SA companies sign business deals on Angola trip

Wesgro, the trade and investment promotion agency of South Africa’s Western Cape Province, recently took a delegation of business people to Angola. We asked Michael Gamwo, Wesgro’s manager for Africa, about what happened on the trip.

Why did Wesgro decide to take a delegation to Angola?

This trip formed part of Wesgro’s Western African Trade Corridor Programme. It was aimed at increasing the Western Cape’s presence in Angola and generating export and partnership opportunities in the key sectors of the Western Cape economy. Companies generally join Wesgro on trade missions for three main reasons: to look for export contracts; to explore partnership opportunities for service orientated businesses; or to set up business in the country.

Angola is reported to be Africa’s fastest growing economy and is attracting billions of dollars in foreign investment following several years of double-digit growth. The rapid growth of the Angolan economy on the back of the expansion of the oil sector and the end of the country’s debilitating civil war, have sparked a consumer boom as rising disposable income increased demand and spending. Consequently, the market for consumer goods in Angola has grown significantly, thereby providing potentially lucrative opportunities for exporters of consumer goods and services seeking to expand into the Angolan market.

The Western Cape Province accounts for 55% of South Africa’s trade with Angola. In 2010, trade between the Western Cape and Angola was worth R10.5 billion (US$1.36 billion) comprising of R1.6 billion exports and R8.9 billion in imports.

Give us an overview of the companies that joined you on the mission

The sectors represented in the delegation included oil & gas, furniture, agribusiness and engineering.

Would you describe the mission as successful? Were any deals signed?

Most of the furniture companies that participated in the mission returned with export contracts to supply their products to Angolan distributors. The oil & gas companies that participated secured partnerships with Angolan businesses for future projects. One of the Western Cape retail companies that joined the mission will be setting up retail outlets in Angola in the near future after identifying joint venture partners and appropriate sites for their Angolan operations.

Angola’s business environment has been described as ultra-challenging. After this mission, would you agree with this?

Though Angola presents numerous business opportunities in a wide range of sectors, this market is a difficult one to enter because of the cultural and language barriers, coupled with stiff competition from China, Portugal and Brazil, their traditional partners.

Angola is currently rebuilding their infrastructure after being ravaged by many years of civil war. China is at the forefront of most of the projects in Angola. But with proper homework and awareness of the challenges, South African companies are well placed to exploit the available opportunities in Angola. Making use of a reliable partner in Angola is key to operating a business in Angola. Product distribution in Angola can be problematic due to the poor transportation infrastructure and there are security concerns in certain areas of the country, such as the enclave of Cabinda.

Exporters should therefore seek to identify Angolan partners that have a network of rural distributors in order to penetrate remotes areas. Another important thing to consider before exporting to Angola is the fact that under the terms of the Angolan Commercial Activities code, labelling in Portuguese is one of the requirements for imported goods to be sold in the country.