Investors in Angola need to cover own needs for qualified workforce, specialists warn

11 February 2008

Lisbon, Portugal, 11 Feb – The lack of qualified workers in Angola, which have been absorbed by the mining, oil and financial sectors, forces investors to cover their own specific needs, namely through training plans, before entering the market, specialists have warned.

“The number of Angolans that leave university with their studies completed each year does not yet meet the needs of the market and this is a vital issue. We are confident, however that this deficit will be significantly reduced within the next five or six years,” said João Martins Tojo, senior consultant for KPMG Angola, in a supplement on Angola published with Portuguese financial daily Diário Económico.

The issue has been the focus of several Angolan economic researchers, with some saying that the lack of qualified workers could affect the non-oil economy’s growth targets. Concerned with this situation, the Angolan government has been speeding up approval of higher education establishments all over the country.

“”Although there are many qualified Angolans, they are simply not in enough numbers due to expansion of the market, and those that there are are captured by the strongest sectors, mainly oil and the financial markets,” said the consultant.

This opinion is shared by Emídio Pinheiro, chairman of Banco Fomento Angola, of Portuguese banking group BPI, which is currently one of the country’s leaders in private banking.

“Although there are serious limitations in terms of training staff, we don’t hesitate to offer opportunities,” hiring and training on the job, Pinheiro said.

He added that around 65 percent of workers at the private bank had university degrees.

“The appropriate approach is to come to this country with experience and determination, and, of course, bringing the best directive staff a company has, because it is a demanding market in terms of management skills. Generally, when you have those skills, the experience goes well,” Pinheiro said in the Diário Económico supplement.

Carlso Bayan Ferreira, chairman of the Portugal-Angola Chamber of Commerce and Industry, said that the lack of training for workers was the “most acute” problem facing the Angolan economy.

“However, any lack is converted into an opportunity in Angola, and this factor is no exception. Companies and institutions dedicated to training human resources have a very interesting market in Angola, as there is an urgent need to be met there,” said the Portuguese manager, a director of Galp Energia, in the supplement.

He also pointed to the lack of infrastructure as a weakness, but also an opportunity for Angolan and international companies.

“This deficit could be interpreted in terms of opportunity for companies in that area. An area in which, despite the Chinese presence, Portugal continues to be responsible for the most significant construction projects, such as Sonangol’s headquarters, a project built by the consortium made up of Soares da Costa and Mota-Engil,” said Bayan Ferreira.

Another recommendation from the specialists to investors interested in the Angolan market was to partner with local agents.

“Although it is not mandatory to invest in this way, it continues to be the best way for a company to adapt to the Angolan market and obtain support, from both governments and from financial institutions of both countries. This allows companies to see their investments from a medium and long-term perspective,” Bayan Ferreira said.

According to him it is important for investors to bring “a long term project” with them as the difficulties – in terms of infrastructures and public administration – “require a certain amount of patience.”

“Angola is a rich country and this brings with it some settling certainties. It has no serious financial problems, as proven by the fact that it questions the conditions of the World Bank and the International Monetary Fund (IMF), when it considers it convenient to do so. It has international autonomy that is not absolute, but it is significant. Monetary reserves in 2007 totaled around US$12 billion. This is a guarantee when doing business in Angola, especially in terms of payments and this is a distinguishing factor for Angola in relation to other African countries,” said Bayan Ferreira.

Paul de Sousa, chairman of KPMG Angola, said that Portugal and Brazil have the strategic advantage of sharing a language with Angola.

“The best way of entering the Angolan market is to go into partnership with an Angolan ally. Therefore, setting up those partnerships is potentially much simpler when there is a common language,” said the analyst, who said he believes that the Portuguese are best positioned to deal with the market.

“Even though there are some historical issues that in some cases could be a con, the balance is enormously favorable towards the Portuguese in terms of cultural and linguistic links to Angola. There just needs to be humility and pragmatism in that relationship,” de Sousa said.

In terms of the advantages of betting on Angola – which this year is at the top of world economic growth forecasts – the analysts are also in agreement.

“There is no doubt that Angola is full of opportunities, and there are very significant incentives available from the government to whoever want to set up in the country, particularly in some priority sectors. In Luanda you can benefit from tax exemption for an 8-year period. In other provinces that exemption can last for up to 15 year, which is a very significant attraction,” de Sousa said.

“It is obvious, however, that it is not any easy place to do business and that there are logistic and bureaucratic difficulties,” he said, “it is also true that the potential is immense.”

For the fourth consecutive year, the Angolan economy grew in 2007 above the average for the Southern Africa Development Community (SADC), driven by private and public investment, particularly oil production and diamond mining.

Bayan Ferreira said he thought Angola was a potential economic powerhouse, which was beginning to show its capabilities also as a foreign investor.

“You can already see Angola’s potential in internationalizing its own companies, as is the case of Sonangol, which is already a stakeholder of important Portuguese financial and energy companies. Over the next 20 years, Angola will be an example of growth to the world. It will be unstoppable,” the Portuguese manager said. (macauhub)

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