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Rise of retail making Angola a big pull

Article - August 1, 2014
Retail companies are enjoying tremendous growth in Angola and the sector is only expected continue growing with investment in education of the workforce
OIL PRODUCTION IS HUGE FOR THE ANGOLAN ECONOMY BUT THE RETAIL INDUSTRY HAS ENJOYED HUGE GROWTH OVER THE LAST DECADE THANKS TO A PUSH BY THE ANGOLAN GOVERNMENT TO DIVERSIFY THROUGH PUBLIC-PRIVATE PARTNERSHIPS
Since the birth of Angola as a unified nation, the country has become an increasingly attractive place to invest, with the retail industry growing tremendously over the course of the last decade.
Though the economy remains heavily reliant on oil production, there is a significant push to diversify public-private partnership programs, government investment in infrastructure and education, and legislation that favors the growth of the retail industry.
There is a push for more manufacturing in Angola, liberalized exports, and more sales to consumers. If the success of some foreign investors is any indication, these initiatives are having an effect.

Rosa Escórcio Pacavira de Matos, Angola’s Minister of Commerce, describes Angola as, “A country that is going global and has opened its doors to foreign investors.” She urges those looking to invest in Angola to begin by researching the relevant Angolan legislation to ensure that it is favorable for their particular industry, and then to look for local business partners.

Angolan Secretary of State of Industry Kiala Gabriel stresses the significance of economic diversification. “I don’t know any rich country other than an industrialized one,” said Mr. Gabriel, adding that Angola is focused on bolstering the manufacturing industry to eventually account for between 15-20% of its economy. The goal is still a way off but a lot of the progress being made in Angola may culminate in the aims eventually becoming a reality.

Casacon is a retail company that has flourished in Angola. As one of the largest retailers in the country, Casacon operates five shops, each consisting of four different departments.

THERE IS A PUSH FOR MORE MANUFACTURING IN ANGOLA, LIBERALIZED EXPORTS, AND MORE SALES TO CONSUMERS. IF THE SUCCESS OF SOME FOREIGN INVESTORS IS ANY INDICATION, THESE ARE HAVING AN EFFECT.
The shops are located in various provinces across the country, each one selling construction materials, home goods, electronics, and sporting goods. The largest of Casacon’s five locations is in the capital, Luanda.

The company opened one year after the end of the Angolan Civil War, which means they are currently celebrating their 11th year in business. Renata Carvalho is the company’s General Director. “We’re proud of being a retail leader for 11 years now,” Mrs. Carvalho says. “We offer more than 300 active brands for a total of more than 15,000 registered items,” she continued. “We attend around 1,000 customers a day during the week, 2,000 on Saturdays, and around 500 on Sundays.”

Last year Casacon launched an online shopping platform. “With its official launch, we won an important award for our contribution to the development of the online market, already quite developed outside of Angola,” Carvalho says.

The company has also been recognized for its actions in social responsibility. The General Director of Casacon says, “This type of recognition of our work makes us want to keep on moving forward.”

Semec is an import-export company and yet another example of someone who invested in Angola and came out on top. The company’s founder and CEO, Sergio Cubo, says he chose to invest in Angola because, “I noticed that it was a country with great potential.”

Sergio Cubo, CEO of import-export company Semec
At the time he worked for a Portuguese company that was struggling in Europe. Mr. Cubo says he moved his hub to Angola with modest expectations. Eventually he separated from his old company to found Semec, seeing opportunities for growth in Angola. While he’s faced a lot of challenges, he also learned the ropes and established his company as one of the top five of its kind in Angola and Semec has since experienced huge growth. “I started here with four employees,” Mr. Cubo said. “Today I have 20.”

Mr. Cubo is concerned about the challenges of expanding his staff, however. “We are experiencing a difficult stage in the development of the country, with people that still carry a lot of the frailties that resulted from the lack of education and training during the war period.” But while it can be a challenge to find skilled labor, Mr. Cubo is hopeful that as younger generations come of age, filled with Angolans who were able to be educated in the last decade, “things will improve immensely in all sectors.”

The government is working on addressing the shortage of educated workers. “The government has prioritized investing in education,” says Ms. Pacavira, ensuring workers have the technical and professional training needed to “meet the goals of economic diversification that are intended for the country.”

That isn’t the only challenge. Semec has also had to navigate problems that result from Angola’s less than optimal infrastructure. “Most times, moving cargo is difficult because of Luanda’s typical traffic congestion and poor condition of the roads; resources are scarce and working here requires a lot of heart and a lot of determination,” Mr. Cubo says.

Mr. Gabriel agrees that this is a problem. “We are a country that is still trying to equip itself with infrastructure through the construction, rehabilitation and modernization of key sectors.” He says they are particularly focused on improving “roads, railways, ports, power, water, airports and waterways of productive areas,” that connect to distribution centers.

Casacon’s Mrs. Carvalho says the impact of these changes is already apparent. “One can easily feel the political will of the government,” she said, and added that “with the construction of infrastructures that will support the industry and the construction of industrial centers. I believe that within five years we’ll witness a totally different Angola than the current one.”

Mr. Gabriel says, “It is true that for the U.S., Angola exports only oil, but we are building capacity so that we can export other products, these conditions have to do with the certification and labeling of our products.” The National Institute for Exports has been created to tackle challenges like these and should ultimately liberalize trade with Angola, broadening opportunities for investors.

And investors seem to be taking note, creating a competitive environment in Luanda. “In reality there is a lot of competition in terms of products and companies,” Mr. Cubo says. “You need to be highly professional to work in Luanda because the customers are already very demanding.” Mr. Cubo is optimistic. “Africa and Angola in particular, is an excellent destination for investment at this moment,” he added. “In general, Africa is a fertile ground for any business.”

Mr. Gabriel agrees that despite the challenges, he hopes Americans will invest in the country because, “they have much to gain. We have an unlimited number of business opportunities,” he said. The workforce, he added, is “affable and friendly,” and constantly making gains in terms of education.

Next year Casacon has plans to begin constructing a shopping mall. “The idea is to keep evolving, just as our country is,” says Mrs. Carvalho, “this country is an extremely interesting place to live, to work, and to gain experiences while helping it grow.”

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