SECTORS

The Republic of Angola faces a difficult and challenging economic and financial situation as a result of having an economy heavily reliant on the export of a single product, oil, whose price the country does not control and which suffered a steep decline the last two years on the international market.

On the other hand, the Angolan economy continues to depend on the importation of equipment and final and intermediate consumer goods, which adds great pressure on the balance of payments, much weakened by the fall in its export earnings.

Despite the adverse economic and financial situation, the insurance and pension funds sector continues to grow strongly, reflecting the confidence private investors have in the potential of the Angolan economy and financial system.

In fact, the insurance and pension funds sector currently has 25 insurance operating companies, one state owned, and 24 by private investors; and 33 pension funds, managed by three insurance companies, and five by pension fund managers.

The assets invested in 2016 by the insurance companies were over USD $ 500 million, where as the assets invested by the pension funds amounted to approximately USD $ 640 million.

Despite its strong growth, the insurance sector still has a lot of room to grow, as the insurance penetration rate, calculated by the volume of premiums on GDP, is lower than the average penetration rate in Africa, around 3%.

In order to reach, and eventually surpass the average penetration of insurance rate in Africa, it is imperative that the Angolan economy resume the robust growth of the recent years This implies higher corporate and household incomes and, con- sequently, higher insurance premiums, whether in the life or non-life branches.

On the other hand, campaigns to clarify the economic and social importance of insurance and pension funds must continue They alert society to the need to protect the properties and personal assets of families and companies, subject to risks ever more sophisticated.

Finally, the process of modernizing the insurance and pension funds regulatory framework must be pursued, incorporating the international principles advocated by IAIS (the International Association of Insurance Supervisors) and IOPS (the International Organization of Pension Supervisors).

The ongoing actions in the insurance and pension funds sector, which include the creation of the national reinsurer, ANGO RE, the institutionalization of agricultural insurance and high competition sports insurance, aim to make the sector sustainable On the other hand, strengthening prudential and behavioral supervision focuses on making the sector competent and competitive The steps that the regulator of the sector, ARSEG – Angolan Agency for Regulation and Supervision of Insurance has taken to comply with the guideline of the FATF – International Financial Action Task Force on Money Laundering, should be noted.

The pension funds insurance sector in Angola offers excellent investment opportunities for all private investors, who desire to contribute with their capital, know- how and technology, to the modernization of the Angolan financial system, an essential tool for the growth of the economy.


Aguinaldo Jaime – Chairman of the Board of Directors of the Angolan Agency for Regulation and Supervision of Insurance (ARSEG).
From Investment Guide www.mintrans.gov.ao

A VIBRANT BUSINESS WITH HUGE GROWTH POTENCIAL

Angola is a country of challenges, a giant market and a rapidly developing society, in need of entrepreneurship in various sectors with a spirit of dedication, strategic vision and investment.

On the path of the diversification of the national economy, there is a sector that has long invested and created a solid structure to go beyond borders: the Industrial Beverage sector The beverage sector continues to this day to be one of the most advanced in Angola in terms of business network and production capacity Leading companies have a nationwide presence and distribution capability They operate under strict international quality standards.

This sector contributes actively to the country’s social and economic development, with a considerable impact on the national market, with 40 beverage manufaturers operating in the beer, soft drink (carbonated), juices and nectars (uncar- bonated), table water, wine and spirits markets.

JOB CREATION

The sector employs about 13,600 people, and it is estimated that it manages some 42,000 indirect jobs The development of adjacent sectors led to the reduc- tion of foreign exchange consumption and an even balance of trade The utilization of the installed capacity of the industry ensures not only the satisfaction of national demand, but also contributes to the improvement of export performance, which in 2017 reached 0 6 million liters, entailing the creation of local skills and improvement of living conditions for the population.

The Angolan beverage industry contributes 4% to the Gross Domestic Product (GDP), according to the National Institute of Statistics (INE) Before the independence, the share of this sector reached 20%.In countries where industrialization functions as a support for economic diversification processes, their relative weight is 25%, a target value that the Association of Beverage Industries of Angola (AIBA) wants to achieve in the short and medium term, considering that installed capacity is about 70% higher than the total consumption.

The national beverage industry is in a position to become the second engine of the Angolan economy, following the oil sector The development goes through, among other steps, local production of raw materials and subsidiaries, since there is a whole scope of combinations and specifications that most people cannot imagine: sugar production, grits (corn), fruit pulp, pallets, cans, preforms of PET bottle; caps, corks, labels, boxes of cartons; the inks for the labels and cans, among other things.

The needs of the market, currently three billion liters per year, with an installed capacity of 4,580 million liters per year, fulfilling the domestic market and exports, become a source of national income, with a tendency to increase, the result of maintaining a strategic vision for the sector, with exports in sight In the beverage sector, Angola satisfies the national market and has the capacity to export It is a matter of national pride.

The Angolan market is a demanding market, mature and above all a reflection of modern Angola The sector expects investors, national or foreign, to look at this economy and analyze its numbers and especially its needs, and invest in it because it is worth it The economy needs committed investors, and those who invest will surely have returns Investors who win are synonymous with higher tax revenues The more jobs, the stronger and healthier the economy Everyone wins: the country, the entrepreneurs, but above all the consumers.

The competition for attracting foreign investment within the SADC further justifies the effort The countries of the region that do not meet satisfactory conditions for industrial location may end up marginalized Angola is very well positioned at various levels to be not only an export hub within the SADC, but also with right conditions to export to Europe, the result of privileged channels – political and cultural ties as for example with Portugal.

Regarding the raw material, the sector envisions a phased national production “cluster,” in order to reduce its dependence on foreign markets Regarding cus- toms duty, far from protectionism, AIBA only seeks to value what is good for the country, without facilitating the importation that places products at the same level as those of national values The improvement in the image of the packaging industry, the increase in communication with the consumer, and the technological development in terms of waste treatment are some of the opportunities yet to be explored.

In Angola, the potential of the circular economy in the packaging and beverage sectors, exposing some of the main opportunities and challenges in the beverage production sector, makes the development of the nutrient market one of the main opportunities, and this despite some challenges, namely demographic dispersion.


Manuel Victoriano Sumbula President of the Association of Beverage Industries of Angola (AIBA)
From Investment Guide
Angola is one of the countries with the greatest potential for development on the African continent, including the development of a modern and competitive agriculture, favored by its climate conditions, soil, water and biological resources, geographical location and sources of electricity, associated with tradition, and the ability of its populations to adapt to a market-oriented agriculture, among others A vast number of constraints, however, still prevents this potential from blossoming.

Before the post independence armed conflict (1975), the country was self-sufficient in most foods except wheat, but still was a major exporter of coffee and corn, as well as bananas, sugar, palm oil, beans and cassava The 27 year civil war, which forced a part of the rural population to urban areas interrupted its agricultural production The poor state of the roads, the dismantlement of rural commerce, and the threat of the mines lessened the importance of agriculture in the country’s economy, which instead favored until the mid-1970s an agricul- ture increasingly market-oriented Near subsistence made the country heavily dependent on imports and the oil sector.

Angola benefits from a rich and diverse natural heritage, with agro-ecological regions ranging from the Maiombe forest (the most important forest in the world, shared with neighboring countries, after the Amazon) in the northern part, to the Namibe (a part of the Kalahari of Namibia) to the south,passing through other forest formations and savannas, with plateaus and coastal zones, and water resources that place Angola in a privileged position in the African continent, particularly from the hydroelectric potential standpoint; and climate and soil conditions that provide, assuming corrective measures are implemented, a high and varied potential of animal farming production.

With a potential agricultural area of some 58 million hectares, according to the FAO, of which more than 10% is covered by forest, the country currently uses just over five million hectares for agriculture The seven main food crops occupy more than 95% of this area: corn (37%), cassava (24%), beans (17%), peanuts (7%), sorghum (4%) and potato (2 5%) Coffee, fundamentally Robust but also Arabica (the country became the third largest producer in the world), represents only 6% of this area. With about 73% of the area of the territory above 1000 meters, Angola has not only good conditions for rice, soybean, cotton, sugar cane, sunflower, palmar, and tropical fruits, but also in subtropical and temperate zones for olive trees, grapes, strawberries, apples, and pears among others Likewise, the potential of livestock production is diverse, with an emphasis on beef and dairy cattle, goats, sheep and poultry.

The area under cultivation is spread among family farms (more than 95%) and business type holdings farms The former have a predominant part in the agricultural production: more than 95% of roots and tubers, legumes, oilseeds and fruits; 74% of cereals and 41% of vegetables Yet, this dualistic view is not static It is believed that in the medium term a sort of “middle class” still in training farmers will bring another momentum to Angolan agriculture.

Though for the African continent, the production of main crops remains low in medium terms, it can constitute an excellent opportunity for private investment within a certain perspective, mainly the provision of extension services and technical assistance, and seeds and quality vegetative material, fertilizers and phytosanitary products and vaccines.

