, Uganda, Rwanda, Republic of South Sudan, Sudan, Tanzania and Zambia. (Source and photo: Angop)

Benguela International Fair gathers thousands in its fifth edition

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The most important business gathering in the South of Angola is on until May 17th. The fifth edition of the Benguela International Fair (FIB) takes place at the Ombaka National Stadium, in Benguela. “With a strong multi-sector component, the International Exhibition of Benguela seeks to give way to the presence and promotion of several sectors, counting with the annual participation of companies from different business areas”, according to the organization.

Conferences, debates and workshops, as well as the organization of a Cultural Festival, are included in the program. Thousands of people are expected visit Ombaka National Stadium and its around 300 exhibitors .

FIB’s intention is to help strenghten the economic and industrial potential of the South Region of Angola, as well as to attract national and international investment and support the development of the region. Benguela presetnts itself as “the 2nd largest development platform in Angola”.

“With privileged accesses to other provinces and countries, stemming from the growing development in terms of communications and connections – Lobito Corridor – from the development of the railway and the Lobito’s Port expansion, reconstruction of the main road networks, creation of the Catumbela International Airport, among others, Benguela is the gateway to a growing number of consumers located in the provinces of Benguela”, declare the promotors of FIB.

Angola ends subsidies on gasoline to reduce inequality

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Angola will end subsidies on gasoline and increase the price of other fuels from Sept. 30 to ease the burden on the Treasury and release more funds for public spending, according to a statement by the Angolan finance ministry.

Petrol subsidies will end and the price of other fuels will increase. Angola imports most of its fuel due to insufficient refining capacity and it spent around 4 percent of its 2013 budget on fuel subsidies, according to Control Risks.

“Gasoline now joins the free price system, ending the burden on the state of the cost of subsidies,” a ministry statement seen by Reuters said, adding that the changes come into effect on September 30.

“The ongoing effort to adopt realistic prices will help strengthen social programmes and reduce inequality, since subsidies benefit the most favoured groups and encourage fuel smuggling to neighbouring countries.”, it added.

Angola has been gradually increasing fuel prices in recent months and has saved 110 billion kwanza ($1 billion) from reduced subsidies since October last year, the statement said.

The International Monetary Fund, which entered a $1.4 billion loan deal with Angola in 2009, has urged the southern African country to reduce fuel subsidies to free spending for infrastructure and encourage the building of refineries.

Boston Consulting Group: “Angola has potential to boost annual growth into the double digits”


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I would like to share here the article written by Alexandre Gorito partner and managing director in the Luanda office of The Boston Consulting Group and published by the World Economic Forum site:

“The framework of a two-speed economy is becoming antiquated in a world of accelerating change and increasing complexity. But thinking in terms of a multispeed economy is not especially helpful, either. Instead, it is better to view the economy as a mosaic, with hot spots of opportunity and cool spots of slow growth. This commentary is part of our From Emerging to Diverging Markets series, which tracks hot spots and the changes under way in the world’s rapidly developing economies.

Recent volatility in commodity prices could spell big trouble for many nations in sub-Saharan Africa, a region not known for sound economic management of its wealth of natural resources.

Angola is also likely to suffer from the drop in oil prices. But in the longer term, it will continue to benefit from its big progress over the past decade. In recent years, the oil-rich nation of 24 million has been moving aggressively to put its economy on a more sustainable footing. Not only is its government investing a major share of its oil wealth in new industries and infrastructure; it is also investing in its own people, with increased spending on education and health care.

Thanks to more than a decade of political stability and steady economic growth, the percentage of Angolans living below the poverty line dropped from 65 to 36 between 2002 and 2009. The number of children enrolled in primary school tripled, mortality rates for children under the age of five dropped, and life expectancy rose by five years over roughly the same period. In fact, Angola has achieved greater progress in improving the social and economic well-being of its population in the recent past than any other nation aside from Brazil, according to The Boston Consulting Group’s Sustainable Economic Development Assessment. (See Strategies for Improving Well-Being in Sub-Saharan Africa: The New Prosperity, BCG Focus, May 2013.)

Before the collapse in oil prices, Angola’s economy was expected to grow by 9.7 percent in 2015, according to government budget forecasts. That level may be difficult to reach if global oil prices remain at around $50 a barrel or less. Oil accounts for about 30 percent of GDP, 36 percent of government revenues, and 95 percent of exports, according to the Angolan government.

But the government is taking a number of measures to encourage other industries that should start bearing fruit over the next five years. And the gains in living standards are likely to translate into a larger consumer class and a better-educated, more able-bodied workforce that should provide new pillars for economic growth over the medium and long terms.

This doesn’t mean that Angola is not a very challenging place to do business. Luanda is the most expensive city in the world, according to one cost-of-living ranking. While it still has immense potential for further development of its natural resources, Angola hasn’t even begun to explore natural gas, for example, and its agricultural sector has yet to recover from civil war. The country ranks low in terms of ease of doing business. Infrastructure remains poorly developed in the interior. Poverty and unemployment remain high. Government bureaucracy is bloated, and many public services function poorly.

But Angola’s government is committed to structural reforms. It has reduced fuel subsidies and created a stock exchange; fiscal and bureaucratic reforms are under way. And the country’s economic progress is impressive when one considers the context. Thirty years of civil war, which ended only in 2002, left several generations of Angolans in extreme poverty, with little education, and in poor health. Since then, government agencies have had to devote most of their resources and energy to fighting famine and disease and rebuilding roads and health clinics.

Angola has a lot of work to do to build an economy that can continue to thrive despite volatile swings in global commodity prices. But it has stabilized the economy, is moving in the right direction, and has its priorities in the right places. If Angola can execute its plans and mobilize its resources efficiently, the economy has the potential to boost annual growth into the double digits”.

Kizomba Satellites: Sonangol and Esso announce beginning of production

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Angolan state oil company Sonangol and Esso Exploration Angola have jointly announced the beginning of production in the Kizomba Satellites – Phase 2 project (Kakocha , Bavuka and Mondo Sul fields) in the deep waters of Block 15 in the Angolan sea,

Production is expected to reach a total around 190 million barrels of oil per day once the Bavuka and Kakocha fields go into operation and production, according to the information provided. Mondo Sul, Bavuka and Kakocha are located at a water depth between 750 and 1,100 metres.

The manufacture of almost all deck modules and subsea equipment on construction sites located in Soyo, Dande, Luanda and Lobito were a result of a high level in Angolan participation

Esso Exploration Angola (Block 15) Limited is the operator of the concession of Block 15 with a 40 percent stake, and its partners are BP Exploration (Angola) Limited (26.67 percent), ENI Angola Exploration BV (20 percent) and Statoil Angola Block 15 AS (13.33 percent), whilst Sonangol is the concessionaire. (Source: MacauHub, Angop)