Angola Boosts Infastructure Spend to Attract InvestmentColin McClelland
Angola is investing in projects ranging from ports to airports after missing its foreign investment target because spending on road and hydropower projects lagged behind what was needed to lure greater funding, the country’s investment agency said.
The nation is expected to attract $4 billion a year in non-oil investments from abroad by 2017, failing to meet its target to register that amount annually from 2012 to 2017, Maria Luisa Abrantes, chairwoman of the National Private Investment Agency, said in an interview from the capital, Luanda on Oct. 1.
“For a country coming from war, we’re just taking off and like a jet plane, we need to attain cruising altitude,” Abrantes said. “It’s very difficult for investors to come to a country without infrastructure, but they need to visit and have a goal so they’ll know in which area to invest to get a return.”
Africa’s biggest crude producer after Nigeria is trying to spur its economy through investments in a wider range of industries, including farming, real estate, tourism and telecommunications, following a 27-year civil war that ended in 2002. It pumped about 1.74 million barrels of oil a day in September, according to data compiled by Bloomberg.
Ports are under construction or planned in Cabinda, Zaire and Bengo provinces, while a new cargo terminal is operating in Viana, 12 kilometers (7.4 miles) southeast of Luanda, and an international airport is being built near Viana, Abrantes said.
Improvements to electricity generation and distribution worth $23.4 billion are planned by 2017 and the Benguela Railway connecting Angola’s coast on the Atlantic Ocean to Zambia is almost completed, she said.
“These are going to attract investors,” Abrantes said.
Improving Angola’s inadequate road networks and unreliable power system, which is among the least efficient in Africa, to the level of a middle-income nation could help boost annual growth by 2.9 percentage points a year, according to the World Bank. Addressing infrastructure challenges would require investment of $2.1 billion over a decade, the bank said.
The economy is forecast by the International Monetary Fund to grow 6.2 percent this year, outpacing the average 5.6 percent rate for sub-Saharan Africa and 5.3 percent for emerging markets and developing nations.
Foreign investment in Angolan industries excluding oil stood at $1.9 billion by the end of September, compared with $2.3 billion for all of last year, Abrantes said.
Agreements signed this year by the investment agency include a $282 million hotel complex on Luanda Bay by the closely held M&J Pestana-Sociedade de Turismo da Madeira SA, and a sugar plantation deal by Cia. de Bioenergia de Angola Lda. worth $452 million, Abrantes said.
The plantation is 40 percent owned each by Salvador, Brazil-based Odebrecht SA and Angola-based Damer Industria SA, while state-run petroleum company Sonangol Holdings holds a 20 percent stake.
Other investments include a $103 million hotel complex offshore Luanda known as Ilha da Cazanga, $66 million of investments by cable operators Zon TV Cabo Portugal SA, and a $29 million bottling plant for Sumol+Compal, a Portuguese beverage company, documents from the agency show.
The government may this year reduce the minimum investment threshold for non-Angolans from $1 million and revise tax incentives for industries based on the amount of capital expenditure and training they plan, Abrantes said.
Construction companies get tax breaks on materials while private projects face higher taxes than public ones, she said. Local partners are only required in the oil and diamond industries.
Anip, as the agency is known, is drumming up new business through investor tours in the U.K., Germany, Poland, Turkey, South Korea and the United Arab Emirates, Abrantes said.