Saldanha Bay IDZ (industrial development zone) being promoted by WESGRO
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Saldanha Bay IDZ (industrial development zone) being promoted by WESGRO

Massive deal pipeline into Africa

A deal pipeline of about R300 billion earmarked for investment in the rest of Africa is awaiting decisions by companies based in Cape Town, says Wesgro CEO Nils Flaaten.

“Companies based in the Western Cape have told us that they have already made investments of up to R5 billion in the past few years and that a massive pipeline of R300 billion in investments is waiting for decisions,” Flaaten told BusinessLIVE on Friday.

Wesgro is the Western Cape’ trade and investments promotion agency that is responsible for facilitating deals and opportunities between businesses in the Western Cape and the rest of the world.

Speaking on the sidelines of the briefing of a trade delegation of Cape companies that are due to visit Angola later this month, Flaaten said he would not give any specifics on who the companies were, however, he did say there were increasing signs that the province was becoming a major hub for trade on the African west coast.

“Recently two small shipping lines have begun regular services between Cape Town and the west African coast using small cargo ships. Then there is also the increase in exports of agricultural products to Angola and the investments being made buy Western Cape-based companies such as Shoprite Checkers,” he said.

Flaaten said that South African companies should see the entry of companies from other countries such as China as both an opportunity and a threat.

“They must learn how to co-operate with them by forming joint ventures where necessary and doing business, otherwise a country like China would simply use another country as their point of entry into Africa,” he said.

Roger Ballard-Tremeer a former SA ambassador to Angola and now Honourary CEO of the SA Angola Chamber of Commerce said that major investment opportunities were in the oil and gas sector, manufacturing, and infrastructure development.

He said companies willing to enter Angola should ensure they have their ducks in a row and find a local partner and preferably a local legal firm.

Ballard-Tremeer said the Angolan President Jose dos Santos and the ruling party, the MPLA, had made it very clear that corruption would not be tolerated.

He said that Angola had identified three groups of people with special economic rights that allowed them to import goods duty free and also exempted them from paying the consumption tax, or value added tax. These were military veterans who survived the 27 years of war that ravaged the country, young entrepreneurs and women.

“The government is also considering making similar exemptions for country’s southern provinces,” he said.

Ballard-Tremeer said transport infrastructure was improving and customs were becoming more efficient at clearing goods in the harbours and the airports.

“The Benguela railway line is three quarters complete in its renovation and will eventually stretch into Zambia and the Democratic Republic of Congo. There is talk that it would eventually link in with Namibia in the south,” he said.

Another sign of the investment being made by South African companies, Ballard-Tremeer said, was the opening of the Nampak/Bevcan factory, which was now the most advanced of its type in the world, in Angola.

“The war in Angola never hampered the beverage industry, but the investment Nampak/Bevcan made is being expanded and they hope they will soon have 100% of that market,” he said.

Western Cape provincial Minister for Economic Development and Tourism Alan Winde, who will be accompanying the trade delegation, said the Western Cape was ideally situated as a hub for the oil and gas fields off the west coast.

“That is why we are promoting the Saldanha Bay IDZ (industrial development zone) and that there are a number of financial and industrial companies located here (in the Western Cape) that can operate in Angola and along the west coast of Africa,” he said.

Twenty companies will be on the trade mission that will visit Angola from September 26 to 30. These include retailer Woolworths, gas & oil companies DCD-Dorbyl Marine, 7 Sea Geosciences, Toprope, De-Tect Inspection Services, