Imara African Cement Report Africa, the last cement frontier Angola ...

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Political landscape – A foregone conclusion The Movimento Popular de Libertação de Angola (MPLA) has dominated Angola's politics since independence in 1975 and it has further consolidated its political hegemony since the end of Angola‟s 27-year civil war in 2002. Power is centralised in the office of the presidency, which has been held for the past three decades by Mr José Eduardo dos Santos. Following the success of the 2008 legislative elections, the next legislative elections are expected to take place in 2012, and with the adoption of a new constitution, Mr Dos Santos is sure to win again. Angola's motto is Virtus Unita Fortior, a Latin phrase meaning "Virtue is stronger when united." The executive branch of the government is composed of the President, the Vice-Presidents and the Council of Ministers. For decades, political power has been concentrated in the Presidency. Governors of the 18 provinces are appointed by and serve at the pleasure of the president. The Constitutional Law of 1992 establishes the broad outlines of government structure and delineates the rights and duties of citizens. The legal system is based on Portuguese and customary law but is weak and fragmented, and courts operate in only 12 of more than 140 municipalities. A Supreme Court serves as the appellate tribunal; a Constitutional Court with powers of judicial review was only constituted in 2010, despite statutory authorization. The first legislative election in 16 years took place in September 2008. The MPLA won by a landslide with 81% of the vote. The elections were contested by 14 political parties, but only four opposition parties were able to secure representation in parliament, where the MPLA‟s landslide translated into 191 of the 220 seats. 16 seats went to UNITA, 8 to the Partido de Renovação Social (PRS), 3 to the Frente Nacional para a Libertação de Angola (FNLA), and 2 to Nova Democracia. International observers pronounced satisfaction that the elections had been „free and fair‟ but, for the most part, the MPLA had a monopoly of the media and campaign financing that placed other parties at a clear disadvantage. Suspected electoral irregularities notwithstanding, however, the outcome was accepted by the opposition, and gave the MPLA the strong democratic mandate that it previously lacked. Having won two-thirds of the National Assembly seats, the MPLA now has the majority needed to push through changes to the constitution. In contrast with the success enjoyed by the MPLA, the main opposition party, União Nacional para a Independência Total de Angola (UNITA) polled just 10.4% of the vote, and went from having 70 to just 16 seats in parliament. UNITA‟s poor showing has cast serious doubt over its future as the main opposition party, and its leader, Isaias Samakuva, has indicated that his current term will be his last. Judiciary antiquated and in need of overhaul According to its Constitution, Angola is a parliamentary democracy. It operates through executive, legislative and judicial branches whose separate powers allow for checks and balances among all three. However, in practice, there are still many shortcomings. The Angolan legal system is antiquated, complex and grossly inefficient (cases can drag on for years). The judicial branch remains weak and subordinated to central authorities. Courts are hindered by a lack of qualified personnel, with apparently only around 40% of magistrates holding a law degree. Adoption of new Constitution in January 2010 ensures status quo The new constitution, adopted in 2010, further sharpened the authoritarian character of the regime. In the future, there will be no presidential elections: the president and the vice-president of the political party which comes out strongest in the parliamentary elections automatically become president and vice-president of Angola. Through a variety of mechanisms, the state president controls all the other organs of the state, so that the principle of the division of power is not maintained. 17
SONANGOL: Angola’s de facto Sovereign Wealth Fund Sonangol China This subsidiary was c reated in 2004 and has its head office in Hong Kong. The company's mandate is to procure contracts in the petroleum sector in Asia. Sonangol Cape Verde Owns 36% of Enacol (Empresa Nacional de Combustíveis) that sells petroleum products and gas, and has a network of petrol stations. Financial Sector Millenium BPC (9.9%) Banco BAI (17.5%) Banco BPA (20%) Banco BCI Banco Millenium Angola (49.9%) AAA A financial services firm that offers insurance packages to the petroleum sector. The company also sells short and long term insurance products in Angola. Sonangol Congo Dedicated to down stream services in the oil sector including sales, storage transport and importation of refined petroleum products and has been operating since 1998 Sonangol Ltd UK With offices in London, this office acts as an agency to buy and sell crude and refined petroleum products Sonangol Sonangol Shipping Primarily specialises in the transportation of Crude oil servicing routes between national ports and some African countries including: South Africa, Cape Verde, Camores, DRC, Cote d'Ivoire and São Tomé e Príncipe Sonair Air transport business servicing operators in the petroleum