Luanda-São Paulo route increasingly important for both countries

20 April 2009

Luanda, Angola, 20 Apr – Indifferent to the negative global economic situation, business between Angola and Brazil had its best ever year in 2008 and continues to intensify, with new opportunities opening up in bio-fuels and agri-business.

Of the most recent trade figures between the two countries, the growth in the value of Angolan exports to Brazil is particularly noteworthy – 8.35 percent, to over US$76 million in the first half of the year.

As regards petroleum products, the increase is down to greater quantities, given that prices for these commodities have been falling.

According to Brazil’s Ministry for Industrial Development and Overseas Trade, in 2008 Angola managed to export more to Brazil (US$2.24 billion, more than double the 2007 figure) than it imported (US$1.97 billion).

Portugal continues to be the biggest exporter to Angola (2.27 billion Euros in 2008), though the fact that imports from the former colony were around 408 million Euros means that the trade balance between Angola and Brazil is greater (US$4.21 billion), having increased six-fold since 2004.

Today the weight of this transatlantic trade balance is bettered only by the Sino-Angolan trade balance (US$23.5 billion, US$22.3 billion of which is Angolan exports.)

In the first two months of the year, Brazilian exports to Angola rose 36.7 percent, to US$280.5 million, while the total received by the Ministry of Overseas Trade fell by nearly 15 percent.

Brazilian businesspeople already have an association in Angola, Aebran, the president of which, Alberto Ésper recently told local press that direct funding from Brazil for Angolan projects stood in the region of US$2 billion last year.

The growth in business has benefitted from a credit line of US$1.75 billion, via Brazil’s Banco Nacional de Desenvolvimento Económico e Social (BNDES) and also from funding from the Program for Export Funding (Proex), managed by the Banco do Brasil.

“Construction is the sector in which there is the most notable and most visible participation by Brazilian companies in Angola. However, we should note that today Brazilians are in a wide range of areas within the Angolan economy, such as agriculture, trade, health, education, training and technology,” said Ésper, quoted by newspaper, O País.

Aebran estimates that there are currently 25,000 Brazilians in Angola, and at least 200 companies controlled by Brazilian capital.

As big groups such as oil company, Petrobras and Odebrecht have set up in Angola, it is possible to eat a Mister Sheik “kibe” in Luanda or learn ICT at the Brazilian BIT Company.

For Ricardo Camargo, executive director of the Brazilian Franchising Association (ABF), “Angola seems to have found favour with Brazilian investors, franchise owners from different sectors of the economy.”

Petrobras recently allocated five percent of its investment forecast for 2009-2013 to Angola, close to US$800 million, practically the same amount Odebrecht intends to invest in the country over the next few years.

Emílio Odebrecht, the group’s president, recently met with Angolan president, José Eduardo dos Santos, to analyse future projects, taking into consideration the government’s priorities.

In partnership with private Angolan group, Damer and state-owned oil company, Sonangol, Odebrecht has a stake in Angolan bio-energy company, Biocom, which is to invest in sugar-cane planting and the building of a factory to produce the sugar, ethanol and bio-electricity in Malanje province.

Investment is expected to be around US$258 million and the project will cover a 30,000 hectare area by 2012.

The entire structure of Angola’s agriculture and livestock research, a sector for which the country is known to have great potential, is currently being reviewed with the support of Brazilian Agri-livestock Research Company (Embrapa).

The project, which will last until 2013, has investment from the Angolan Government of US$7.3 million (5.5 million Euros), to be used to set up 14 research centres.

Taking into account the increasing flow of companies, workers and as well as tourists, Angolan airline Taag is increasing the frequency of its flights to major Brazilian cities.

As of 2 May there will be seven flights, five to Rio de Janeiro and two to Sao Paulo, a significant boost while it is banned from flying to Europe. (macauhub)