The ‘Unwritten Law’ Of Doing Business In Oil-Rich Angola
Since the end of a nearly three-decade long civil war, Angola, a country of 20 million people, has grown at a spectacular rate to become Africa’s fifth largest economy and one of the most attractive investment destination on the continent.
This impressive average growth rate of 11 percent over the past decade, however, masks a rather authoritarian rule by the country’s 72 years old President José Eduardo dos Santos, who many analysts feel has done little to encourage foreign investors into other sectors of the economy other than the country’s cash-cow — oil and gas.
According to Ron Derby, an editor at Financial Mail, no one can do business in the oil rich country without the blessing or partnering with the ruling family in Angola and in particular with the Africa’s richest woman, Isabel dos Santos, the eldest daughter of President Dos Santos.
“That’s just one of many “unwritten laws” of doing business in the oil-rich state,” Derby said in his opinion piece.
But even if an investors gets the family’s blessing and successfully enters the Angolan market, they will have to find a way to manage another problem in the form of the Presidents advanced age.
” Succession politics”
Succession politics has taken center stage in the country in the last few years and any instance of power change could leave any investor who made deals with the Dos Santos exposed to extortion from the new ruling elite.
Angola is known for being one of the corrupt countries on the continent.
” If a corporate enters that country with the blessing of the first family … they could find themselves on the wrong side of the divide when the political winds change,” Derby said.
With the country’s top revenue earner oil suffering from falling prices on the international market, President Dos Santos, who is one of the longest serving ruler in Africa, might now consider diversifying the economy to other sectors.
The telecoms sector is slowly being opened up to investors, but there is a catch. Any investment in the sector has to have Isabel has one of the major shareholders.
She is already the largest shareholder in Unitel SA, the leading mobile phone operator in Angola with about 75 percent of the market.