The war markedly affected livestock production, and herds once almost decimated are currently undergoing an expansion.

Angola is currently self-sufficient in cassava, sweet potatoes, sorghum, bananas and goatmeat In all other important food groups, the country is deficient and has to import three million dollars of food per year.

Access to land has limited investment in agriculture The current political and economic environment in Angola suggests a greater availability of land for agricultural purposes with the goal to attract investment in order to increase the production of commodities from agrolivestock origins.

In short, the points below underscore the strengths of the agricultural activity of the country and the opportunities that it offers:

• Abundance of agricultural land;

• The potential of a family agriculture must be progressively linked to the market and should be framed as an important component of agrobusiness;

• Emergence of a private business sector with a mindset open to technological innovations;

• Abundance of water resources, allowing an estimated irrigable area of about three million hectares with reasonable costs, approved by the national irrigation plan (PLANIRRIGA);

• Presence of young workforce;

• Significant increase in middle and higher level agrarian schools in the last 15 years;

• Potential increase in domestic demand for agricultural products;

• Political stability and social cohesion;

• Regional integration of Angola in SADC;

• Neighboring countries as potential markets;

• Openness to foreign investment and progressive improvement of the business environment;

• Presence of key players in international agricultural finance, such as the World Bank, the European Union, the African Development Bank, the International Agrarian Development Fund, with a current financing project portfolio of about US $ 300 million;

• Recent rehabilitation of transport infrastructures (roads and railways);

Whatever the constraints, however, they must be perceived as business opportunities:

• Weak knowledge of the most productive agricultural techniques;
• Poor level of institutional development and human capital;
• Poor training and under-utilization of technical staff;
• Reduced marketing capacity and production outflow;
• Scarce financial means for the effective exploitation of resources;
• Weak planning and management ability of agricultural entrepreneurs;
• Poor service supply of factors of production;
• Lack of credible statistical information;
• Technical assistance and scientific research;
• Low productivity of land and labor

Angolan agriculture is experiencing a difficult time, but it is also like a blank slate where everything can be written, namely, much can be done, including the transformation of various limitations into business opportunities.

www.minagrif.gov.ao
Fernando Pacheco - Agronomist and Independent Consultant
From Investment Guide


A LAND OF OPPORTUNITIES

Angola is a country with a total area of about 1,246,700 km, with 1,600 km of coastline Its beautiful beaches, imposing plateaus, diverse culture, abundant fauna and flora, vast rivers, and hospitable people offer business opportunities in tourism.

With the end of the armed conflict, which lasted 27 years and left most of the existing infrastructures destroyed, the country initiated its reconstruction process. Angola offers many opportunities, thanks to its territorial and coastal dimension, climatic diversity, scenery, and biodiversity It remains still undiscovered by the international community for having been closed to the world for decades.

The tourism development strategy in Angola is based on priorities, regions and poles of tourism development The training of the sector focuses on the integrated and phased development of six strategic axes, namely: issuing markets, accessibility, supply enrichment, services and skills, promotion and distribution, and urban and environmental quality.

The great impetus to the post-war tourism sector began in 2010 with the ANC (African Nations Cup) in Angola, resulting in the improvement of tourism The process of national reconstruction brought visitors to the country, mainly for family and business reasons, and tourism experienced a gradual growth.

Tourism presents itself as a privileged sector for the reduction of poverty and increased growth of the country, with a view to achieving the goals for the millennium, while considering its cross cutting nature and impact on all sectors of the economy The sector helps to contain the rural exodus It is decisive in the social inclusion and development It reinforces the citizenship, the national identity and the image of the country.

Angola has been experiencing an economic and financial crisis since 2014, as a consequence of the drop of the price of oil in the international market The crisis has awakened government, political and business leaders to the need to diversify the economy through other potential resources such as tourism.

In view of the burden driven by the international market and the need to guarantee the economic development of Angola, the tourism industry was one of the sectors selected for the diversification of the economy, as the result of the potential of the country and the continuous growth of the world tourism industry.

On the international scene, Angola is positioned as the second oil producing country in sub-Saharan Africa The economy depended primarily on oil tax revenues But the country has other potential assets: arable land for agriculture, water resources in abundance, fauna and flora diversity, mineral resources, and more The tourism industry and other prospects can help boost the national economy and consequently raise more revenues contributing to the GDP.

The concept of tourism has evolved over time The model of mass tourism that has been in force since the 1950s, based on the three S (Sun, Sea, Sandy) is outdated and unsustainable Nowadays, the new model is based on the three L, (Landscape, Leisure, Learning), which implies a significant shift in the behavior of tourists and in tourism strategies Tourism started to be more related to nature, adventure, novelty and creativity This entire process contributes to the emergence of a new profile of tourists, with greater sensitivity to local cultures, the environment, the search for unique experiences and self-fulfillment, and health and well being, resulting from people’s lifestyle changes.

Angola is betting on the sustainability of tourism, which includes the preservation of nature, fauna, flora, protection of cultural identity, and other natural resources, because there is still time to avoid the mistakes other countries made when the economic factor overlapped all others, leading to a deterioration of its resources, the result of short and medium term strategies The country has a strong cultural heritage, historical and natural reserve, welcoming people, a diverse flora and fauna, a privileged location, a vast territory and coast, all of which are assets to boost the development of tourism in the medium and long term Hence, the need to qualify the tourist offer with increasing quality and diversity, making it more competitive.

Angola has been making efforts to create a normative framework adequate to the development of the tourism sector, today considered of great economic importance however, despite this worthy effort, areas where regulation is deemed necessary still remain Otherwise, the objectives of the National Tourism Plan and the great options that the Angolan Government have defined will be called into question.

Angola has the capacity to become a new tourist destination in the 21st century, but to do so it must invest heavily in overcoming the supply gap at various levels (labor, legal framework, inventory and characterization of tourist assets, efficient means of work and creation of an integrated vision of tourism), since it has potential for its development.

When in 2018 the government eased the process of granting tourist visas, since tourism is mobility, one of the biggest constraints that the sector confronted was eliminated.


Sónia Maria Nunes Cunha Hotel Manager Operations Director, AKI, Hotels & Resorts
www.mintur.gov.ao From Investment Guide




INTRODUCTION

The process of reforming the electricity sector began in 1996 with the entry into force of a benchmark: Law 14-A/96, of 31 of May It establishes a set of general principles aimed at promoting competition in the generation and distribution markets, promoting private investment, and encouraging the supply and efficient use of electrical energy.

The Electricity Supply Industry (ESI) in Angola is one the most critical areas for the country’s economic development It has 18 2 GW hydropower potential and three main isolated transmission networks, which need to be fully integrated to eliminate the existing power supply asymmetries

The major power plants in Angola are as follows: • Northern System: Cambambe (960MW), Capanda (520MW) and Laúca (still in progress, to be 2,060MW) – all hydropower; • Central System: Lomaúm (50MW), Biópio (18MW) and Gove (60MW) – all hydro; Kileva (60MW), Cavaco (20MW) and Biópio (18MW) – all thermal; • Southern System: Matala (60MW), Chitoto-Namibe (20MW) and Lubango (80MW) – all hydro; • Isolated plants: Cabinda (70MW) and the East (20MW).

BACKGROUND AND MOTIVATION
The ESI is currently faced with a variety of challenges:

• The generalized deficiency of the electrical infrastructure aggravated by the financial weakness of the public power utilities;
• The sector has a general reactive approach, responding to the numerous immediate challenges, with a reduced human resources capacity to implement the medium and long-term strategies to support its own development;
• Poor reliability and quality of services;
• Tariffs that do not reflect costs, which are compounded by billing and collection of inadequate revenues, as well as generally unsatisfactory business operations;
• Reduced capability to expand the electricity network in rural areas

In addition to these constraints, there are other challenges for which adequate and effective responses must be identified and implemented:
• Operational challenges, as a result of an increasing complexity of the network with the entry into service of the new 400kV transmission lines and new electricity generation facilities of large dimension;
• The need to radically change the financial weakness of the sector, not only by adjusting tariffs, but, above all, by introducing a new model of commercial operation that ensures its sustainability as a whole;
• Rational use of the workforce and existing skills;
• The promotion of private investment to complement the huge public investment programme in the electricity sector.

VISION

• The plan to develop Angola’s power systems is very ambitious Over the next seven years the hydroelectric power will represent over 70% of the electricity generated in wet periods dropping down to 48% over the dry years Thus, natural gas together with new and renewable sources of energy will be required to fill up the gap. • The largest and highest impact investments will continue to be in hydropower plants, taking into account water flow regularization, the creation of more biomass plants and the improvement of electricity distribution all over the country Midterm plans include the interconnection with the SADC west network.
• To enable the power sector to achieve its goals, Angola will need around US$ 23 billion, in public and private investments by 2025.

