Oil Rich, Yet Poor

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Ask any corporate traveller to name the world’s costliest city and chances are that London, Tokyo or New York will top the list. First-world cities home to the world’s great stock exchanges must surely be the most expensive, you’d reason? Well, think again, as Richard Holmes explains.

According to New York-based consulting firm Mercer, Luanda has once again claimed top spot as the most expensive city in the world for expats. And corporate travellers on a flying visit will find that Angola’s faded capital is no cheap date either.

Hotel rooms – if you can find one – average $400 a night, a short taxi ride could set you back $30 and a restaurant meal will lighten your wallet by at least $50. To rent a two-bedroom apartment, you’re looking at over $7000 a month. At first glance the high prices don’t match the potholed streets, snarling traffic jams and crumbling services, but Luanda is perhaps the perfect example of capitalism at work. Supply and demand dictates the price of life here, with a booming resources economy leading to no shortage of corporate travellers… and inflated prices.

Until the global downturn struck in 2009, Angola was one of the world’s fastest growing economies, with GDP growth topping 13 percent. This plummeted to a meagre 1.6% in 2010, but is seeing a rebound once again. Angola, though, is a country accustomed to cycles. Even with GDP growth down in single digits, it’s a period of prosperity after 27 years of civil war. The guns fell silent in 2002, and there’s been relatively stable government in the decade since. A new constitution was adopted in February 2010, further entrenching President José Eduardo dos Santos’s 30-year hold on power.

And despite a pervading culture of corruption and political patronage, the country remains one of the most important business destinations in Africa, thanks to its vast natural resources. “Angola, like Nigeria, is a very important market in Africa, although doing business there can be very tricky,” notes Marc de Jager, Global Alliance Manager for corporate travel managers TWF Global. “There are widespread stories of bribery and corruption, so make sure that you are doing business with a reputable business.  If ever there is a country where you need to do your due diligence, this is it.”

Angola’s enormous oil reserves ensure it jockeys with Nigeria as the continent’s largest producer, and there are substantial gold and diamond deposits in the north-east. Along with deposits of iron ore and uranium, it’s perhaps no surprise that Angola has become China’s largest trading partner in Africa, and its largest single supplier of oil. “Angola is an oil and energy destination,” sums up Axel Simon, Director Southern Africa for Lufthansa German Airline, which operates a twice-weekly schedule between Luanda and Frankfurt using an Airbus A340. “Since the country is politically stable, it finds itself in a development boom.”

“Traffic to Angola is definitely on the increase,” agrees Ralf Karsenbarg, Commercial Director Southern Africa & Angola for Air France-KLM, which currently flies twice a week from Luanda to Paris. “From 5 March 2012 we will also double our capacity and add two weekly KLM flights from Luanda to Amsterdam. The amount of seats available in the market is still limited, so we are confident the additional seats on KLM will fill up quickly.”

Airlines are confident of demand, because despite the challenging environment and high cost of doing business, Angola offers a host of business opportunities. “It’s almost all resources, but there is also vast potential for organised agriculture, which imploded during the civil war,” says Paulo Correia, Angola Area Manager for Wings Travel Management. “The banking industry is growing and there are also retail opportunities. Shoprite is the largest brand at the moment, but there’s talk of other retail brands entering the market. Construction is also booming, in terms of rebuilding after the civil war, but this will take time as the skills base is very low.”

“The greatest deficiency in the country is institutional and human capital,” says Paul Hare, executive director of the U.S.-Angola Chamber of Commerce. But while those soft skills may be in short supply, the country’s mineral riches seem almost limitless.

In a world hungry for oil, Angola’s coffers are sure to remain well stocked, but perhaps the real question is whether the country will remain another victim of the ‘resource curse’ – with both vast wealth and grinding poverty. After surviving three decades of devastating civil war, the citizens – and entrepreneurs – of Angola can only hope the tide has turned.

