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Macroeconomic perspective Angola v2.pptx

Deutsch-Portugiesische Industrie- und HandelskammerCâmara de Comércio e Indústria Luso-Alemã

Macroeconomic perspective for Angola

Gustavo Lopes da Silva,Partner

Lisbon, 15th November 2010

2Macroeconomic perspective Angola v2.pptx© 2010 Roland Berger Strategy Consultants

Content Page

A. Roland Berger experience 3

B. Country macroeconomic perspectives 6

C. Recommendations for investing in Angola 15

3Macroeconomic perspective Angola v2.pptx

A. Roland Berger experience


Our profile

Founded in 1967 in Germany by Roland Berger

41 offices in 29 countries, with approx. 2,000 employees

180 RB Partners currently serving approximately

1,000 international clients

Roland Berger Strategy Consultants is a truly global firm –We provide strategic advice to the world's top decision makers

Presence in 4 continents – Europe, America, Asia and Africa

Source: Roland Berger analysis


Roland Berger is deeply involved with the Angolan market, supporting key players in several industries

INDUSTRY TOPICS


> AVIATION

> CEMENT

> CONSTRUCTION

> TOURISM

> OIL & GAS

> Market entry strategy

> Building local partnerships

> Business Valuation

> Development strategy

> Governance and organization


B. Country macroeconomic perspectives


0,7

Angola is located in sub-saharan Africa and has borders with Congo, Dem. Rep. Congo, Zambia and Namibia

Luanda 4,5

0,5 Uige

0,7 Malange

1,0Huambo

1,2 Kuito

0,8 Lubango

Benguela

0,1 Namibe

Estimated city population [2009; M]

0,2 Luena

Source: Angola Global; Press; Roland Berger analysis

200 km

Angola – key facts

Namibia

Congo

Botswana

South Africa

Angola ZambiaZimbabwe

Mozambique

Dem. Rep. Congo

> Capital: Luanda

> Area: 1,25 million km2

(3,5x Germany)

> Population: 18,5 M

> GDP09: $81,4 Bn

> OPEC member since early 2007

> SADC member


Angola has been experiencing tremendous economic growth, which is expected to continue going forward

Source: Economist Intelligence Unit; Roland Berger analysis

Angola – historical GDP growth and forecasts [2005-2014; % yoy]

7,2%7,8%9,5%6,2%

9,4%

-0,5%

11,7%

21,1%18,6%

20,6%

2005 2006 2007 20132012 20142008 20102009 2011

> Real GDP is expectedto reach $191,6 Bn in2014, 1,3x currentPortuguese GDP and8,6% of currentGerman GDP

> World GDP CAGR11-14is 2,9%

> Sub-saharan AfricaGDP CAGR11-14 is5,0%

CAGR05-10: 11,8% CAGR11-14: 8,2%historical estimate

Presidential elections

Oil pricesand production


Despite a strong decrease in the dependence of Oil & Gas, Angola is still in the early stages of development

Source: Angola Ministry of Finance; Economist Intelligence Unit; Roland Berger analysis

GDP breakdown by industry / economic sector ($ Bn)

23%

17% 12%7% 9%

9%7%2%

Commerce

Agriculture, forestryand fishing

Services (telco, banking)ConstructionManufacturingOther

2009

81,4

40%

8%1%

2006

45,2

56%

4%5%

Angola is still in the early stages ofdevelopment…

> … with construction doubling itsweight in the GDP

> …with agriculture, forestry andfishing gaining significant share

> … with tertiary services growingin line with overall economic growth

… having strong growth potential

$25,2 Bn$32,8 Bn

Oil & Gas

-5,1%

+9,2%

+34,7%

+42,8%+21,7%+48,8%+40,9%

CAGR06-09


Angola ranks #18 in proven oil reserves – oil production is expected to continue stable after an initial growth period

Source: Angola Ministry of Finance; Economist Intelligence Unit; Roland Berger analysis

Oil environment in AngolaPROVEN OIL RESERVES(2010; Bn bbl)

OIL PRODUCTION('000 bpd)