THE CURRENT BUSINESS MODEL

The ongoing electricity sector reform process highlights the importance of significantly improving the performance of the Electricity Supply Industry and the consequent need to modernize and restructure its business organization.

The ESI in Angola is currently structured by means of Generation (quasistate monopoly), represented by PRODEL (the main company in the sector); Transmission Lines (state monopoly), represented by RNT; and Distribution Network and Commercialization by ENDE (state monopoly), as its main areas of activity.

The current power generation public company can operate power plants of any type and still participate as a strategic partner in new production ventures with the involvement of the private sector.

INVESTMENT OPPORTUNITIES

Public sector investments will be reserved to large hydropower developments, the national transmission grid, as well as distribution in areas covered by the national public utility (ENDE) and all rural electrification endeavours The remaining investments shall be undertaken by the private sector, enabling the mobilization of capital and know how As a result, private sector finance will progressively replace public investment in all areas of the ESI.

Immediate opportunities for private investment include, but are not limited to:

• Tômbwa Windpower Development (100MW) – looking for “Build Operate Transfer” (BOT) financing;

• Cacombo Hydropower Development – important to regularize the Catumbela River;

• Construction of seven selected mini Hydropower Stations;

• Keve Hydropower Development Studies;

• A 100% private 500MW Hydrothermal Production The aim is to implement five biomass and six mini-hydroelectric developments in Benguela and Huambo;

• A 1,200MW power intensive industry project for aluminium production in the southern coast of the country;

• A 12MW Hydropower development to improve power supply in the eastern provinces as well as to Catoca Diamond Project.

CONCLUSIONS

The ESI business model creates opportunities for the private sector and will:

• Accelerate the process of electrification countrywide, which will contribute to economic growth and poverty eradication;

• Ensure a medium and long-term sustainable ESI that promotes and contributes to sustainable development;

• Improve the quality of power supply and services;

• Strengthen the electricity sector and its commercial entities;

• Reduce poor economic and financial performance and ensure the resources for investment in rehabilitation and expansion of the sector at the lowest possible cost;

• Reduce inefficiencies and technical constraints and as a major priority;

• Implement a trustworthy and indefectible Human Resources Development Programme for the sector;

•Another major constrain is the Angolan tariff structure, which has been largely subsidized by the Government These subventions will gradually be phased out, enabling the power utilities to be self-sustainable and more capable of providing a better quality of service.


Felix Vieira Lopes Master of Sciences in Electrical Power Engineering and Management; and Master of Policy Studies; Energy and Water Affairs Minister’s Adviser for Atomic Energy Subjects and National Liaison Officer (NLO) of Angola to the International Atomic Energy Agency
www.minea.gov.ao From Investment Guide

STATISTICAL DATA FOR 2017 AND FIRST HALF OF 2018

The statistical data tables for 2017 show that the Sector carried a total of 183,372,000 passengers and 11,339,000 loads.

During the first half of 2018, a total of 86,103,000 passengers were transported, as against 88,736,000 in the first half of 2017, with a negative variation of around 3%, because of a significant drop in maritime transport of passengers.

In relation to freight, a total of 5,083,273 loads were transported in 2018, compared to 5,659,965 transported in 2017, registering a negative variation in the order of 10%, also because of a marked drop in the transportation of maritime cargo.

The tables below illustrate the transportation of Passengers and Freight in 2017 and the first semester of 2018.

Passengers Transported by Mode (thousands)

MODE2017
Road176,580
Railway3,073
Maritime152
Air3,567
Total183,372


Cargo Transported by Mode UM (thousands of Tons)

MODE2017
Road377
Railway192
Maritime10,717
Air53
Total11,339


Passengers Transported by Mode (thousands)

MODEFIRST SEMESTER / 2017
Road85,390
Railway1.572
Maritime78
Air1.696
Total88,736


Cargo Transported by Mode (thousands of Tons)

MODEFIRST SEMESTER / 2017
Road167
Railway35
Maritime5.434
Air23
Total5,659


Passengers Transported by Mode (thousands)

MODEFIRST SEMESTER / 2018
Road82,507
Railway1,769
Maritime67
Air1,761
Total86,103
Cargo Transported by Mode (thousands of Tons)
MODEFIRST SEMESTER / 2018
Road167
Railway178
Maritime4,714
Air24
Total5,083


The formulation, conduct, execution and control of the Executive’s policy in the field of transport is the responsibility of the Ministry of Transport.

In Angola, the transport sector comprises four main subsectors, namely road, rail, sea and port, and air. However, the transport domain also encompasses the National Network of Logistics Platforms, as part of the national strategic plan for accessibility, mobility and transport, an essential factor for economic, social and territorial cohesion in the country.

One of the main objectives is to provide the country with an integrated transport network that is adequate to national and regional development objectives, facilitating the process of economic growth and enhancing territorial and population policies.

With the appointment of the new Transport Minister, on June 20, 2018, the Transport Sector faces significant new challenges, in accordance with the guidance of His Excellency the President of the Republic, João Manuel Gonçalves Lourenço, in order to find “bolder solutions” for urban and inter-urban public transport, especially in the big cities, highlighting Luanda, the capital of Angola, with close to seven million inhabitants.

Our challenge must respond to the growing demand for population growth. We are imbued with a spirit of mission and a sense of the “great challenges presented by the strategic sector and the economy and national non pas development”.

Urban transport should be considered as a priority to improve the quality of life of the population in Luanda. The true integration (intermodality) between modes of transport will guarantee the increase of accessibility levels in the city and guarantee better mobility conditions for citizens.

The continuous investment in infrastructures ensures the strategic and competitive positioning of Angola in the regional and international context, which is open to the establishment of public-private partnerships with large companies and to the support of transport activity.

Increasing the volume of investments in the transport sector in Angola will enhance the creation of employment for Angolan citizens, generating more wealth and, above all, more national income.

We emphasize that the opening of the transport sector to public or private entities, national and foreign entrepreneurs who want to invest in the sector with rigor, responsibility, discipline and transparency, help us promote an efficient operation, so that we can jointly stimulate the growth of the agrobusiness, industry, commerce and tourism sectors, enabling greater regional, national and international integration.

There are therefore many investment opportunities available to US entrepreneurs, which may be used to promote and launch the structural projects of the transport sector oriented toward the domestic and regional market.

In the maritime and port subsector, the aim is to develop infrastructures capable of providing protection and safety for the maritime environment, to develop maritime hydrography and signaling, to promote the replacement of international flag shipping, and to improve maritime safety and navigation.

In the railway sector, the aim is to alter the vertically integrated Angolan Railways’ institutional model of railway infrastructures, equipment, maintenance and provision of passengers and freight services to a more disaggregated and specialized framework, allowing the inclusion of the private sector in the value chain, with the aim of ensuring quicker, more secure conveyance on this vital means of transport.

The aviation subsector, with the completion of the New Luanda International Airport (NAIL), will be the major milestone and epicenter of the entire civil aviation modernization strategy in Angola, reinforcing the operational capacity of TAAG (Angolan airline), with the renewal of its fleet, the effective restructuring of ENANA (national airport company), ensured by competent supervision and in line with industry best practice by the National Civil Aviation Authority (INAVIC), promoting effective competition conditions and flight freedoms in the aviation sector and increasing mobility and operational safety in civil aviation in Angola and throughout the world.

The no less important challenges of the road subsector are to establish and implement a program to reorganize Angola’s transport system, particularly in the provincial capitals of the country, with a major impact on the province of Luanda. Ensuring a regulatory framework for the licensing and planning of public urban transport, whether road or light rail, which responds effectively to the growth challenges of our large cities is the goal.

The road sector cannot exclude the implementation in Angola of the procedures, rules and principles established by the COMESA-EAC-SADC Tri-Party Facility for Transport and Transit Facilitation (Common Market for Eastern and Southern Africa – Commonwealth of Africa Eastern – Southern African Development Community). The objective is to ensure that the rules of transit and cross-border movement applicable in Angola match those of the countries forming part of these three regional economic communities.

www.mintrans.gov.ao
Ricardo Viegas de Abreu - Minister of Transport
From Investment Guide




CHARACTERIZATION OF THE SECTOR
In Angola, the Institute of Industrial Development of Angola (IDIA)is responsible for “the promotion of industrial activity and support of the development and the consolidation of industrial projects". The country has an enormous potential to locally produce more than it imports. For example, in 2015, out of ten most imported products, seven were from the food business. In 2016, there were already eight.

This fact gives the manufacturing industry an enormous growth potential, whether it is for the number of jobs that can be created, or its contribution to the process of import substitution and export diversification. Hence, the manufacturing industry presents itself as a strategic sector for Angola.