Fact File

Population: 13.3 million
Time zone: GMT+1, one hour behind South Africa
Electricity: Plugs are two-prong round sockets, as commonly found in Europe
Dialling code: +244 + area code + number required
Currency: Angolan Kwanza, but US dollars are widely traded and accepted
GDP growth rate (2010): 1.6%
Language: Portuguese, so a basic understanding – or a translator – is essential. The exception is the globalised oil and gas industries, which are largely English speaking
Important cities: The capital Luanda is the commercial heart of the country, and home to most headquarters for the all-important petroleum industry. Benguela, south of Luanda, is a key port city, while Lubango is the main commercial gateway for traffic from Namibia. In the north-east, Malanje and Saremo are hubs for the diamond-mining industry.

Visas 101

Almost all nationalities require a visa to enter Angola, and processing can be maddeningly slow.

“I’d advise business travellers to apply at least four weeks before they need to travel,” suggests Paulo Correia, Angola Area Manager for Wings Travel Management.

There’s a lot of paperwork and you’ll need a letter of invitation from an Angolan company, along with a copy of their company registration documents, as well as a letter confirming your employment. These must all be written in Portuguese. In addition you’ll need your passport, a copy of your passport, two photos and proof of your flight reservation. Single entry visas cost R750, and multiple entry visas are not available.

Airlines and airports

Luanda’s Quatro de Fevereiro International Airport is the main gateway into Angola, with a surprising number of direct services connecting the city to destinations across North America, Europe and Africa.

Although the airport is just six kilometres from the city centre, the capital’s notorious traffic means it’s a good idea to allow plenty of time to get into the city, or to check-in for your departing flight. If you haven’t pre-arranged a transfer, the airport offers car hire (it’s strongly recommended to hire a driver too) and hotel shuttle services. Taxi services are limited, if available at all, and not recommended. A new international airport is under construction 40 kilometres south of the city, but is not expected to open before 2013.

TAAG is the national carrier of Angola and offers regular flights to overseas, regional and domestic destinations. Long haul, TAAG services routes as diverse as Lisbon, Rio de Janeiro, Beijing and Havana. Within southern Africa the airline offers five flights per week to Johannesburg, two per week to Cape Town and 10 flights a week to Windhoek. TAAG also flies 11 domestic routes, including major centres such as Malanje and Lubango.

After years on the European Union’s airline blacklist, TAAG was allowed to operate flights into the EU using its Boeing 777 and 737-700 aircraft, from 2010. While a First and Business Class service is offered on longer routes, fully-flat beds are only offered in First Class.

Visit taag.com or call +244 22 232 3718.

South African Airways flies from Johannesburg to Luanda five times a week, using an Airbus A340 that offers fully-flat beds in Business Class. Fares start from R4600 (Economy) to R13 000 (Business).

flysaa.com or +27 11 978 5313

Air
Namibia
flies from Windhoek to Luanda five times per week. The airline offers up to three flights a day from both Johannesburg and Cape Town to Windhoek, offering easy connections via Hosea Kutako International Airport. Air Namibia also recently announced plans to start operations into Ondjiva in southern Angola.

airnamibia.com.na or +264 61 299 6111 

Travel tips

Money: It’s best to only change dollars into Kwanza in small amounts, as and when you need them. Dollars can be changed at hotels and banks, although you’ll get a better rate on the (widely-used) black market. If you decide to go this route, ask a local or your driver for a reliable moneychanger. Visa cards can be used at international hotels and some restaurants. They can also be used to draw cash at ATMs, although compliant ATMs are limited and often run out of bills.

Out & About: Unless you speak Portuguese, avoid walking around Luanda at night and – as always – it’s best to ask for local advice on no-go areas. However, don’t be afraid to leave your hotel, as the local restaurants offer far better value and atmosphere than most hotel eateries. With their impressive city views, the seafront restaurants on the peninsula known locally as ‘Ilha’, are popular with locals in the evenings. Caixe Quattro (Quay Four) is a good option.

