However, according to Nicolas Danton, country manager for DHL Express in Angola, investors shouldn’t be intimidated by these challenges, and should rather focus on the plethora of business opportunities the country has to offer.
“Business opportunities are of such a nature that you can basically just reach out and grab something,” Danton told How we made it in Africa in a recent interview.
He added that Angola is seeing significant infrastructure development. “There is a lot of development on the infrastructure side. There is construction everywhere and they are really turning the capital Luanda into a nice city.”
According to Danton, the country can also be a very fun place. “The Angolan people are very friendly people, and you’ve got good restaurants and a very active nightlife. Be prepared to eat some good food and to enjoy Angolan hospitality.”
Growth supported by oil industry
Angola’s economy is largely driven by its oil industry. According to the African Development Bank, economic growth is expected to reach 8.2% in 2013, and 7.8% in 2014, driven by the expansion in the oil and gas sector and a public expenditure programme designed to encourage economic diversification.
Danton noted that the oil industry is responsible for most of DHL’s business in Angola.
The oil and gas industry is also creating opportunities in other sectors. “When the oil and gas companies arrive, they are desperate for a variety of services. There are opportunities to provide these companies with services.”
He said that Angola’s services industries are fast catching up with the rest of the world. “For instance, the banks are quite high-standard and professional. In the telecommunications industry they have already deployed 4G.”
Angola has also started to revive the country’s once thriving agricultural sector. Before the war, Angola was one of the world’s foremost coffee exporters. It also produced crops such as palm oil, cocoa and cotton, among various others.
Danton said that companies looking to enter the Angolan market need to do their research and be prepared to spend money.
Luanda has been ranked as one of the world’s most expensive cities for foreign business people and expats. An average hotel room can set you back US$450 per night, while a meal at a restaurant can easily be $50.
“What is costing a lot of money is accommodation. Luanda is not a big city, so prices for hotels, private houses and things like that are very high. Dining out and visiting bars is also expensive,” Danton noted.
He added that prices for transport can also be steep. “If you need to take a cab from the airport to go downtown, it’s going to cost a lot of money.”
Business people that don’t speak Portuguese need to work with a translator. “Angola is predominantly Portuguese. It is even more difficult when dealing with the public sector. They simply don’t speak English,” said Danton.
He explained that investors need to be well prepared with regards to making sure they’ve got the right paperwork. “You also need to have everything in place regarding registering your company with the right authority.”
Danton said that despite the challenges, doing business in Angola can be highly rewarding. Investors do, however, need to be patient. “There is no such thing as making a quick buck here. Don’t expect things to happen quickly, you need to be extremely patient.”