Nowadays the sector is led, in terms of importance, by the beverage industry with 60%, followed by the food industry with 20%, non-metallic minerals with 10%, metallic minerals with 5% and the chemical industry with 5%. Angola is already, by and large, self-sufficient in the beverage industry (e.g., beer and water) and Portland cement. However, the manufacturing industry’s growth has been well below its potential. Between 2003 and 2016 it only grew 5%. In other words, it went from 4% to 9%4, which represents an important opportunity for potential investors.

THE CHALLENGES OF THE SECTOR
Despite the fact that the Government has a National Plan of Staff Training, there is still a limited supply of qualified workforce with the necessary experience for any industrialization process. However, it is undeniable that Angola has, since 2015, a new General Labour Law, better adjusted to the new economic environment, providing investors with the desired and necessary flexibility in work relations management.

Another challenge is related to the deficiencies seen in infrastructures of production support. This fact makes the exports from Angola less competitive. However, since 1998, through the Resolution of the Permanent Commission of the Council of Ministers n° 1/98 of March 10th, the Angolan Government adopted a policy to boost industrial growth poles in some provinces and created a Special Economic Zone in Luanda. With the new economic environment, a new management and promotion model is forecasted, opening doors to the participation of private national investors and foreigners.

THE OPPORTUNITIES OF THE SECTOR

For the investors, foreign and nationals, in the manufacturing industry sector, there are business opportunities, not only in the creation of industrial development poles, but also in the following segments: food industries, textile, clothing and footwear industries, wood industry, wood furniture and pulp, paper and board, chemical and pharmaceutical industries, mineral and non-metallic construction materials, basic metallurgical industries, metal products, machinery and material transport and recycling.


Author: Fernandes G. Wanda
Fernandes Dovale G. Wanda is the Interim Coordinator of the Social and Economic Research Centre of the Economic Faculty of the UAN, with vast experience in the food and beverages management. His last research work “Understanding Post-War Foreig Direct Investment in Angola: South-South led or the West Still Rules?” was published in the Journal of Southern African STudies.
ORCID.org/0000-0002-2514-1243 (fernandes.wanda@fecuan.ed.ao)

From Investment Guide

The Republic of Angola is one of the African countries that can boast a rich diversity of species and ecosystems, making it an important place to attract investments in the environmental area, the sustainable exploitation of natural resources, and scientific research.

Its vast number of species, including two of the icons of the animal and plant kingdom, namely the giant black sable (a magnificent antelope who lives in the heart of Angola, in the province of Malanje) and the Welwitschia mirabilis (an ancient plant inhabiting the Namib Desert) makes Angola and its rich and diverse biodiversity a destination.

The exceptional nature of biodiversity in Angola results from a mix of factors based on its intertropical geographic position associated with a variation of biomes that transport us from the dense forests in the north to the desert in the south. These environments are interrupted by a fantastic escarpment, pockets of Afromontana forest, and a dazzling coast line adorned with beautiful estuaries and mangrove areas.

ANGOLA - A MOSAIC OF OPPORTUNITIES
Natural resources provide, in a context of economic diversification, a mosaic of investment opportunities that allows the leveraged development of productive and economic activities with added value for Angola and the quality of life of its citizens.

The basis of natural resources, with the appropriate investments, on the premise of sustainable development, should invite the emergence of tourism projects. The diversity of mammals, with more than 250 species, and a reserve of avifauna, with close to 900 species, including endemic species such as the Red-Crest-Andua, provide a range of opportunities for ecotourism and birding watching.

The emblematic landscapes, scattered throughout Angola, and with a unique historical and cultural heritage, plus the character of territories still to be discovered, allow the development of various types of tourism.

Among these opportunities are adventure tourism, coastal tourism, ecotourism, and the creation of itineraries that, when associated with the development and strengthening of conservation areas, enable unparalleled business opportunities.

Angola has an extensive coastline of approximately 1,650 km, which covers seven provinces and an Exclusive Economic Zone with approximately 518,433 km2, where a series of activities of economic development, environmental protection, and management of fishing resources, can be implemented. The blue economy development, where the use of the marine space and its resources play a fundamental role, makes the Angolan sea a space for growth.

BUSINESS CHALLENGES FOR THE FUTURE
The development of projects relying on rich natural resources presents a set of challenges for both investors and present and future generations. But investors and their partners must consider these challenges as opportunities for future oriented businesses. The secret of business success in the field of the environment involves deep knowledge of the environmental legislative framework,the involvement of local elements and their strengthening in the medium and long term, as well as the identification of partners, expert in the environmental business.

In the area of environmental business, a pressing need to create foundations for environmentally sustainable and climate resilient economies sustained in green business must be put in place. Priority areas include, among others: renewable energy projects using solar, wind and biomass; the integrated management of solid waste with the creation of recycling projects and the reuse of waste; reforestation and logging; and waste water treatment plants.

In the tourism area, the highlight goes to the three priority tourist destinations: Cabo Ledo in the province of Luanda with a sun and sea expanse; Calandula in the province of Malanje with a landscape stretching on the stone axis of Pungo Andongo and the Calandula Falls, and the Cubango basin in the province of Cuando Cubango, a place associated with the Kavango-Zambezi Transboundary Conservation Area.

LONG - TERM SUSTAINABILITY
In the context of the National Development Plan of 2018-22, environmental issues, reaching across disciplines, aim to ensure the existence and sustaining of the quality of natural resources, ensuring their healthy use for present and future generations. These assumptions are achieved through an appropriate legal and institutional framework and adequate management, involving a strong social participation.

Long-term sustainability in the environment sector depends on long-term investments in compliance with local legislation and institutions, while recognizing the potential of natural resources within the perspectives of the diversification of the economy and sustainable management.


Author: VLADIMIR RUSSO
Vladimir Russo is Technical Director of the environmental consulting firm Holistic and an environmental consultant with more than 20 years of experience in the environment and biodiversity sector. He holds a master’s degree in environmental education from the University of Rhodes and serves as Executive Director of the Kissama Foundation, a non-governmental organization for the protection of biodiversity.
From Investment Guide


FINDING COMMON GROUND
“In the contemporary postcolonial era, the influence of traditional African aesthetics and processes is so profoundly embedded in artistic practice that it is only rarely evoked as such.”
Denise Murrell - Department of Art History and Archaeology, Columbia University


Almost ten years ago, art from Angola was relatively unknown and little documented,both in and outside the country despite the enormous genius there existed. Since then, and despite the strong investments established by the "Sindika Dokolo Foundation" and by Fernando Alvim during the 2000s until now, there is still so, so much to be done. Artists are largely self-taught, unstructured, and left to their own fate; institutions and the general public still mix and confuse "art" with "arts and crafts"; little or no books have been written on the sector; consequently very few libraries have been erected on the theme; little or no inter-exchanges between Angola and international institutions and/or other countries have occurred in order to stimulate dialogue and learning not even within the African continent. On a commercial level, on the one hand if a work of art is expensive it is deemed to be good, and, on the other hand, artworks are mostly sold to expatriates who live in Angola for three years on average and take with them a souvenir – which then tragically means that most of the significant art leaves the country.

Now, it is estimated that during the colonial period, people from the Congo-Angola region made 25% of the slaves in North America1. More recently, between 1980 and 1989, 1,170 Angolans emigrated to the US; between 1990 and 2000, 1,995 more arrived. In 2000, 4,365 Angolans were registered as living in the United States. Finding common ground is a technique people use to facilitate interpersonal relationships. “To find common ground between parties, participants must search for signals of recognition, which are often subtle and prone to misunderstanding”.This text seeks to suggest the possibility of "art" having an important part to play in strengthening, or even establishing new common ground between Angola and the United States of America (USA).

So what can be done between Angola and the USA on a practical level? Three things.

First and foremost, and most importantly in my opinion, there ought to be an investment in education. Education, through the availability of online courses and visiting workshops from USA institutions, universities and/or art schools, can be developed. There is a need to educate Angolans (both in Angola and throughout the diaspora) to understand and appreciate their own art, even more so in the light of the art of history; thus, shifting the existing audience from a small viewership to the general public at large, ultimately creating a notion of national identity and pride. This new social and cultural awareness will involve and bring together the Angolans, undoubtedly even stimulating interest by some members in acquiring art for their personal consumption – much like the Nigerians, the Moroccans, the South Africans and the Chinese, to name a few, have taken pride in viewing and collecting their national art in the recent years. People and institutions, like banks and insurance companies, should be taught to increase and/ or improve their patronage in the arts, not necessarily quantitatively, but above all qualitatively. From my experience, it would appear that the contemporary art world in Angola is more about networking and who gets a cut, rather than the long-term path that artists should take in order to create their work and develop a career. Artists have to be taught to go through the motions and combat their ego in believing they have reached the top. In 2013, a symposium entitle “American Art in Dialogue with Africa and the African Diaspora” was organized by the Smithsonian American Art Museum in partnership with the Smithsonian’s National Museum of African Art and the National Museum of African American History and Culture. This workshop examined the role of Africa and its diaspora in the development of art of the USA, from the XIX century portraiture to American modernismo, and from the Harlem Renaissance to the contemporary art world.

