The Republic of Angola’s Special Economic Zone is a major driver of the country’s ambitious diversification programme.
The Southern African country is exploring all options as it branches away from its oil economy and shifts focus to agribusiness, fisheries, food processing and manufacturing, as per the initiatives of the government led by President João Lourenço.
Recently the Minister of Economy and Planning of the Republic of Angola, Mário Caetano João, announced a 3% economic growth in 2023. GDP will average over 3.6% between 2023 and 2027. Interestingly oil sector growth during the forecast period (2023-2027) is only expected to average 1%, while the non-oil sector will grow by 4.6%.
The oil sector remains an important driver of the economy currently, it’s around 27 per cent, representing two-thirds of revenues and about 95 per cent of exports.
The Luanda-Bengo Special Economic Zone leads the way
Leading the charge in non-oil sector development is Angola’s Luanda-Bengo Special Economic Zone (ZEE) run by the recently appointed, Chairman of the Board of Directors, Dr Manuel Francisco Pedro.
The Luanda-Bengo Special Economic Zone, situated in Luanda in the Viana municipality, was created in 2009 to attract investment, help diversify the country’s economy, promote national production, and create jobs.
The ZEE is comprised of two reserves, Viana Reserve and Uala Agro-Industrial Reserve. In the first quarter of 2023, the ZEE reported total revenue of over US$4 million and received 10 new investment projects forecast to bring in some US $60 million, four projects are already in implementation.
“We are working to increase our domestic production, increase exports, generate jobs, and contribute decisively to the economic diversification of the Republic of Angola”.
The ZEE, Angola’s largest industrial area, is home to 166 companies and employs 7 717 people, and the new proposals should create 152 extra jobs.
Countries like; China, Portugal, Eritrea, the United Kingdom, France, Spain, Lebanon, Brazil, India, Cuba, Turkey, and the United Arab Emirates have already set up shop in the ZEE.
And the businesses are just as diverse as the countries, food processing, furniture making, steel and iron production, disposable container and plastic manufacturing and new sectors like cosmetics, automotive, retail and a data centre are coming up.
Dr Pedro says, “We have excellent growth potential at the Zone, the future capacity for factories largely depends on the set-up of the infrastructure. We can accommodate 1600 manufacturing units if the infrastructure is in place. There is still plenty of work ahead of us, which includes our strategic plans to transition from a Special Economic Zone to a Free Trade Zone.
This means redefining some of our core functions so we can continue to support the growth and development of the industrial sector in Angola. We are working to increase our domestic production, increase exports, generate jobs, and contribute decisively to the economic diversification of the Republic of Angola”.
Agribusiness will be the economy’s engine over the next few years, with investment through financing lines from the Development Bank of Angola. In total US $3 billion will be used to position Angola among the main African agricultural producers.”
He adds, “Our attractive business incentives and investment laws support foreign investments. We have a very competitive offering, such as the lowest operational costs in Southern Africa with a reliable electricity supply, potable water, and world-class infrastructure. We are constantly innovating our service offerings, like our ‘Guiché de Apoio ao Investidor’ or ‘Investor Support Office’ (GAI), a one-stop shop for investors within the ZEE.”
Working in the ZEE
Juelma Marques, the Acting Coordinator of the GAI says, “The GAI assists with all business administration needs, from taxes, banking, licensing, to municipal accounts. We launched it in November 2021 and have since received many national and foreign entrepreneurs. We have had a big impact judging by the thousands of requests from companies, investors, and entrepreneurs. Regardless of the branch or core business of a company, the GAI can help with everything they need.”
Businesses based at the ZEE seem to concur with Dr Pedro and Marques assessment of the facilities, just ask António Perdigão, Managing Director at Quinta de Jugais, a meat processing plant. He says, “We have been in Angola since mid-2006, we started with selling imported finished products.
We then decided to expand the business and build a factory for local production. Angola is a large market with enormous growth potential, which merits an investment on this scale. We moved to the ZEE in February 2022. We have over 140 employees and supply 30 tons of charcuterie to the local consumer market, with a capacity for 100 tons a month if the market demands.
The ZEE was the ideal location for our factory as it is strategically located and offers a large modern space with reliable quality infrastructure. This is essential for our company’s growth and services.”
Strengthening logistics and infrastructure
Businesses like Quinta de Jugais can expect even more growth, says Dr Pedro. He explains that another element of their strategic plan includes expanding their service offerings by strengthening logistics.