77

AngolaAzerbaijan

…Kuwait

AlgeriaMexico

138IranIraq

262Saudi ArabiaCanada 175

Norway

115104

121010

RANK

#1#2#3#4#5

#16#17#18#19#20

2.1502.1252.1052.0351.9501.8351.8991.820

1.421

878

20072006 2009 20112008 20102005 2012 2013

+44%

2014

+2%

OPEC member


China, USA and Brasil are now key trading partners – imports and exports are expected to grow ~ 15% annually until 2014

Note: Consumer goods are goods that are ready to be consumed (such as clothes and food); Capital goods are goods that are used as capital in the productiveprocess (such as plant machinery); Intermediate goods are goods that still need to be transformed in order to become consumer goods (such as clinker)


Characterization of key economic foreign flows

17,1%

15,2%

Brazil

11,0%

10,2%

USA

China

Portugal

IMPORTS(2008; % of total)

EXPORTS(2008; % of total)

FOREIGN DIRECT INVESTMENT(2009; $ Bn)

CAGR11-14: 15,3% CAGR11-14: 14,4% Inward FDI CAGR11-14: 3,8%

6,77,8

Outward flow

Inwardflow

Net FDI flow

-1,2

Current FDI stock represents90,5% of GDP

Intermediate goods

Consumer goods 61,6%

27,3%Capital goods

11,1%

South Africa 4,5%

France 6,0%

USA 28,7%

China 32,9%

2,1%Others

Diamonds 1,8%

Crude oil 96,1%


Construction and Oil & Gas companies from China and Brazil are already present in Angola

1) Estimate


Relationship with key foreign countries

0,5

1,4

1,8Brazil

China 4-111)

Portugal

Germany

CREDIT LINE ($ Bn; 2009) KEY FOREIGN COMPANIES – NON EXAUSTIVE

CONSTRUCTIONAND BUILDINGMATERIALS

OIL & GAS

SERVICES


Macroeconomic outlook is expected to be stable with a reduction of foreign debt with oil proceeds

1) Government is responsible for the price policy in Mozambique


Evolution of key macroeconomic indicatorsEXCHANGE RATE (Kz:US$) CONSUMER PRICES INCREASE FOREIGN DEBT (% of GDP)

908888899279

2014201220102009

13%12%13%13%13%14%

2014201220102009

10%12%14%17%20%18%

2014201220102009

Recovery of oil prices will allow the BNA to re-establish the peg to

the US$

Strong increases in consumer prices are expected, but at a fairly

constant rythm

Oil proceeds are expected to be in part used to decrease

dependency on foreign debt

SOUTH AFRICA09: 7,1%BOTSWANA09: 8,1%NAMIBIA09: 8,1%MOZAMBIQUE09: 3,3%1)

SOUTH AFRICA09: 25,7%BOTSWANA09: 14,2%NAMIBIA09: 8,8%MOZAMBIQUE09: 42,3%


The Government of Angola wants to have an active role in the economic development of the country


Expected developments for the business environment in Angola> There has been an effort from the Angolan Government to channel oil funds to productive

investment areas (100.000 bpd) and foster private enterprise and competition –examples are the planned Banco de Desenvolvimento de Angola (BDA) and Bolsa de Valores de Angola, Luanda's stock exchange

PRIVATEENTERPRISEANDCOMPETITION

FUNDING

LABOR MARKET

SOCIAL INTERVENTION

> Angola is trying to diversify funding sources, decreasing the importance of China and accessing credit from other sources, such as the Paris Club, Brazil, Russia and South Africa

> There is a lack of skilled manual workers and local managers, a gap which is expected to remain or widen in the forthcoming years due to strong economic growth

> Several programs will be launched to foster areas as diverse as agriculture and rural development, social housing ("Uma casa para todos" – 1 million houses planned), urban recovery, infra-structures and the manufacturing industry


C. Recommendations for investing in Angola


Angola has a promising macroeconomic outlook but access to foreign investors can be a challenge


Recommendations for companies investing in Angola

Invest together with local partners or advisors you can trust1Physical presence as a must2

Attention to credit concession and expatriation of capital4When doing business in Angola be an Angolan3


THANK YOU

Gustavo Lopes da SilvaPartner

Rua Castilho, 1652° andar1070-050 Lisboa

Phone +351 21 356 76-00Fax +351 21 352 43-60

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