This is an event which could come to Angola to further cross-cultural dialogue. Similarily, there are many organisations like "Friends of African and African- American Art", and can be emulated elsewhere, which support and collaborate on innovative educational programs, in the belief that art has the potential both to distinguish cultures and to unite them.

Secondly, there ought to be an investment in traveling exhibitions and international art exchanges, in order to raise public awareness and appreciation for the legacy of Angolan artists in the USA, and of American artists in Angola. In recent years, globalization has facilitated multi-directional exchange and brought contemporary artists from Angola and its diaspora increasingly into contact with the mainstream USA art scene. For example: in 2015, Edson Chagas was chosen for the Museum of Modern Art’s “Ocean of Images: New Photography 2015” contemporary photography exhibition; and, in 2016, Nastio Mosquito presented “Projects 104: Nástio Mosquito” also at the Museum of Modern Art – both artists´ first exhibition (collective and solo, respectively) at any museum in the USA. In 2018 my gallery has been invited by Prizm Art Fair in Miami to show the works of six Angolan Artists, but the lack of funding is a problem. And without this, not much can be done. Now, the opposite has never been the case, i.e., artists from the USA showcasing their work in Angola—e.g., a collection of works by Kerry James Marshall in Angola, or even younger artists like painter Kehinde Wyley or photographer Ayana Jackson. And here lies a great opportunity for developing traveling exhibitions and art exchanges between the two countries in a more formal and organised manner. This two-way exchange is very unique and important. However, in truth and to a certain extent, social media has helped narrow this gap and allows for more-and-more real-time knowledge acquisition and virtual display of the reality in the USA for Angolans.

Thirdly and finally, and following a trend which has been gaining international relevance, artist residencies can be increasingly developed between the USA and Angola. For many years, artists have used residencies as a way to focus on their work. Many professional artists find it a necessity to periodically do a residency to jump-start or simply continue the direction of their work. Basically, art residencies provide three very important areas for artist development: (i) cross-cultural research: the possibility of researching another culture and identity; (ii) seclusion: the time and space to experiment with new ideas and work uninterrupted by the daily tasks of life; and (iii) professional networking: friendships can be made and professional collaborations and networks formed. It is widely accepted that artists from the USA who have traveled to the continent or engaged firsthand with international African diasporic communities have often found themselves and their work altered by these experiences in significant and unexpected ways. 2018 marks the inauguration of our and indeed Angola´s first official ´Artist- In-Residence´ (AIR) programme called ´Angola AIR´. With the idea that coming to Angola for two months will have a positive impact on an artist´s practice, we would like to receive an American artist per year, whilst sending one the other way in equal number and regularity.

In conclusion, it has been argued that from the onset of the slave trade, Africa has played a key – albeit changing, challenged,and often unseen – task in the history of art of the USA. American artists of differing racial and ethnic contexts with various schedules have envisaged and represented Africa and African populace in their work and/or turned to African cultures and artworks for inspiration (much like their European peers). But maybe now it is time to give back or create a symbiotic relationship, not only to help stimulate the Angolan art scene, but to establish new common ground between Angola and the USA and, in so doing, also stimulate the USA art scene in a novel way.


By Dominick Alexander Maia Tanner
From Investment Guide

EXECUTIVE SUMMARY
This Economic Guide includes the main elements to attract foreign investments to the Mineral and Petroleum Resources Sector, based on the policy proceedings and actions forecast by different instruments of national governance.

As a result of the organic and functional restructuring of the Government’s central agencies, under the terms of the Presidential Legislative Decree n° 3/17, of October 13, the Ministry of Mineral and Petroleum Resources was created.

The Ministry of Mineral and Petroleum Resources, thereafter referred to MIREMPET, is the Ministerial Department that supports the President of the Republic and Executive Power, responsible for the formulation, conduct, enforcement and control of the executive’s politics related to the geological and mineral activities, of petroleum, gas and biofuel.

SECTORS ACTORS
The Mineral and Petroleum Resources Sector includes the following services:

PUBLIC COMPANIES FIELD OF ACTIVITIES LOCATION
Endiama-E.P. Research, exploration, mining, trading and diamond polishing Luanda
Sodiam-E.P. Trading
Ferrangol-E.P. Production and exploration
Sonangol-E.P. Exploration, production and trading
Geological Institute
of Angola (IGEO)
Organization and systematization of geological knowledge and mineral resources’ potential.
National Petroleum Institute (INP) Training and education at high school, technical and professional levels, as well as promoting the training of the field of oil professional, to the workers related to the sector, promoting their update, recycling and scientific, technical and cultural improvement. Southern Cuanza
Regulatory Institute for Oil Derivatives (IRDP) Luanda
Kimberley Process Committee (PK) Luanda
National Agency of Mineral Resources Luanda

INTERNATIONAL ORGANIZATIONS CONNECTED
• African Minerals and Geosciences Council (AMGC);
• African Diamond Producers Association (ADPA);
• Great Lakes International Commission – Protocol Against the Illegal Exploitation of Natural Resources;
• International Energy Forum (IFE);
• Organization of Petroleum Exporting Countries (OPEC);
• Organization of African Geological Surveys (OAGS);
• Organization of African Petroleum Producers (APPO);
• Tripartite Cooperation Mechanism: Angola, South Africa and RDC.

MAIN SECTOR INDICATORS
A) Mining Sub-Sector
1. Main Indicators
Main IndicatorsPeriod
20132014201520162017
Industrial Production of Diamonds (ct.)7.922.8117.856.8358.145.8098.662.5878.973.680
Small-scale Production of Diamonds (ct.)678.883934.506 870.532 358.880 465.122
Total Production of Diamonds8.601.6948.791.341 9.016.341 9.021.467 9.438.802
Ornamental Rocks Production (m3) 52.582 43.145
Industrial Export of Diamonds (ct.) 9.406.696
Small-scale Export of Diamonds (ct.) 388.988
Total Export of Diamonds (ct.) 9.795.685
Industrial Export of Diamonds (Thousand USD) 1.060.304,41
Small-scale Export of Diamonds (Thousand USD) 78.075,86
Total Diamonds Export (Mil USD) 1.138.380,26


1.1. 2018-2022 Forecast
Main Indicators 20182019202020212022
Diamond Production (Million ct.)9,0489,1919,83311,33311,333
Gold Production (Million oz.)4,7198,9819,05925,08625,60
Ornamental Rocks Production (Thousand m3)73,16088,93192,25198,961104,611
Phosphate Production (Thousand T.M.)1.1301.3501.3501.350
Limestone Production (Dolomitic) (Thousand m3)772,194795,360819,221843,797869,111
Production of Siliceous Sand (Thousand m3)12,46712,84113,22613,62314,032
Clay Production (Thousand m3)148,431152,883157,470162,194167,060
Iron Ore Production (Thousand T.M.)4511.8021.8071.790


2. Projects
2.1. Projects in Prospection and Exploitation Phase
Projects Deadlines
Start End
Phosphate Project in Cabinda (Cacata) Province 2018
Phosphate Project in Zaire (Lucunga) Province
Iron Project in Cerca
Project in Mavoio-Tetelo2019
Integrated Iron Mining and Steelmaking Project in Cutato and Cuchi 2016
Iron Mining and Steelmaking Project in Kassala Kitungo
Gold Mining Project (Lombige, Kassala Kitungo area)2018
GNon-ferrous Metals, elements of Rare Earths and Rare Metals and Precious Metals in Longonjo
Iron Mining and Steelmaking Project (KASSINGA)
Mining Manganese Project (Northern Cuanza/Malange)
Gold Prospection Project in M’popo
Gold Prospection Project in Chipindo2013
Project in LuaxeNov-18
PLANAGEO Project2013 2020
Sociedade Mineradora Project (Gold) in Lufo, Lda
Tchegi- Aluvionar Project2013 Abr-14
CAT E42 Jan-18


