AFRICANGLOBE – Anna Rosenberg, a senior analyst for Africa at Frontier Strategy Group, is currently on a research trip to South Africa and Angola, meeting international and local companies. Here she discusses Angola’s business environment.
Having spent here now a couple of days meeting with a variety of stakeholders and seeing Angola’s capital, my first impression has given room to a more nuanced picture.
Most people I have so far spoken to confirm that Angola is an extremely difficult place to do business. Laws and regulations change constantly, it is very bureaucratic, the country has a major talent gap, and corruption (fondly called ‘gazoza’ by the locals) is publicly accepted and openly discussed.
It is incredibly expensive and challenges abound. One executive I met, a veteran of setting up factories in difficult markets, summarised this fittingly: “Nigeria is junior school, while Angola is university.”
However, what strikes me more than all the challenges I have heard about is the opportunity that one can literally find on every corner of the street. Yesterday, I visited the national registry of companies, a place bustling with activity. It registers 30 local and international companies on an average day and a total of 4,000 in the first four months of this year!
The roads are filled with large 4x4s, mainly Hyundai, Toyota, Mitsubishi, Mahindra, some Chevrolets and to a lesser extent Land Rovers and BMWs – the latter being driven vastly by government representatives. Portuguese brands and companies are dominant, building on long established trade routes and cultural proximity.
Modern retail outlets are primarily Portuguese, with the exception of South African Shoprite. A one-bedroom apartment in downtown Luanda costs between 5,000- 10,000 dollars a month and you have to pay one year rent in advance. Meanwhile, a Hugo Boss and Nike shop caters to Luanda’s affluent consumer class.
But it is not only the rich. Despite its many faults and flaws, the government is actively pursuing a policy that will see wealth trickle down in the next few years. Initiatives have been rolled out to allow the informal economy be included into the formal sector. Companies doing business here are obliged to commit resources for training local Angolans.
An array of protectionist measures are being put in place to protect those that want to produce locally and add value to the country. The government’s motivations are, of course, ambivalent. A country born in times of the cold war as a communist regime (a fact today largely downplayed by Angolans) has embraced capitalism. But the ideology of today’s government is difficult to grasp and requires some further studies.
Despite the country’s incredible development in the last ten years Anglo-Saxon multinationals are not yet widely present here. And if they don’t move quickly, they will miss out on all the opportunities that still exist in pretty much every sector.
By: Anna Rosenberg