Getting around: It’s best to ask your Angolan host company to arrange airport transfers, or alternatively book a shuttle service with a reputable hotel. International car rental agencies at Luanda’s airport offer hire cars with local drivers, which is your best option if you plan to do a lot of travelling. Expect to pay about $150 a day for private car and driver. Traffic in Luanda is best described as organised chaos, so self-drive is not an option. Remember that Luanda has some of the worst traffic jams in Africa, and travel can be maddeningly slow. During rush hour it can take up to 90 minutes to travel 15 kilometres across the city.

Malaria: Prophylactics are essential in Angola, as malaria is widespread. Proof of yellow fever vaccination is also required, and remember that vaccination must be done more than 10 days before you travel. Consult your travel doctor three weeks prior to travel for professional advice.

Attire & etiquette: On the whole, Angola is more casual than many other African destinations, although for meetings in the government and financial sectors a business suit is recommended. However, the oil and gas industries are more informal and smart-casual attire is acceptable. Angolan meetings often operate on ‘African time’, so be patient and don’t be surprised if appointments begin an hour or two later than expected.

Where to stay

Take a deep breath, lower your expectations and raise your budget… hotels in Angola are amongst the most expensive in the world, so expect to pay in the region of $400 a night for bed-and-breakfast in a 4-star hotel. However, these are the five best options…

Hotel Presidente

The capital’s best-known hotel has recently been refurbished, and offers a central location and sea views. This hotel is all about business, with few leisure facilities, but plenty to help you get the job done – there’s free Internet access, an airport shuttle and business centre. The conferencing facilities cater for functions up to 500-strong and with rooms starting at $264 a night, this is also one of the city’s more affordable options.

Largo 4 de Fevereiro, Luanda, +244 222 311 717, hotelpresidente.com

Hotel Tropico

Thanks to its central location, the Hotel Tropico could save you from Luanda’s notorious traffic, but convenience comes at a price. Expect to pay close to $500 a night, although the hotel’s services are some of the best in Luanda. While the rooms (like many in Angola) could do with an update, the hotel’s wireless Internet, tennis and squash courts and 24-hour room service, make it a good bet.

Rua da Missão, 103, +244 222 335 335, tdhotels.pt

Hotel Alvalade

Situated close to the airport, Alvalade is a good choice if you’re on a flying visit, and the hotel’s spacious rooms are among the best in the capital. There’s a rooftop swimming pool and fitness centre on site, free Wi-Fi and good restaurant/bar facilities for after-work meetings. Conference facilities can accommodate up to 200 people.

Avenida Comandante Gika, +244 222 620 600, tdhotels.pt

Hotel Skyna

Centrally located close to major petroleum companies, as well as government offices, the 237 well-furnished rooms of the Skyna (pronounced skee-nha, by the locals) make it another good bet for beating the traffic. Ask for a room on an upper floor to avoid the noise from nearby nightclubs.

Avenida de Portugal 29, +244 222 670 900, skynahotel.com

Talatona Convention Hotel

Perhaps the only true 5-star property in Luanda, the Talatona Convention Hotel is up to 90 minutes drive from the city, but offers the best facilities in the capital. Modern hotel rooms offer stylish décor and all the mod cons, while three-bedroom self-catering villas are a good bet for longer stays. Over a dozen function rooms seat up to 300 people, with an excellent selection of restaurants and bars on-site. Rack rates from $640, but are negotiable.

Rua Luanda Sul, Talatona, +244 226 424 300, hoteltalatona.com

Need a Hand?

Access to Africa is a Destination Management Company (DMC) specialising in travel assistance throughout the continent ofAfrica. They have an association with an established DMC inLuanda that allows them to offer a comprehensive range of services and advice throughoutAngola:

  • Accommodation – advice and bookings
  • Prepayment facilities
  • Arrival and departure airport transfers
  • Transport services (chauffeur services)
  • Meeting and conference arrangements
  • 24-hour emergency support on the ground in country
  • Excursions