B) Oil and Gas Sub-Sector
Indicators 20132014201520162017
Crude Petroleum Reserve of Angola (Thousand Million Bbl: 3P) *13,712,79,58,98,16
Crude Petroleum Production (Thousand Bbl)626.176,60610.160,50649.528,60630.113,20595.811,12
LNG Production (BOE)3.585.951,002.786.296,008.127.353,0035.609.891,00
LPG Production – Cabinda Association (T.M.)567.444,39506.237,12495.250,50500.712,60423.940,84
Refinery Derivatives Production of Lunada (T.M.)2.118.966,002.161.686,002.491.688,002.561.663,002.473.434,00
Derivatives Production of Topping Plant of Malongo (T.M.)204.168,00205.065,00193.057,00195.388,00182.406,00
Lubricating Oils Production (T.M.)14.880,8011.522,3011.005,8010.835,408.146,10
Crude Petroleum Export (Bbl)609.330,49586.883,35628.316,61611.240,41575.510,05
Crude Petroleum Export (USD)65.611.115,4856.353.387,2831.393.669,8425.577.533,0831.064.915,92
Crude Petroleum Export Price (USD/Bbl)107,6896,0249,9641,8553,98
Derivative Products Export of Natural Gas and Crude Petroleum (T.M.)1.692.990,411.709.903,771.650.541,962.429.966,586.265.095,24
Derivative Products Export of Natural Gas and Crude Petroleum (Thousand USD)1.298.294,941.226.618,38535.459,09713.777,282.241.401,26
Derivative Products Import of Crude Petroleum (T.M.)4.465.635,334.760.284,404.631.061,743.546.304,363.149.247,20
Derivative Products Import of Crude Petroleum (Thousand USD)4.662.482,144.713.085,982.915.200,791.621.237,161.715.200,23
Internal Sales of Derivative Products of Crude Petroleum (T.M.)6.378.103,006.875.902,926.479.151,155.606.948,514.889.373,03
Internal Sales of Derivative Products of Crude Petroleum (Millions Akz)463.989,90467.391,48647.886,32875.197,73782.853,42
Supply Stations in Operational Status7438899409871.013
Installed Earth Storage Capacity (Thousand m3)393,22358,34358,51363,51363,51
Investments (Millions USD)28.45125.69120.08413.208,638.232,64**

** Provisional Data

4.1. 2018-2022 Forecast

Indicators 20182019202020212022
Crude Petroleum Production (Millions of BOPD)1,651,661,601,561,49
LNG Production (Millions BOEP)148,13168,87171,8611098,1
Refinery Derivatives Production of Luanda (Thousand T.M.)2.2942.9712.9712.9712.971
Supply Stations in Operational Status1.0911.1051.1141.1231.132
Installed Earth Storage Capacity (Thousand m3)358,51394,51605,54605,54605,54


5. Projects
5.1. New Fields Development Projects
Project OperatorsEstimationLocation
Start
Kaombo Total E&P 2018 Block 32 ultra-deep waters
UM8 ENI 2018 Block 15/06 deep waters
Ochingufu ENI 2018 Block 15/06 deep waters
CLOV Phase 1 Total E&P 2019 Block 17 deep waters
CLOV F2 Total E&P 2020 Block 17 deep waters
Vandumbu ENI 2019 Block 15/06 deep Waters
Zinia Phase 2 Total E&P 2021 Block 17 deep waters
Dalia Phase 3 Total E&P 2021 Block 17 deep waters
South Bavuca ESSO 2021 Block 15 deep waters
Chissonga Maersk Oil 2024 Block 16
Cameia Sonangol 2025 Block 21/09 offshore pre-salt

5.2. Structural Projects of Master Storage Plan – PDA
(State of Play until 2nd Quarter of 2018)
Structuring Projects: Master Storage Plan ObjectivesExecutionDeadlines
PhysicalFinancial
1. Oceanic Terminal Construction in Barra do Dande Construction of an Oceanic Terminal with a total capacity of 1,870,950 m³, with 641,500 m³ during the first phase, in order to meet the current storage needs in land and the remaining by 2025. The Project includes the construction of a MOT (Marine Oil Terminal). 24,52% 16,26% 2 years
2. New Storage Site Construction in Lubango Construction of the new Fuel Storage Installation in Lubango, in order to accommodate the Master Storage Plan, in addition to the operational reserve, part of the Government’s safety reserve. With an initial projected capacity of 333,000 m³, it changed to 15,750 m³, after the Project’s scope and layout’s redefinition. 0,48% 0,0% 2 years
3. New Oceanic Terminal Construction in Soyo Construction of the new Fuel Terminal, off Kwanda’s base limits, with a total fuel storage capacity of 45,500 m³, which will support part of the production of the Angola LNG project. 31,10% 25,41% 2 years
4. Expansion and Reconstruction of ICM-Malanje Reconstruction and Expansion of the fuel storage installation of Kinguila – Malanje, to accommodate according to the Master Storage Plan, in addition to the operational reserve and part of the State’s safety reserve. With an initial projected capacity of 133,000 m³ and infrastructures/administrative buildings. 26,20% 15,00% 12 months
5. Oceanic Terminal Expansion and Reconstruction in Namibe Increase of the Oceanic Terminal’s capacity in Namibe, in order to improve the supply of installations in the country’s south region (Lubango and Cunene). The project includes the renovation of administrative buildings and operational support infrastructures. 0,0% 012 months
6. Construction of New Relay in Dundo Construction of the foundations for a Fuel Storage in Dundo City, in order to supply the Northern Lunda-North Province’s market. 0,0% 0,0% 2 years
7. Construction of New Relay in Sarimo Construction of the foundations for a Fuel Storage in Dundo City, in order to supply the Northern Lunda Province’s market. 0,0% 0,0% 2 years
8. Expansion of the Relay’s Capacity in Moxico Increase in storage capacity of fuel installation in Moxico, to improve the country’s eastern region supply. Construction of 4TKs, GA: 1,000 M³; GO: 2,000 M³ and KE: 2X250 M³. The facility has a potential railroad access of products (CFB) from Huambo or Lobito, and it will serve as refueling station for future Saurimo and Dundo facility. 0,0% 0,0% 12 months

5.3. Construction and Renovation of Supply Stations
(State of Play to the 1st quarter of 2018)
Supply Stations
Provínce Construction
StationsPhysical Execution
Benguela PA BOCOIO 55%
PA MERCADO 100%
Bié PA CHINGUAR 70%
Cunene PA CUVELAI 52%
Huambo PA LONGONJO 54%
Cuando Cubango PA KUITO CUANAVALE 68%
Northern Cuanza PA BOLONGONGO 72%
PA PETRO CUANZA 98%
PA QUIKULUNGO 72%
Southern Cuanza PA KALELE 88%
Southern Lunda PA SAURIMO II 69%
Luanda PA CABOLONGO 100%
PA ENTREPOSTO 74%
TERRA VERDE 92%
Malange PA KINGUILA 59%
Namibe PA BENTIABA 39%


5.4. Luanda Refinery Structural Projects
(State of Play to 2nd Quarter of 2018)
Project Description Objective Deadlines
StartCompletion
1. Modernization of fire network (2018 budget allocated to the installation – diesel pump P-397 S.I) Current condition of pump, which is in state of degradation 20182018
2. Upgrade of asphalt unity (U-100) Adapt the asphalt productive chain’s system with 50/70 penetration, in order to ensure a continuous production throughout the year and therefore reduce the harmful gases emissions.20182019
3. Medium and high voltage network automation Ensure better reliability in the refinery’s electric network, avoiding breakage in processing units.20142018
4. Construction of a new building for laboratory and expeditions Respect the Michaelis auditing company’s recommendation regarding security audits, because the proximity between the buildings accommodating the laboratory’s departments, of reception and expedition in relation to the LPG spheres, constitute a high risk in terms of safety. 20152019
5. General stop To ensure the reliability and integrity of the refinery’s equipment. 2018
6. Unity of gas recovery (U-550) Eliminate the existing bottlenecks in the facility, to ensure the 65,000 barrels/ day capacity is reached. 2015 2018
7. New medium tension boards installation Ensure the reliability in the electric power control system of the oil port. 2015 2017
8. Pipeline substitution (roundabout of Boa Vista – IBV´S) Ensure the integrity of the islands, operational and population safety. 2015 2019
9. To install the new kerosene treatment facility (Sweetening) Ensure better kerosene quality and flexibility of the acid processing. 2018 2019
10. Increase in the capacity of the central water pumping in Bengo Maximize the available waterflow for the refinery, from 150 m³/h to 400 m³/h. 2018 2019
11. Manufacture and install a new tanker at the oil port Ensure better operational and personnel safety conditions for loading and unloading operations of refined products, including delivery of crude oil to the refinery, and, as a result, reduce the maintenance costs and eliminate the expenses with frequent repairs in the current tank. 2018 2019
12. Construction of the refrigeration tower base (civil construction work, electric interconnections, mechanics and instrumentation) Build a settlement base to install the tower with a view and ensure the increase in capacity and efficiency in water refrigeration. 2017 2018
13. Improvement of the water supply system for the cafeteria Ensure the supply of potable water to the main cafeteria from the EPAL conduct, in order to grant an alternative supply source. 2018 2018
14. Implement the mass balance management system Elevate the reliability of refinery’s mass balance to the best practices level. Create tank measurements and units flow. 2018 2019
15. Construction of a residual water and draining collector Build a new collector and pluvial water inspection boxes and grease boxes that connect all storage tanks and unload directly to the hydrocarbon separator, consequently meeting an environmental compliance obligation. 2018 2018
16. Synchronization of energy and refinery systems Ensure the synchronization between energy sources, whether from turbine GT-35 to CCRL or vice-versa, from the 15 KV network, so that the maneuvers are done under the recommended electric safety standards. 2018 2018
17. Install the new gasoline production facility (platforming) Ensure the increase of gasoline production 2018 2021

5.5. Refining

Regarding the refining strategy and regarding the guidelines of the Executive included in its Government Interim Program for the year 2018, various refineries construction proposals were analyzed.

