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

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Improving sovereign credit risk will pave the way for the issuance of international bonds in the near future, and eventually the creation of a local equities market. Banking sector set to expand with new Energy sector legislation The licensing of South Africa‟s Standard Bank in December 2010 marked the first steps towards the deepening of the banking sector and the development of a more competitive environment in order to improve the product offering, efficiency and quality of service. Standard Bank is the first Anglophone bank licensed to operate in the country, and as Africa‟s largest bank (with a significant Chinese shareholder), access to international capital markets should lower the cost of debt funding for Angolan companies. New legislation requiring all international oil majors to process all receipts and payments through the domestic banking sector is on the cards and has the potential to at least double the size of the banking assets, currently at circa US$45bn. This will boost revenues for players in the local banking sector and increase tradability of the Kwanza, which is in line with stated policy initiatives. Other areas that will grow in the financial sector include retail banking (with market penetration at a mere 10%), micro-finance, for which new legislation has just been published, short term insurance, which is now compulsory for vehicles, and the long awaited launch of the equities market. Stable political outlook and increasing international influence Following the changes made to the constitution in January 2010, with a current parliamentary majority of 82% and a weak and fragmented opposition, the MPLA is assured of victory in the forthcoming 2012 general elections. According to the new constitution, voters are now required to vote for a political party rather than a presidential candidate. Consequently, no changes are envisaged to the status quo and political stability should be maintained. Through the African Union, CPLP and SADC, Angola was particularly critical of NATO‟s role in the deposition of Libya‟s Muamar Gadaffi and is playing an increasingly important role in regional conflict resolution. Cote d‟Ivoire, DRC, Madagascar and Zimbabwe are hot political spots in which Angola is playing a diplomatic role. More spatially Angola‟s oil diplomacy has been extended to Cameroon, South Sudan, East Timor, Namibia, Equatorial Guinea, Cape Verde, Liberia and Iraq among others. Coincidentally and unsurprisingly, the large majority of these countries are known to have petroleum reserves and there is no doubting, Angola‟s continued increasing stature in global geopolitics. Commencement of gas production in 2012 will see US taking China over as the largest trade partner The commencement of gas exports to the US and Europe 2012, will further buttress the country‟s balance sheet. Enhanced gas export revenues should tilt the scales in favour of the United States, which should overtake China as the largest trade partner (US$11.2bn in 2009, WTO). With proven technology enhancements in Blocks 18, Angola possesses one of the most sophisticated ultra-deep water petroleum extraction industries in the world, after Brazil. With the licensing of 11 new oil blocks in the eastern Atlantic waters, to the south of existing extraction activities (Figure 15), the focus on developing the country‟s deep water pre-salt oil deposits has been intensified. Conclusion: Poised for yet another decade of growth Already one of Africa‟s richest developing countries, the stage has been set to usher in yet another decade of aggressive growth, from a high base (in an African context). The preponderant focus continues to be on the energy sector, where Sonangol runs a very tight ship. The non-oil sector is growing at a faster rate, however, from a lower base, it will take a while to reduce the country‟s dependence on the energy sector. Obstacles to the strategic thrust are numerous and varied and include the poor legislative environment, poor infrastructure, a weak human resources base, water and power problems, which all contribute to making Angola one of the most expensive and inefficient places in which to do business. Not least is the legacy (and