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Angola Today

Angola Today é o blog de www.kumbuja.com, o site de compra e venda líder em Angola.

Top 5 Keys to start a business in Angola

por Kumbuja, em 08.02.15

Angola has become one of the most interesting countries to do business in sub-Saharan Africa. Only 12 years ago, on February 22, 2002 , the assassination of Jonas Savimbi (Leader of UNITA, main opposition party) put an end to 27 years of civil war in Angola , ensuring the long-awaited peace and leaving a country in need (and desire) of everything. Key infrastructure had been destroyed, and so was the industrial sector, except for the oil sector. Since then, it began a process of rebuilding the country and unparalleled economic growth, mainly driven by the vast natural wealth of the country (mainly oil, but also diamonds, minerals, timber and other natural resources)..

 

High costs in money and time

 

Barriers to free trade and speculation have led Luanda to be named the most expensive city in the world to live. Foreign entrepreneurs who decide to visit the country should be aware that hotel rooms cost around $400 USD per night, renting a car with a driver (must) will be $140 USD a day, and a business dinner will not cost less than $70 USD per person. Costs will not only be monetary, but also in time. As you leave the airport towards the hotel, you will find the infamous “engarrafamento ” (traffic jam) all over the city , which slows down dramatically all daily commuting.

 

Attention to safety

 

As in any country where there is social inequality, security is a matter of utmost importance. We must try not to look like a typical newcomer, avoid sensitive areas, exercise caution at night, always try to be accompanied, have a trusted driver to take you from door to door, do not seem ostentatious, etc. Also, make sure to comply at all times with the rules, and carry a certified photocopy of your passport as well as your visa, to avoid problems with the police.

 

Difficulties in obtaining high-level interviews

 

Keep in mind that local businessmen are mostly informal, and it is not easy to set up meetings with people who have the ability to make the final decision. This point is even more complicated if the client is the government or when going after public tenders. Bureaucracy is extremely complicated (but getting better every day) and often lengthen the negotiation, contracting, implementation and payment processes.

 

Logistics and customs barriers

 

You will always work with FOB and CIF prices, and unless you know a good shipper (who will charge around 2% of the CIF value of the goods), never run the risk of customs formalities and delivery at customer’s warehouse. Customs in Angola are a completely opaque world, full of obstacles, and endless documentation requirements to provide that if it contains a minor error further delays the process a fair deal. Once past customs clearance, and especially if the customer’s warehouse is located outside Luanda, the whole series of difficulties for safe deliveries arises: bad roads, traffic, damage to goods in transport, theft, etc.

 

Getting paid

Getting paid for your work is also subject to surprises, and we must always demand the best guarantees and use secure payment instruments. It is common practice in the implementation of projects (not product sales) to receive a down payment to start its implementation, and it is essential to use irrevocable and confirmed letters of credit to ensure the reception of promised amounts. Large importers and distributors, although depending on the sector, often work with payment at the reception of shipping documents or with 30 – 60 days credit.

 

You should also pay attention and even "imitate" other business that have succeeded in this country, here you can find two of the best examples in Angola:

 

 

 

 

 

 

 

 

 

 

 

 

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