Botswana Investment and Trade Centre (BITC) has urged local businesses to take advantage of the African markets particularly in Angola and Zambia. Giving a presentation at the BITC Trade Portal Launch in Francistown last week the Business Analyst (Strategy and Competitiveness) at BITC, Kabo Sebele, said that Angola has the third largest economy in Sub Saharan Africa.
“In 2000, Angola’s economy was 1.7 times the size of Botswana and by 2020 it will be over eight times the size. The country is very dependent on oil but generally the country has a strong economic growth,” he said.
He however said that the Gross Domestic Product (GDP), revenues and exports in Angola have unfortunately been down in recent years as a result of low oil prices. He said such a challenge has created liquidity problems for companies in Angola with some foreign payments taking up to six months to process. On a positive note, Sebele said expectations are that the economy will recover in 2016 and show good growth to 2020. Presenting on the basic economic conditions in Angola, he said the country has fertile soil and favorable climate providing an attractive opportunity to invest in agriculture.
“The ongoing upgrading of infrastructure in Angola should provide a boost for economic competitiveness and long term growth, Slow economic growth will become the new normal in Angola over the next three to five years as oil prices experience gradual recovery and long term growth will improve as the structural changes begin to encourage stronger levels of inward investment and greater diversity of exports,” he added.
Sebele also said what is also interesting is that Angola is planning to build Africa’s largest shipping terminal and will be able to challenge South Africa and Namibia as a Regional Hub for landlocked countries.
“The establishment of a stock, secondary debt and futures and commodities market will expand access to capital in the medium term. Operational risk is largely driven by complicated and costly trade procedures to import and export goods. Angola offers both high returns and high risks to investors and trade partners,” Sebele said.
Touching on trade analysis he said that Angola remains a highly import dependent country with very little being manufactured locally and has experienced large trade flows in the past decade. Sebele said imports in Angola have continued to rise reaching US$25.5 billion in 2014, roughly 67 percent higher than the US$15 billion recorded in 2010. Put in context he said Angola’s imports were 60 percent larger than Botswana’s GDP in 2014.
“It is highly likely that Angola will remain import dependent for many years to come as local capacity can meet only a fraction of demand in virtual sectors. Exceptions to this are cement, beer and basic foods. Botswana currently accounts for a very small portion of exports to Angola which is less than 0.01 percent,” he said.
He said the key imports into Angola include among others oil and gas. He also said food, beverages, clothing, building materials and construction inputs as well as automotive sector products are also all imported in large numbers. He further said that there is an increasing level of agricultural produce being imported in Angola as well.
“Household accessories, cleaning products, perfumes and cosmetics are all in high demand in key cities. If you can import it you can sell it,” Sebele said.
Some of the countries that already export to Angola include China, Portugal, Brazil, South Africa and Namibia. However according to Sebele exports from Botswana are tiny as they amount only to US$2million. He said much of it appears to be re-exports being cigarettes, packaging materials and vehicles.
“However there is some beef entering Angola from Botswana. It already has a good reputation in the market although volumes are still very small,” he added.
He also said the major market is for frozen boneless beef which Botswana is not currently supplying. He said there is definitely room for expansion of meat and related exports based on feedback from importers. The BITC assisted companies exporting to Angola include, Benson Craig (Proprietary Limited) Botswana Meat Commission (BMC), Botswana Vaccine Institute (BVI)Estamok Freight and Twinco.
Similarly, Sebele said Zambia also provides market opportunity for Botswana businessmen to exploit as it is one of the fastest growing economies in the world and is amongst the four fastest in Africa. He said in 2014, Zambia’s GDP was US$26.8billion which is about the same size as the economy of Uganda and almost double the size of the economy of Botswana.
Among other important issues he said Zambia’s targeted foreign investment strategy has attracted the attention of foreign investors, particularly in the commodities sector.
“There is one stop shop for foreign investors interested in the country under Zambian Development Agency (ZDA). At the same time it has established a number of Special Economic Zones to target investment in Key Sectors including Pharmaceutical production and marketing.
“All sectors of the economy are open for Foreign Direct Investment,” he said.
He said Zambia’s imports from Botswana are minimal at US$43.3 million or 1 percent of Zambia’s overall imports. Sebele added that imports from Botswana have also declined by 15 percent over the last five year period.