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Draft Presentation to BNDES ... Unlocking Emerging Opportunities Presentation to UK-Angola Investment Forum – PowerPoint PPT presentation

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  • Unlocking Emerging Opportunities
  • Presentation to UK-Angola Investment Forum
  • May 24, 2012
  • Elio Codato
  • World Bank

Overall Macro Economic Situation
  • In 2011, Angolas overall economic situation
    improved from the immediately preceding years
  • Robust real growth of 4
  • Declining inflation to 11 and exchange rate
  • Overall fiscal surplus increased to 10 of GDP
    with domestic arrears settled
  • International reserves reaching US27 billion,
    equivalent to 6 months of imports
  • Trend is expected to accelerate in 2012 with
    growth forecast to reach 8, helped by increased
    oil output

  • Non-oil sectors are playing an increasing role in
    the countrys economic success story and are
    contributing a higher share of GDP from 45 in
    2008 to 55 in 2011
  • Housing and Transport Infrastructure
  • Ambitious Housing Projects Luanda and
    surrounding areas
  • Rehabilitation/development of Transport
    Infrastructure (roads, railways, bridges,
    airports) to regenerate existing networks and
    develop transport corridors within the country
    and with neighbors
  • Bringing construction and maintenance levels to
    SADC and international standards

  • Agriculture/Agribusiness
  • Second largest sector (after oil and gas) and
    source of income for 60 of the population
  • Estimated 3 million hectares of arable land exist
  • Crops include cassava, beans, sweet potatoes,
    bananas, cotton, rice along with other fruits and
  • Historically, the country was a major world
    exporter of coffee and the potential remains for
    reinvigorating the agriculture sector
  • Potential for forestry and livestock production

  • Telecommunications planned sector liberalization
    and expansion of coverage
  • Power Construction of hydro-electric power
    plants, diesel-fired plants, and use of LNG in
    order to multiply the current capacity from 1000
    MW to 5500 MW in the coming 5 years
  • Water Second most endowed country in Africa in
    terms of water resources but significant
    investments needed to improve access to water in
    both urban and rural areas
  • Mining Full potential to be fully explored but
    proven reserves of diamond, gold, iron,
    phosphate, copper and others

  • Tourism/Hospitality
  • Significant potential for development (coastline,
    system of parks and natural reservations,
    unexplored landscapes)
  • Demand for rehabilitation/development of hotel
    and conference facilities in Luanda and
    surrounding regions
  • Financial and Other Services
  • Banking system includes 23 banks (majority
    privately owned) sector is profitable but there
    is need for new products, services, and
    innovation to promote greater access to bank
  • Insurance and pensions new actors entering the
  • Ongoing need for consulting, legal, and financial
    advisory services

Investment Climate Challenges
  • To unlock the competitiveness of these emerging
    sectors, lessen dependence on oil, and diversify
    the economy, Angola needs to dramatically
    transform its investment climate
  • 2011-2012 Ranking in Global Competitiveness Index
    139 out of 142
  • 2012 Ranking in Trade Logistics Performance Index
    138 out of 155
  • 2012 Ranking in Doing Business Index 172 out of
  • Key Challenges include
  • Infrastructure bottlenecks
  • Low labor productivity
  • Limited access to finance, especially for small
    and medium enterprises
  • Weak governance environment

Doing Business Results
  • Despite progress in certain areas, Angolas
    overall performance on Doing Business remains low
    compared with its peers in the region

Business Perception of Main Constraints
  • According to the 2010 Enterprise Survey
    administered to 479 firms in Angola of all sizes
    and sectors (including informal) the top three
    investment climate constraints were (i)
    Corruption (ii) Access to Land (iii) Access to
  • Percent of Firms Identifying the problem as the
    main obstacle

Government Reform Programs
  • Government recognizes importance of improving the
    investment climate in order to attain its
    diversification and job creation goals
  • Recent reforms include
  • Guichet Unico (Single Window) which has reduced
    time and cost for business start-ups
  • Administrative reforms and IT upgrade which have
    reduced import / export time at the Port of
    Luanda (main port for the country)
  • Establishment of the Central de Riscos de Crédito
    (Credit Risk Bureau) to facilitate access to
    finance by providing updated borrower data to
    finance institutions
  • Government has launched an ambitious Public
    Investment Program to upgrade infrastructure and
    energy access
  • An Enterprise Development Program has been
    announced which aims to promote access to finance
    to SMEs, develop industrial poles, improve
    skills, and create linkages between large
    investments and smaller businesses

Angola Portfolio
  • 5 Active Projects (US461.5 million), 2 Trust
    Funds (US5 million)

New World Bank Group Country Partnership Strategy
  • New Country Partnership Strategy under
    preparation covering 2013-2016
  • Strategy will have two main pillars and a
    foundation as follows
  • Pillar One Deepening Diversification for
    Inclusive Growth
  • Pillar Two Enhancing the Quality of
    Decentralized Service Delivery
  • Foundation Building Human Capacity and
    Institutions and Deepening Social Protection
  • Strategy will bring together all institutions in
    the World Bank Group, including
  • International Finance Corporation (IFC) to
    catalyze investments and support business
    environment reforms
  • Multilateral Investment Guarantee Agency (MIGA)
    to facilitate foreign investments
  • World Bank Institute (WBI) to provide training
    and capacity development
  • Strategy will focus on knowledge transfer and
    developing partnerships with donors, civil
    society, and the private sector

Summary Conclusions
  • Angola presents a unique and exciting set of
    business prospects across a range of industries
  • The country continues on a solid growth
    trajectory with clear Government commitment for
    maintaining macro-economic stability
  • To unlock the many potential opportunities,
    significant reforms have to be undertaken at the
    policy and institutional levels which should be
    coupled with progress in physical infrastructure
    and human capital
  • The World Bank is ready to do its part to help
    Angola attain its stated social and economic
    development goals
  • The World Bank believes the private sector has an
    essential role in promoting lasting, broad-based,
    and sustainable growth through responsible
    business investments

  • Thank you!
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