• Angola’s current refining situation was diagnosed, along with its demographic indicators, its macroeconomic environment and priority areas for the refineries construction;
• Clearance of the Aggregate Fuel Demand by type was done;
• Current state of Lobito’s refinery was analyzed, as well as aspects related to the construction of a refinery in Cabinda and Namibe.
• The country’s refining strategy was defined and elaborated in three axes:

– Optimization and maximization of the Luanda refinery production (create conditions to increase gasoline production);
– Resume the Lobito refinery construction;
– Invest and/or take part in the construction of a refinery in Cabinda.

The ongoing implementation of phase 2 of the Activities Plan, which includes the following tasks:
– Qualification, notification of candidates and invitation for the clarification of proposals;
– Deepening of the technical, legal and financial due diligence;
– Analysis, evaluation and selection;
– Negotiation;
– Celebration of partnership agreements for future Investments.
6. B usiness Opportunities
DownstreamUpstreamMidstream
1. Services and equipment supply E&P;
2. Transports (terrestrial of petroleum derivatives, of resale of petroleum derivatives and resale of petroleum derivatives in the marine Market (bunkering);

3. Supply stations (constructions and exploration of conventional fuel supply stations; implementation and exploration of containerized supply stations);

4. Trading (of butane gas; trading of lubricants and similar products; of illuminating petroleum);

5. Installation and trading of piped gas in buildings.
1. Exploration and Production;

2. Utilization of Natural Gas (LNG);

3. Calibration of storage tanks and measuring instruments;

4. Inspection and supervision of petroleum or natural gas shipments;

5. Operation and management of terminals;

6. Inspection of supply and distribution facilities;

7. Geographical and geodesic surveys;

8. Geological control of survey;

9. Electricity and instrumentation;

10. Terminal maintenance and supply stations; Catering.
1. Calibration of storage tanks and measuring instruments;

2. Operation and management of terminals;

3. Inspection of supply and distribution facilities;

4. Geographical and geodesic surveys;

5. Electricity and instrumentation;

6. Terminal maintenance; Catering.

7. Petroleum transportation and its derivatives;

8. Trading of crude oil, natural gas and oil derivatives.



Pre-Salt
• The necessity to develop the Angolan Pre-Salt
Annex I
Legal Instruments Governing the Sector
Within the legislative area, the oil and gas sub-sector gave continuity to the revision of petroleum Legislation, in order to update and grant it with more legal instruments and adapt it to the socio-economic reality of the country. 8888

• Law n° 10/04, of November 12th (establishes the access rules and oil operations in available areas on the surface and submerged national territory…);
• Decree n° /09, of January 27th (defines and establishes the conditions and modalities to observe in oil operations);
• Law n° 11/04, of November 12th (customs procedure applicable to the oil sector);
• Law n° 13/04, of December 24th (law on taxation of petroleum activities);
• Law n° 28/11, of September 1st (about the refining of crude oil, transport, distribution and trading of petroleum products);
• Executive Decree n° 79/15 of March 2nd (approves the technical regulation of the project, the construction, technical exploitation and safety of fuel gas networks and distribution branches.
• Executive Decree n° 80/15 of March 2nd (approves the technical and safety regulation of the project, the construction, exploitation and maintenance of containers for the filing of liquefied petroleum gas – GPL bottles);
• Executive Decree n° 81/15 of March 2nd (approves the technical regulation over the safety of natural liquefied gas storage facilities in reservoirs with pressure);
• Executive Decree n° 282/14 of September 22nd (approves the technical regulation related to the project, the construction and the exploitation of supply stations);
• Executive Decree n° 283/14 of September 22nd (approves the technical regulation about the project, construction, exploitation and maintenance of the installations of liquefied petroleum gas storage – GPL, with capacity over 200 m3);
• Executive Decree n° 82/15 of March 2nd (approves the technical regulation of the project, the construction, installation, operation, maintenance, repairing and alteration of liquefied petroleum gas reservoirs – GPL);
• Executive Decree n° 288/14 of September 25th (approves the regulation on the specifications of petroleum products, marketable in Angola);
• Decree-Law n° 17/09, of June 26th (recruiting, integration, formation and development of oil industry personnel);
• Executive Decree n° 45/10, of May 10th (regulation on recruiting, integration, formation and development of oil industry personnel);
• Executive Decree n° 46/10, of May 10th (regulation on the formation and development fund of Angolan human resources in the oil sector).
• Presidential Decree n° 86/18 of April 2nd (establishes the rules and procedures of contests for the acquisition of quality of national concessionaire and for hiring goods and services in the oil sector – revokes all legislation that counters the present decree, namely the decree n° 48/06 of September 1st).
• Presidential Legislative Decree n° 6/18 of May 18th (defines the incentives and the procedure to adequate the contractual and fiscal terms with the qualified marginal areas, revoking the Presidential Legislative Decree n° 2/16, of June 13th.
• Presidential Legislative Decree n° 5/18 of May 18th (establishes the legal regime over the additional research activities in areas of petroleum concessions development areas, revoking the presidential decree n° 211/15 of December 2nd;
• Presidential Legislative Decree n° 7/18 of May 18th (establishes the legal and fiscal regime applicable to the activities of prospection, research, evaluation, development and natural gas production in Angola.
• Presidential Decree n° 91/18 of April 10th (establishes the rules and procedures of activities of abandonment of dismantling wells of petroleum and gas facilities on the territory;

For the mining sub-sector, it is priority to ensure the law enforcement and implementation of the mining code requirements.

• Law 31/11 approves the mining code (regulates all geological and mining activities, namely geological instigation, discovery, characterization, evaluation, exploitation, trading, the use of mineral resources existing in soil, sub-soil, inland waters, territorial sea, continental platform, exclusive economic zone and other areas of territorial and maritime domain under the Republic of Angola’s jurisdiction, as well as the access and the exercise of the rights and obligations related to it.

• Presidential Decree n° 175/18 of July 27th (approves the marketing policy of diamond).





Annex II
Required Contacts
MINISTRY OF MINERAL AND PETROLEUM RESOURCES
Av. 4 de Fevereiro n° 1279-C | Tel: +244 +222 421 307/308/309, Luanda-Angola

SONANGOL E.P.
Rua Rainha Ginga n° 29-31. Caixa Postal 1316. Luanda – Republic of Angola
Tel: (002442) 226642010. Fax: (002442) 332578, 396496
E-mail: secretariageral@sonangol.co.ao

NATIONAL PETROLEUM INSTITUTE
Km12, Estrada Sumbe- Porto Amboim. POBox n° 240. Sumbe. Tel/ Fax 236239008

GEOLOGICAL INSTITUTE OF ANGOLA
Largo António Jacinto | C. P. 1230 C, Luanda-Angola
Tel: +244 222 914 077 732/+244 914 077 751/+244 914 077 737 | E-mail: igeoangola@ hotmail.com

ENDIAMA
Rua Major Kanhangulo | n° 100 Luanda-Angola C.P 1247
Tel: +244 222 391 608/+244 222 391 280 | E-mail: endiamainvest@gmail.com | www.endiama.co.ao

SODIAM
Rua Ranhia Ginga n 87.7 n° andar | Edificio Endiama/De Beers | CP.1072 Luanda-Angola
Tel: +244 222 370 311/+244 222 370 217/+244 924 156 986 | E-mail: geral@sodiam-ep. com

FERRANGOL
Ferrangol-E.P. | Rua C, Sector B, Q6, n° 72 | Talatona, Luanda – Angola
Tel: +244 222 016 085 | www.ferrangol-ep.co.ao

By: Ministery of Mineral and Petroleum Resources
From Investment Guide

AN OVERVIEW OF THE ANGOLAN OIL AND GAS INDUSTRY

Angola’s commercial oil production started in July 1956 onshore on the Kwanza Basin, and six years later the country became self sufficient in refined products through the Luanda refinery. The discovery of the Tobias field, south of the Kwanza river, followed by the first offshore discovery in Cabinda in 1966, led to the start of exports to international markets by Gulf Oil in 1968.

After Independence in 1975, the country was still at war and was the sixth oil producer in Africa with reserves estimated at one billion barrels, of which three quarters were in Cabinda. The country created the foundations to develop its oil industry potential, establishing the national oil company Sonangol, which was assigned the role of Concessionare, and launched the Production Sharing Contracts (PSAs) to gain access to those reserves without having to invest, and attract international oil companies that were interested in the offshore of the Congo Basin, which was one of the most prolific basins globally.

