Expansion of population and wealth in Angola attracts retail trade

2 December 2013

Angola is one of the most attractive markets for international retail trade, due to the significant expansion of the population and the average income, according to the Economist Intelligence Unit (EIU).

The latest company to announce plans to enter the Angolan market was South Africa’s spar, following the example of other South African groups, as well as from Portugal and Brazil, the EIU said in its latest report on Angola.

“Together with the growth of available income and development of the middle class, the retail market is expected to see an increasing move away from informal routes,” such as street markets and sellers, the British analysts wrote.

Real GDP, the EIU noted, has grown every year since 1994 and in eight of those years posted two-figure growth.

The age profile is also “very promising” as in 2010 around half of the population was younger than 24. This proportion is expected to remain high over the next few years, “offering retailers clear long-term opportunities for expanding and building brand loyalty,” said the EIU.

Already in the Angolan market is South Africa’s Shoprite, after Brazil’s Odebrecht was called up by the government for a partnership in the logistics management of state chain Nosso Super.

The Angolan government has been focusing on a strategy to formalise the non-oil economy, most of which is unregulated, with a view to improving quality, expanding competition and creating jobs, as well as improving tax revenues.

Logistics is one of the areas of greatest difficulty, particularly due to congestion of ports and road, but the EIU also warned of general problems with infrastructure and bureaucracy amongst other things.

The EIU forecasts that the Angolan economy will post growth of over 6 percent per year until 2018, reaching 6.8 percent in 2013 and 7 percent in 2015.

The biggest driver of GDP in the next few years is expected to come from public and private consumption, according to the EIU’s projections.

Oil production is expected to grow continuously over the next five years and exports are expected to exceed US$80 billion in 2015. (macauhub)