sector; Offers international flights to African destinations and also direct flights for passengers and cargo to the US (Houston express) Sonangol USA Headquatered in Houston Texas, dedicated to the purchase and sale of crude and refined oil products ESSA A services company dedicated to the oil sector offering, training, industrial safety and Food Industry Sonangol owns stakes in Sodispal and WAPO in Angola of 51% and 35% respectively Sonangol Distribution Produces and distributes fuel and lubricants in Angola. Sonasia Headquartered in Singapore and was created in 2004. Deals with the commercialisation of crude oil produced in Asia. MS Telecom Responsible for all telecommunication for Sonangol. The company also owns 25% of Unitel, the largest mobile phone company with over 6m subscribers. Civil Construction Owns a 12.5% stake in Bricomill International Operations GALP Energia - 15% JV with Cuba Petroleo in Blocs N23 and N33 Venezuela - JV with PDVSA (Migas and Melone) Brazil - JV with Petrobras (Campos and Santos bays) About Sonangol Sonangol (Sociedade Nacional de Petróleos de Angola) is, by a sizeable margin, the largest conglomerate in Angola and indeed one of the largest corporate entities in sub-Saharan Africa. Sonangol came into being in 1976 as the company that took over Angola‟s oil assets following their nationalisation on independence and is entirely owned by the Angolan government. The principal activities of the group remain vested in the energy sector where the group is fully vertically integrated in the areas of prospecting, research, development and production in the up-steam activities. Over the years the group has invested heavily in the ancillary down-stream activities which encompass storage, transportation/distribution and refining. In 2008, Sonangol acquired the petroleum refinery, Sonangol Refinaria de Luanda from Total for a reported consideration of US$ 783m. The capacity of the refinery is 30 000 bpd which falls far short of the country´s daily fuel consumption. About 80 000 bpd of refined fuel products are consumed in Luanda on a daily basis, and at roughly US$0.60 per litre, petrol and diesel fuels are some of the cheapest in SSA, and still heavily subsidised by the fiscus. In 2010, we calculate that between US$ 2.5bn and US$ 3bn was spent on fuel subsidies and this remains a point of contention with the IMF. With inadequate and intermittent power delivery in the country, the government is of the opinion that, while they are in favour of a complete removal of subsidies, a short term cut could lead to civil unrest. Certainly, not while the price of oil remains above US$100/barrel ensuring surplus liquidity levels and more so heading into an election year in 2012, even if the outcome is predictable. Sonangol in the energy industry Angola‟s oil production is in the region of 1.7m bpd presently and Sonangol plays a significant role as the country´s concessionary and licensing authority. On average, Sonangol holds at least a 20% stake in each oil block. In January 2011 11 new oil blocks were auctioned (See page 18) and over the next five years, it is anticipated that Angola‟s oil production is expected to increase to between 2.5m bpd and 3.0m bpd, while Sonangol‟s share is expected to increase to some 13% of total output. As the main driver for the multinationals‟ revenues, earnings growth momentum is expected to be driven by enhanced production and higher prices. International diversification In recent years Sonangol expanded their international presence by opening, primarily oil trading offices in Houston, London, Paris, Singapore and Shanghai. This has been complemented by the acquisition of oil assets in Cuba, Venezuela, Iraq, Brazil and the United States. Sonangol also owns a 15% stake in the Portuguese NOC, GALP Energia, via a 45% shareholdings in Amorim Energia, which owns 33.34% of GALP. There is speculation that Sonangol is looking to increase its stake in GALP by purchasing ENI Spa´s 33% shareholding in its ambitions of becoming a super heavy weight MNC. Sonangol continues to be the pre-eminent body through which Angola‟s oil and political agenda is furthered, constantly crossing the business/political divide and effectively acting as a sovereign wealth fund. 18
Page 1 and 2: Angola Imara African Country Cement
Page 3 and 4: Angola Country Map 11a 1 9a a 8 5 2
Page 5 and 6: Executive Summary Comeback post 201
Page 7 and 8: Table 1: Timeline for major policy
Page 9 and 10: Table 3: 2011 Budget and Q1 income/
Page 11 and 12: Constraints to the growth story Ang
Page 13 and 14: US$ Millions US$ per barrel over 10
Page 15 and 16: Chevron also holds a 38.1% interest
Page 17: Italy Although Italy‟s oil intere
Page 21 and 22: Oil Majors in Angola´s Petroleum S
Page 23 and 24: In January 2011, Eni was awarded ri
Page 25 and 26: BAI BFA BESA BPC Banco BIC BESA Ban
Page 27 and 28: Table 9: Regional Banking Comparati
Page 29 and 30: Arguments for and against the devel
Page 31 and 32: Orascom Mobinil TNM Safaricom Econe
Page 33 and 34: Telephonic listings of Angola (ELTA
Page 35 and 36: Millions of Hectolitres NB Delta Cu
Page 37 and 38: Hotels, Tourism and Construction Ov
Page 39 and 40: • Kinaxixi Shopping Center and Of
Page 41: Capital Securities Botswana Ground

Imara African Cement Report Africa, the last cement frontier Angola ...

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