After decades of war, peacetime has heralded a boom in trade, investment and contract opportunities in the country, yet South African business has been slow on the uptake until now.
However, that situation appears to be changing. To begin with, the recently promulgated Private Investment Law, the new Company Law and other business-related laws, as well as the improving relationship between the Angolan government and the International Monetary Fund (IMF), have made conditions for South African investment in Angola far more conducive.
Moreover, Angola’s commitment to the Nepad peer-review mechanism and the successful recent engagement of many South African companies in project-delivery work in Angola, especially post-2002, have together brought a new dimension to investing in that country. Among others, Murray & Roberts’ massive oil log base project in Luanda harbour, Grinaker LTA’s prestige head-office-building project for Angolan oil giant Sonangol, and Group 5’s huge Nova Vida housing project have helped to lift the SA–Angola business relationship to unprecedented levels, and have laid a strong foundation for a move into real investment into a rapidly stabilising economy. According to South Africa–Angola Chamber of Commerce (SA–ACC) honorary CE Roger Ballard-Tremeer, investment opportunities abound for SA companies in many sectors of the Angolan economy.
These include infrastructure, agriculture and fishing rehabilitation and development, tourism and the hospitality industry in general, industrial development (especially the manu-facturing sector), and in the mining and minerals-processing sector. Pointing out that details of the economic and financial policies and investment priorities of the Angolan government are available from the SA–ACC, he states that these opportunities may be increased through a variety of means. “Access to Angola-relevant experience, knowledge and skills (EKS) is a critical success factor in the investment process. Desktop Internet surfing and scanning of media reports simply cannot substitute for real EKS,” he states.
He continues that the many com-panies that have successfully engaged in business – including significant investment – with Angola, since the normalisation of the diplomatic relationship between the two countries in 1994, are those that have met the cross-cultural business diversity challenge head-on. The first step taken by most of these companies has been to recognise that there is no alternative to in-the-field knowledge seeking and gathering. “They also recognise that relationship-building and the maintenance of good relationships with one’s business partners and with others, without whom business would not be possible, comes a close second and that it is an important key to establishing sustainable business with Angola,” he elucidates.
Thus, South African firms may improve business opportunities by associating with and learning from others seeking to develop or maintain their business in the same markets.
“They can do this by joining the South Africa–Angola bilateral chamber of commerce. It is also advisable to inform the South African embassy in Luanda at an early stage of your presence in the market and keep the ambassador informed of both good and bad progress with your business,” he continues.
Equally important is interaction with the appropriate authorities, right from the outset.
Located at the Fedsure Towers, in Sandton, Johannesburg, the Angolan trade representative’s office is a primary starting point.
This should be followed by a call on Anip, a Luanda-based Angolan government agency for private (and foreign) investment through which all partnerships and all foreign investment must first be registered.
“Anip will walk you through the laws, regulations and red tape, and will facilitate and introduce you to the other governmental authorities such as Inia, the industrial development authority. “However, all your investment decisions remain your own,” Ballard-Tremeer emphasises. Chamber manager Nadia Topo-lova suggests that one of the best ways for SA firms to gain access to investment opportunities in Angola is to find suitable Angolan partners, as this facilitates successful business communication and eases South African firms into an understanding of Angolan social and business culture. “SA–ACC recently received a document from Anip that contains several investment opportunities that exist in Angola. This document is available to interested parties through the SA–ACC,” Topolova informs.
Ballard-Tremeer continues that serious investors devote time and resources to obtain wise, independent, experienced and knowledgeable counsel, and that they will then con-sider and reflect on all possible investment destinations before embarking on any single investment destination. “Once one has taken an investment decision, stick to it. This has serious implications, especially in Angola, where the foreign investor simply must stick to the letter of the law, even while others may appear to be taking shortcuts and circumventing the rules,” he cautions.
This is because taking a decision to invest in Angola means that Angola becomes part of the workplace and it is therefore necessary to behave in that country as one would strive to do at home. “Board level adherence to the King II principles means doing so both at home and in one’s chosen investment destination. “It is most strongly advised that one ensures that there is Angola EKS governance expertise within the company and, at the very least, at non- executive-director level,” he stresses.
Ballard-Tremeer maintains that, if there is any single reason why some attempts at investing in Angola do not succeed, it is due to the failure of the partners to the investment to conduct mutual background checks. Background checking alone will not ensure investment success, but it will mitigate the investment risk considerably.
There are several ways for South African companies to sell goods and services in the Angolan market. “Depending on the nature of one’s products, one can, at one end of the spectrum, simply piggy-back on the wide shoulders of a corporation or consortium of corporations and small, medium and micro enterprises that together have the resources to invest into Angola,” he states.
Again, more information about these companies and consortia is available through the SA–ACC.
He further advises that South African firms consolidate their business relationships with such com-panies at home, while simultaneously making sure that they are aware of the value that they can add to their Angolan ventures. “Going it alone from scratch is fraught with difficulty, not the least of which is ensuring that one has the ability to communicate with all, not just some, of the people with whom you wish to do business. Master Portuguese yourself – even if it is only at conversational and reading level. The reward will be worth the effort. The SA–ACC will help you to do this,” he concludes. Thus, there is little doubt that business relations between South Africa and Angola are on the up, though it is clear that South African companies need to research Angola and its business environment thoroughly before entering into operations there.
More than 100 executives and senior managers of South African companies attended a recent seminar organised by the SA–ACC with the Gordon Institute of Business Science (Gibs) on doing business with Angola.
As observed in the Gibs Review’s March 2004 edition, this indicates the high level of interest shown by South African firms seeking to participate in the post-conflict reconstruction of Angola.
However, because they will face stern competition from countries like Portugal, Brazil, and the US, conducting the most thorough research of the Angolan business environment and adhering to the soundest advice are highly advisable.