Angola’s economy is ranked at number 160 as the freest economy as per the current index. The economic freedom of this African country has a score of 46.7. Currently, this score has improved by a point of 0.5 which is attributed to improved government performance in terms of spending, business and human workforce. Even throughout of the 46 sub-Saharan African countries, Angola comes number 38, its score is still low compared to other world and African economies. Angola’s economic freedom is being undermined by corruption political interference especially on judicial affairs. Oil and diamond dependency for revenue by the government seems weaken the economy event it plays a big role in the same economy. In addition frontline sectors in Angola are usually dominated by Monopolies and quasi monopolies. Even though Angola’s economic index has improved in 2012, it is constantly being hampered by un-favoring trade regulations. This includes neglecting of policies that defines the open markets, barriers; both tariff and no tariff and stiff regulations on investments. The outcome of these regulations is an underdeveloped private sector less diversification of the economic base of the country.
Recently the government of Angola implemented simple and effective startup procedures but the private sector is still under the pressure of strict regulations. The problem with the regulatory system of Angola is transparency and accountability. In addition these are implemented inconsistently. The government holds on to the ownership of major sectors. In addition it controls the pricing in major sectors including fuel and electricity.
The market at Angola exhibits less liquidity. Another hindrance is that the funds available outside Luanda which is the capitol of Angola are few. Penetration into the Angolan market is therefore limited. Importing into the Angolan market is also challenging due to the high import duties which continue to restrict growth. According to the Namibia Breweries Limited market Manager, one of the major challenges they face in importing beer into Angola is the 50% import duty. This is un-favoring owing to the fact that the pricing of the products will have to be higher in order to make up for the duty. Even worse is that the import is due to increase in the near future due to the devaluation of the Angolan Currency(Kwanza ) in the last four years increasing the prices of Products.
The time taken from product delivery to payment in Angola is quite long and thus less favoring to business especially those that deliver in huge quantities. This is caused by buyers who purchase stock on credit in the Angolan market. This specifically is a drawback to importing companies that market and sell their products in Angola.
The market situation in Angola is that there is over dependency on oil. Lack of diversity in Angola is a major problem. Even though Angola has huge potential on others sectors like Agriculture, production of coffee, sisal, corn, tobacco, vegetables, the government seem to put too much attention on oil. This raises the prices of other commodities in the region.
Marketing in Angola calls for laying down of appropriate strategies. For instance the Angolan government permits joint ventures. In addition, due to the relationship between Angola and The US since after the cold war, many US organizations have set base in Angola. For this reason it is easier to find partners and agents dealing with US products.
The poor infrastructure and transport in Angola hinders the transportation and distribution of Products. Companies operating in Angola have come up with solution to these problems in accordance to their needs and abilities. Some companies have a chain of rural distributors for their products while other companies have penetrated the rural markets by coming up with wholesale agreements with the entrepreneurs. In addition franchising has been of great help in doing business in Angola. This is because the government hasn’t put up strict regulations on the same. Therefore foreign companies can be able to market in Angola via an existing importer based in Angola or by securing a tender through investment. In order to prosper in the Angolan market, competitive financing, supply reliability and competitive pricing s key to success.
Advertising and trade promotion via the media is limited in Angola since it has only one television network owned by the government. There are a couple of A.M and F.M stations in Angola but only one station offers advertising services. Use of billboards to advertise products are also widely employed by business organizations to market their products. Comparing U.S with Angola, the customer service isn’t responsive. The situation as at now is that the Angolan customers are after satisfactory services. Specifically post-purchase customer experience and support is being incorporated into many businesses operating in Angola.
The financial sector at Angola is still developing. This forces many banks in the country mostly undertake short term commission oriented operations. Among this are trade finance, dollar-based lending and currency trading. Inflation caused the banking system to use the dollar base greatly whereby up to 80% of deposits of the commercial banks are in US dollars.
The number of Angolan citizens living in the Diaspora has continually been increasing. The people main reason for the migration of these people to the Diaspora is search for a better life. Many Angolans leave the country and fly abroad in search of a better life. The reason behind this movement is the belief that when abroad one can have a better life with a better pay and better job security. Many Angolan professionals have left the country and gone to live abroad where they believe they are going to have a better life.
This migration has left the country in need for professionals and affected development in the country. Approximately 200000 Angolans live in the Diaspora. Majority of the people in the Diaspora live in Portugal and Brazil. The reason behind the increased number of people in the these two counties is because the three countries share a common language ‘Portuguese. Approximately 1500 Angolan doctors work in Portugal. There are approximately 68 Angolan organizations in over 18 countries. Angolans living abroad have the will to contribute give back to their country but there are no proper systems for them to invest in their countries. Most of the wealth made by the Angolans living in the Diaspora ends up being spent in the respective countries and fails to go and develop their motherland.
The Angolans living in the Diaspora have helped improve Angolan exports. Portugal and Brazil are one of the big importers of products from Angola. The high number of Angolans living in these countries provides a market for the Angolan goods and services. The Angolans in the Diaspora also help to market Angolan goods to their friends in those countries. Angola therefore benefits a lot from their citizens living in other countries.
Nature of products in Angola
Since its war ended in the year 2002, Angola is one of the countries with the highest economic rate. Global interactions have attracted foreign investors and the country now enjoys the privileges and opportunities, which go with it. The country soars high in terms of the range of products in the local and global market.
Angola is currently a wide range of products, from minerals to finished products. Angola enjoys a wide range of products such as oils and detergents. Production of these goods is high because the country has the best range of foreign investors. Additionally, the country enjoys a wide range of market, both locally and internationally. Angola has currently started exporting goods to Zambia and other proximal countries.
The latest brand of products in the market is toothpaste and toothbrush. In Africa, Angola is having the lowest production costs. Toothpastes are the trending brand in Angola. Due to availability of power and resources, production costs have reduced drastically. This makes Angola a suitable supplier to the neighboring countries such as Zambia.
Angola is also trading services such as training. Being a center for various technical fields, Angola hosts training on engineers and medical experts. Similarly, the country undertakes exchange programs with other countries such as the United Kingdom. With many developments of living, teaching in elementally levels is equally significant. Monetary serves such as banking is very important in enhancing easy and fast transactions.
Production and media is a concern since advertising is the new order of events in the Angolan market. With very many products in display, there is need to have an effective manner of informing the clientele about new products and changes which are made in existing products. Products are well distributed following the need to come up with an effective due will distributed trade centers.
Finally, Angola is topographically suitable for expansion of more outlets as well as centers for development of expertise such as institutions of learning. One of the factors behind the increase in demand and supply is because there an effective supply chain. The supply chain is enhanced by the ability by the suppliers to meet the demand as well as the demand to move with the prevailing market.
Angola is fitting into a new line of business operations. More lines of products are being developed and more investors are streaming into the Angolan market. Angola is in boom session where all aspects of business are growing simultaneously and exponentially. Technology plays a key role in the enhancement of a balanced growth and development in the line of product development and growth.
References
Vines, Alex (1999). Angola Unravels the Rise and fall of the Lusaka Peace Process,. Human Rights Watch. Page 189.
Erik P. Hoffmann and Frederic J. Fleron (2007). The Conduct of Soviet Foreign Policy, 1980. Page 524. ICON Group International Executive Report on Strategies in Angola
Kotler, Philip & Keller, L. Kevin (2012). Marketing Management 14e. Pearson Education Limited 2012 Marketing Management: Strategies and Programs", Guiltinan et al., McGraw Hill/Irwin, 1996
United States Congress. (1997). Foreign Operations, Export Financing, and Related Programs Appropriations for 1998: Hearings, Page 269.
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