Africa Market Update - April 2015

MARKET UPDATE – AFRICA | March 2015
BUSINESS ENVIRONMENT
POLITICAL OUTLOOK
Judicial Reforms: Will they fit the Bill?
Judicial reforms are set to commence in the
course of the first half of 2015 with a view to
strengthening adherence to human rights
and address delayed judgement of cases.
Agriculture to Shape Business Focus
As the country grapples with depressed oil prices, investors
are likely to shift focus to sectors driving economic diversification.
Agriculture presents a lucrative sector as the country
looks to address a high food import bill.
Agriculture as % of GDP
Source: EcoBank Update, StratLink Africa
Angola’s agricultural productivity stands below that of peer
economies in Sub-Saharan Africa and could present a viable
investment opportunity given high population growth rate
(3.1% per annum as at 2013 11 ). Between 2000 and 2010,
Angola’s cereal yield per hectare accelerated at 60.0 bps
slower than the Sub-Saharan Africa average at 12.5%.
Cereal Yield (Kg/Hectare)
‘00 ‘10 Variance
In November 2014, Amnesty International
accused security forces of stifling dissent
against the government and extra-judicial
killings. This points to an environment of
constrained democratic freedom that is
bound to negatively impact the country’s
political risk perception amongst investors.
Constitution: Teething Questions
Despite a stable political environment since
2002 and adoption of a new constitution in
2010, a number of factors are likely to keep
the country’s political climate fragile in the
coming years. One, incumbent President,
Jose Eduardo dos Santos, has been at the
helm since 1979 with the new constitution
having allowed him to seek another five
year term in 2012.
Likely Groundswell of Discontent
In the run-up to the next election (2017),
the opposition is likely to capitalize on the
incumbent’s prolonged reign in eliciting
public discontent and clamour for change.
Coupled with a deteriorating economic
environment occasioned by the plunge
in oil prices, the government risks facing
a groundswell of dissatisfaction from the
masses between 2015 and 2016.
Ruling MPLA saw its margin of victory in the
last elections decrease as the main opposition
party, UNITA, managed to increase its
share of votes cast.
Election History: Percentage of Votes
‘08 ‘12
MPLA 81.6% 71.8%
UNITA 10.4% 18.7%
Others 8.0% 9.5%
Source: FES Policy Analysis, StratLink Africa
South Africa 2,755.0 4,162.0 16.8%
Malawi 1,676.0 2,206.0 14.6%
Zambia 1,682.0 2,547.0 16.8%
Kenya 1,375.0 1,613.0 13.0%
SSA Average 1,131.0 1,336.0 13.1%
Angola 572.0 644.0 12.5%
11 World Bank Estimates 2014
Source: World Bank, StratLink Africa
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