“Our new logistical service will help facilitate imports and exports at the ZEE, which will be hugely beneficial to our clients. We are very strategically located as we are close to roads, railways, seaports, and the new Angolan airport, which will open later this year.”
The Executive Administrator of the ZEE, Dr Celso Borja, is tasked with restructuring several departments at the ZEE. He says, “The ZEE has some short-term challenges like developing the infrastructure of the four quadrants of the Viana reserve.
Currently, only two of the quadrants have complete infrastructure, but we are developing infrastructure for the other two quadrants. We are busy attracting new investors to optimise our value chain. And we are improving the ZEE’s competitiveness and connectivity while transitioning to a Free Trade Zone.
We are also working on implementing a management cockpit that will allow us to monitor the performance of the process of restructuring the Viana and Uala Reserves.”
Dr Pedro says, “Our focus is growing the agribusiness sector as we have the land. The government and the private sector will work together to build the necessary infrastructure like roads, irrigation systems, and electrification so we can attract more private investment into the agriculture sector.
Agribusiness will be the economy’s engine over the next few years, with investment through financing lines from the Development Bank of Angola. In total US $3 billion will be used to position Angola among the main African agricultural producers.”
INVESTMENT OPPORTUNITIES
The Republic of Angola offers various investment opportunities:
Energy
Angola’s ambitious infrastructure construction plan for the country includes;
- Reaching 9.9 GW of installed generation capacity and a 60% electrification rate by 2025
- Betting on renewable energies, mini-hydro, natural gas for combined cycle and green hydrogen
- Power transmission lines to cover 65% of the country
Agriculture
Angola’s vast tracts of highly fertile land have ample space for the installation of agro-industrial units
Fishing
- About 1200 kilometres of coastline
- Various fish species
- Booming canned fish industry
Manufacturing industry
- Food
- Plastic Packaging
- Tractor assembly
- Automobile assembly
- Assembling telecommunication devices
Extractive Industry
- Angola currently has 36 of the world’s 51 most critical minerals, namely chromium, cobalt, copper, graphite, lead, lithium and nickel, diamonds, gold, neodymium, and praseodymium (used in car batteries)
Telecommunications and related infrastructure
Extending the existing mobile and fibre networks throughout the country
Urban Transportation
- Infrastructure with large investments
- Oil and gas pipelines to Zambia, DRC, and Namibia
- Benguela and Cabinda Refineries
- Deep-water port of Barra do Dande
- Caculo Cabaça hydroelectric dam
- New International Airport of Luanda
- Improvement and maintenance of the country’s road network
FOREIGN DIRECT INVESTMENT IN USD
The top ten countries ranked according to FDI between 2018 and March 2023:
- United Arab Emirates – $351.7 million, 234 projects
- United Kingdom – $283 million, 234 projects
- China – $225 million, 24 projects
- Germany – $ 93.6 million, 4 projects
- France – $ 36.8 million, 3 projects
- Belgium – $ 24.5 million, 2 projects
- Hong Kong – $ 20.5 million, two projects
- Portugal – $19.2 million, 45 projects
- Eritrea – $ 12 million
- Switzerland – $ 10 million
zinc, a noble metal against the corrosion process. It was privatized in 2021. Photo: ZEE
A snapshot of companies at the ZEE
- Candy Factory: This US$35m confectionery factory is a partnership between Oxbow (a food service distributor) and Nelt, the major Serbia-based FMCG distributor. The factory boasts an annual processing capacity of 6700 tonnes, manufacturing gum, sugar confectionery and lollipops with three production lines.
- Galvostahl: The company has two plants, one for galvanizing steel and iron, for use by the energy and telecommunications sector and one for hot-dip galvanizing. Gavostahl was one of the companies privatised under the State Assets Privatization Program (PROPRIV).
- GMST: A 100% Angolan company that provides industrial services transforming pet waste and has a recycling unit. GMST also opened a medical centre offering free services to the community.
- Kaheel Agriculture Angola: Assembles Massey Ferguson brand tractors with an output of 10-15 tractors a day and has an onsite training school.
- Tyo Industries, Lda: Produces soap and toilet soaps under the brand names Diana and Rainha.
Tyo Industries Lda, a factory producing a variety of soaps “Diana” and “Rainha”, sold on the domestic market. With 300 employees, Tyo Industries Lda is able to produce 75 tons of soap and toilet soaps per day. It started in 2018.
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