culture) of vested interests, nepotism and hegemony structures which pervade virtually every aspect of Angolan life, and ensure a less than level playing field. There is a growing acceptance that the private sector needs to play a greater role if the growth momentum is to be maintained, however, and Angola is now on its way to opening up to foreign investors. Certainly, this will go a long way in job creation and the improvement in living standards for the lower echelons of the society, who have yet to benefit from the country‟s wealth. Angola remains one of the most dynamic of Africa‟s emerging markets, and the most credible candidate to deliver on the abundant, pent up potential, to the benefit of Angolans and Africa as a whole. 5
Table 1: Timeline for major policy changes Jan-09 Feb-09 Mar-09 Apr-09 AKZ75 :US$1 AKZ75 :US$1 AKZ75 :US$1 AKZ75 :US$1 Car insurance is made compulsory 2008 Budget statement approved 2008 Budget surplus of US$6.4bn recorded May-09 Jun-09 Jul-09 Aug-09 AKZ75 :US$1 AKZ75 :US$1 AKZ76 :US$1 AKZ77 :US$1 Gvt approves revised 2009 budget Circulation tax introduced in luanda AKZ4,971bn (22% contraction) Council of Ministers approves €1bn line of credit from Portugal IMF team invited to review current economic situation Payment of civil service salaries extended to other banks Sep-09 Oct-09 Nov-09 Dec-09 AKZ78 :US$1 AKZ78 :US$1 AKZ85 :US$1 AKZ88 :US$1 €500m line of credit signed with Spain US and Angola sign a technical assistance agreement US$1.4bn Stand by facility signed with the IMF US$137m fraud unveiled at BNA and Ministry of Finance implicated Jan-10 Feb-10 Mar-10 Apr-10 AKZ89 :US$1 AKZ90 :US$1 AKZ91 :US$1 AKZ93 :US$1 New Minister of Finance appointed New rules governing procurement of goods and services implemented New Angolan Constitution approved by the National Assembly Portuguese Finance minister visits and agrees payment plan for arrears Sonangol´s 2008 Results published, US$3.5bn profit May-10 Jun-10 Jul-10 Aug-10 AKZ93 :US$1 AKZ92 :US$1 AKZ93 :US$1 AKZ93 :US$1 Fitch and S&P award Angola B+ rating on par with Nigeria and Kenya Japan Bank for International Cooperation (JBIC) visits 2010 Budget revised up by 37.1% to US$43bn New Angolan constitution ratified Sep-10 Oct-10 Nov-10 Dec-10 AKZ93 :US$1 AKZ93 :US$1 AKZ93 :US$1 AKZ93 :US$1 Fuel subsidies reduced by 20% to circa US$3.8bn 8 other commercal banks allowed to pay government salaries Petrol and diesel prices increased to 65USc and 43USc per litre respectively BPA, BAI, BANC, BIC, BFA, BESA, BCA, SOL JBIC invests US$270m in textile factory. This is their first investment into Angola Jan-11 Feb-11 Mar-11 Apr-11 AKZ 93 :US$ 1 AKZ 93 :US$ 2 AKZ 93 :US$ 1 AKZ 93 :US$ 1 Capital Markets Commission undergoes Tax reform process started New Private investment law passed; restructuring BNA appoints audit council Investment threshold increased to US$1m Russian Banks sign US$280m deal to finance BNA defines new parameters banning the Angolan comms satellite issuance of short term loans in US$ May-11 Jun-11 Jul-11 Aug-11 AKZ 93 :US$ 1 AKZ 93 :US$ 1 AKZ 93 :US$ 1 AKZ 93 :US$ 1 Civil servants salaries increased by 40% for lower ranks and 25% for skilled personnel S&P raises Angola's credit rating to BB- from B+ US$500m extended to small and medium scale farmers by BDA Angola assumes chairmanship of Afeximbank New Micro-Finance law published by BNA Sep-11 Oct-11 Nov-11 Dec-11 AKZ94.10 :US$1 AKZ94.90 :US$1 AKZ94.90 :US$1 AKZ94.90 :US$1 New Mining law passed published by the National Assembly 2012 National budget presented to National Assembly - total income and expenses amount of AKZ4.42bn (US$46.6bn) President announces that Parliamentary elections will be held in Q3 2012 Micro, Small and Medium Businesses law published 6
Page 1 and 2: Angola Imara African Country Cement
Page 3 and 4: Angola Country Map 11a 1 9a a 8 5 2
Page 5: Executive Summary Comeback post 201
Page 9 and 10: Table 3: 2011 Budget and Q1 income/
Page 11 and 12: Constraints to the growth story Ang
Page 13 and 14: US$ Millions US$ per barrel over 10
Page 15 and 16: Chevron also holds a 38.1% interest
Page 17 and 18: Italy Although Italy‟s oil intere
Page 19 and 20: SONANGOL: Angola’s de facto Sover
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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