Interview: H.E. Victorino Hossi - Minister of Trade & Commerce - Angola

Twenty seven years of civil war has hardly hindered the development of Angola's oil industry since the first discovery by Petrofina in 1955. Angola's oil industry accounts for 40 per cent of GDP, and 90 per cent of government revenues. The country has possibly the largest untapped petroleum reserves outside the Middle East. And the US imports more oil from Angola than from Kuwait. However, Angola does not have all the resources to rebuild the country’s infrastructure. The success of the peace process still needs the support and assistance of the international community. The Angolan government recognises the importance of foreign participation in the country’s development and the promotion of trade and investment is a top priority. Angola’s Minister for Trade and Commerce, Victorino Hossi, was recently in Dubai as a guest of Data Media Systems. Pipeline’s editor, Richard Price & Data Media Systems’ General Manager, Mohammed Loch spoke to Victorino Hossi about the future of Angola’s oil and gas industry.

Why are you keen to attract Middle East investment?
First of all, I must point out Angola is not just looking for investment from the Middle East. We are looking for investment from all interested countries. This is a direct consequence of the new era of peace in Angola that means all our economical activities will need foreign support. Of course, we are expecting the participation of all countries especially countries like the UAE. We hope the UAE will be one of the most important partnerships in terms of Angolan investments in this new phase. Angolan investments in this new phase.

What are you doing to promote trade between Angola and the Middle East?
We have made many business contacts with different commercial groups who have international operations and some experience with Africa. Data Media Systems and Mr. Mohammed Loch have made an important contribution in making this possible. The company has helped facilitate an interest about Angola here in the Middle East. It is my strong belief that with the right technology, these instruments and elements we can contribute significantly to increasing Middle East interest in Angola.

Has your trip been beneficial and what has the response been from companies you have seen?
I believe it has been positive. However, I must point out it is only the first step. It is important that Angola, and ourselves, contribute significantly to attract foreign companies. It is our responsibility to attract foreign investment and ensure companies can trust investing in Angola. Certainly the response from the UAE has been good. I found the response extremely positive. On the one hand there is an impatience, an eagerness, to become involved in, and to participate in, the Angolan reconstruction — to ensure Angola can rebuild after this period of war. The new era of globalisation is making it possible that the Middle East, Africa and Angola in particular, can participate in a better way in world organisations and in the world’s international management.

What sort of investment are you hoping to attract?
In the first place I would like to say we are looking for general investment. But I would like to emphasise fundamental sectors like public works, transportation, road and rail works, and maritime development. We also need to create conditions to improve agriculture so Angola can become self sufficient in terms of food production. Angola’s potential is fundamentally linked to the oil and diamond business. In this regard we believe that these two sectors must be supportive of the government’s development of the country.

What are the benefits of investing in Angola?
First of all, it is a kind of partnership with international companies and national companies. Angola has a legal structure that makes guarantees to foreign investors, and we allow companies to develop their activities in a safe way. Of course, this will guarantee that investors can repatriate their investment. Also, this will bring resources to the country and lead to the creation of new jobs. It is important for us to create conditions so Angola can be competitive on an international level.

Angola has been in a state of civil war since achieving independence from Portugal in 1975. A ceasefire accord was signed in April 2002, is the peace process complete?
Yes, the peace process is really complete. Presently there is real stability that is allowing us to undertake these kinds of development activities. We are focusing on Angolan development and finding new partnerships to help support Angola in this new era. In the concrete reality Angola must and will be fully involved in international relationships and become part of the international community. It is my strong belief that all efforts based on attracting foreign investment are welcome.

Has the Angolan government made any progress in price liberalisation and reducing inflation?
We must remember that during the period of the conflict we had, as a consequence, an economy that did not work. Of course the inflation phenomenon was a condition of the previous government. Presently we are trying to reduce inflation to two digits. This means we need efforts from different sectors and to synchronise the micro-economic policies with social worries. We also need to establish a program of economic issues to create a dialogue with the government itself and the private sector. We need to create a public administration that is operational and competent.

There are allegations suggesting large portions of Angola's oil revenue have been used for military purposes or embezzled?
That is true. This was part of the war effort of government and considering the reality of conditions at time this was necessary. Now the conflict is over the oil revenues must and are being allocated to the development of the country and we are working vigorously to ensure this.

Angola is not part of OPEC. Do you see this as an advantage or do you have plans to join OPEC?
As far as our relationship with OPEC, Angola is not a member, we are observers. Considering the oil issues we are going very carefully and considering the international oil issues. In the future, if is it possible and of positive benefit to Angola, we will consider becoming a member or remaining an observer in this international organisation. But we have a good, healthy relationship with OPEC.

Who are some of the oil companies presently investing and operating in Angola?
The oil companies operating in Angola are well known. Of hand, I cannot list them all but they include some of the major companies such as Chevron, BP, ExxonMobil, Shell and TotalFinaElf.

What are the plans to increase Angola’s current production rate?
We have a target and the government is trying to increase the oil production in Angola. Of course the government will do this is a balanced manner. Taking into consideration all factors, including the needs that are required for the development. We also need to keep our reserves safe and create conditions to ensure oil can be a real driver for Angolan economic development.

Do you think Angola’s oil reserves are enough to finance the recovery process?
I would like to answer this question in a different way. The oil which is produced in Angola, whether it is a big production or not, must be utilised as an instrument of social development and to create the potential to develop other sectors. It must be a support for the development of other industries, like agriculture – creating a kind of economical integration to make it possible to develop the country in general. We cannot just look to oil or diamonds as the only way to develop the country. We need to ensure that all other sectors are fully involved in the development of Angola

What is the future potential of the Angolan oil and gas industry?
I believe that oil will contribute to the development of the industrial sector in Angola, but we have other sectors. We also need to develop the gas industry, a sector that is closely linked to the oil industry, in the creation of an energy industry that will be the base for further industrial development. The oil and other activities must also be a mechanism for the education and evolution of Angola and to preserve our cultural identity. At the same time we need to keep in mind all the international relationships of Angola and emphasise the globalisation factor in permanent relationships among all participants in the world economy. In the face of this our job is important. First of all we believe it is important that we must communicate and keep the world informed of Angola. Not only about the potential opportunities and possibilities available in Angola. But also as a country that is ready to contribute to international stability. You must believe us Angola is prepared for this.

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