In parallel, Sonangol acquired 51% of the producing areas in Cabinda (from Gulf Oil), Soyo and Kwanza (from Petrofina), becoming the biggest exporter of Angolan oil (equity and concessionaire oil) until today. The partitioning of the Angolan offshore in blocks of 4,000 Km2 each, enabled the production to increase to 250,000 barrels per day (b/d) in 1986, and to 500,000b/d six years later.

Although the production increase in the 80s was mostly from the offshore shallow waters (less than 200m of water column),Sonangol, encouraged by around ten American and European companies, dedicated great attention to the preparation of exploration in deepwaters (up to 1,500m of water column), commissioning studies that showed the great oil and gas potential, and adapted its PSAs to higher risk and bigger investments, with the introduction of the internal rate of return (IRR) and the extension of the exploration and development periods.

The various discoveries in the deepwater blocks 14, 15, 17 and 18, allowed the production to grow past 1,000,000b/d in August 2004 and 1,500,000b/d in January 2007. By October 2004, most of the country’s oil production was already coming from deepwater fields, which is still the case today and will likely remain the case in mid-term avec in the future.

Today, around 82% of Angola’s oil production of 1.5 million barrels per day comes from deepwater, which has higher exploration and development costs than the marginal barrel, which is the Shale Oil. Angola and Brazil are highly dependent on the oil price, as opposed to the U.S. and Nigeria, which have a large onshore production and depend less on their deepwater production from the Gulf of Mexico or the Niger Basin.

The increase in the produced associated gas resulted in the development of the Angola LNG by Sonangol and former Texaco in the late 90s, with a capacity of 5 million tons/year. The development project only started in 2007 through a partnership with the main operating companies present in Angola (except ExxonMobil) with the exports of the LNG, condensates and propane starting in 2013. The liquefaction plant monetizes the gas and provides butane for our internal market,as the production from the Sanha field in block 0 is insufficient to cover the more than 300,000 tones/year consumed by the Angolan market today.

At the turn of the millennium, the exploration success of the Brazil’s pre-salt,attracted some of the major international oil companies (IOCs) to the deepwaters of the Kwanza basin. After a sizable exploration investment, more gas was discovered, which seems to be the dominant hydrocarbon in this basin, driving the country to create a gas master plan to use the gas already discovered(around 10Tcfs) and to be discovered, to produce fertilizers, basic petrochemicals or electricity generation.

The recent changes to the economic and financial conditions of the production sharing agreements (PSAs) aimed at developing marginal fields, promoting exploration and development of natural gas, and exploring existing development areas with old discoveries, should improve the economics of future projects. They present an opportunity for the companies already operating in the country and could improve Angola’s reserves to production ratio, which at the current production rate is around 15 years.

In May 2018 Sonangol announced their intention to sell some of their participations in various offshore blocks, some of them already in production. This could attract more foreign oil companies to Angola. The same could be said about service companies, as the oil price has firmly sat above the 60-dollar mark and the exploration and development activity picks up, including the natural gas fields to feed the Angola LNG. Also, in the cards for the near future are the possibility of international tenders for new shallow and deepwater blocks.


BY JOSÉ DE OLIVEIRA
From investiment guide

Capital Markets

The trend, registered in recent years, of growth in demand for real estate investment product with income still remains. However, there are still difficulties in the supply of products with immediate income, namely “prime” product, a situation that has led investors to opt for product with no immediate income.

The growth of the investment market in recent years is expected to slow down, predominantly in terms of the non-immediate return on investment. The observation of this cyclical change leads to the demand for investment product to be fixed on assets with immediate or short-term return. The pursuit for a “defense of capital” still remains, however less active.

In 2018, we expect commercial prime market yields (offices and retail) to be between 10 and 12%, and in the residential market between 9% and 11%.

Office

The acquisition for investment and for own occupation are factors driving a market in which the supply is increasingly competitive and of higher quality.


Given the current macroeconomic context, we have witnessed the trend of more and more companies opting to optimize their spaces according to their real needs, as a way to obtain a more efficient operation costs management. Typically the choice lies in more modern offices, with smaller area, lower incomes and lower operating costs.

In a scenario of contraction in demand and price reduction, real estate developers have opted to wait for a positive macroeconomic evolution to progress with their projects in a safer way. This decision is reflected in the reduced rate of new construction, with projects being developed at a moderate/slow pace, with the new offer continuing to be mostly characterized by quality and competitiveness.

As the result of the difficulty to repatriate capital, we have witnessed the continued demand for the acquisition of real estate products by individuals and companies. There are expectations that this trend, aimed at the acquisition for investment or for own occupation, replacing spaces leased to third parties, may continue to contribute to a greater dynamism of the office market, albeit at an accelerated pace.

Concerning commercialization values, the trend of a decrease in rental values has continued, with the prime rent in 2018 (First Semester) being 75USD / sq. m while the prime selling price remained at 7,500 USD / sq. m.


Retail
Over the last three years, we have witnessed a strong reduction in consumption and a decrease in the variety of products available, associated with the rising inflation and the restrictions on access to foreign exchange and inherent import constraints.

The consequent climate of uncertainty has severely conditioned the opening of new street stores and the conclusion of large commercial projects planned for the center of Luanda.

Shopping Center Development Pipeline
NameLocationGross Lettable Area (GLA)Opening Date
Shopping FortalezaLuanda18.000 m2 2018 - 2019
Luanda Shopping - Gika Luanda 60.000 m2 No date scheduled
Torres Kianda Luanda 6.635 m2 No date scheduled
Vista Club ShoppingLuanda7.500 m2 No date scheduled
Muxima PlazaLuanda 4.681 m2 No date scheduled
Kinaxixi Shopping Luanda 45.000 m2 No date scheduled


At the same time, we witnessed the expansion of the commercial fabric in the areas of Talatona, Kilamba, Morro Bento, and Cacuaco, closely associated with the emergence of new commercial complexes, which made the periphery of Luanda a reference zone of the retail segment. It should be noted that the growth of these commercial units is driven exclusively by large distribution operators.

Currently the prime rents of street stores are between 65 to 75 USD/sq. m GLA/ month while those of stores in shopping centers or galleries range between 80 and 100 USD/sq. m GLA/month (lower for large stores).

Regarding the sales numbers, they range between 6,500 USD / sq. m GLA and 7,000 USD / GLA for street stores (including small galleries), although there are no track records of large commercial areas sold in Angola, that allow us to meet the metrics to be reached.

Residential
The residential market in Angola has been suffering from the signs of economic slowdown since 2014, namely:
• Reduction of the number of transactions in the market
• Delayed completion of projects under construction
• Postponement of the start of construction of projects in pipeline
• Increased vacancy rate

The development of projects in recent years has been very much in line with the demand by companies to set up their expatriate staff, mainly in the center of the city and in Talatona.

At present, given the reduction of these demand indices, the leasing situations of large-scale demand by a single entity are sporadic or residual.

Although the value of units sold in 2017 is not known, Zenki Real Estate estimates that they have traded 20% less than in the same period.

There is a lack of residential units oriented to the majority of the population, that is to say low and medium income, and the solution so far implemented by the State to face the challenge of providing access to the population of this type of housing was intensive investment and with the “revenue” compromised by failure to comply with one of the assumptions associated with the “renda resolúvel” (resolvable rent) model, that is, non-payment by the “owners”, without the State having so far triggered the real estate recovery clause.

I&L The development of the Angolan industry has been a strong commitment of the Government, which has been reinforcing the industrial sector in a more professional way. This real estate segment has been characterised mostly by development for own use and by an increasing speculative supply of industrial and logistic parks. In addition, we have witnessed a greater definition and consolidation of industrial zones, with the Viana area, and especially the PIV, the most active.

Although we have witnessed a decrease in the demand in the last year, considering the Government’s continued commitment to industrialisation and diversification of the economy, based on the substitution of import, this segment is expected to show a growth trend in the coming years.

Simultaneously, the construction of the new Luanda International Airport, which will be inaugurated in 2020 and the consolidation of several industrial zones, will be a key factor in relaunching the real estate market.

Hotel The tourism market has also been facing the negative impact of falling oil prices and the consequent economic crisis that the country has been dealing with in recent years.

With the departure of many expatriates from Angola, the tourism sector depends almost exclusively on the oil sector, a situation that has been reflected in the main operational indicators, with a special impact on hotels.

Despite the adverse context that the segment has experienced, during the year 2017 we recorded some activity in Angola, namely with the appearance of new hotel units in Luanda.

Even with the deceleration in the hotel market and the outflow of foreign investors, Angola continues to have the potential to attract investment in the very large tourism sector, which should be explored following the diversification policies of the Angolan economy.

www.mintrans.gov.ao
Zenki Real Estate
From Investment Guide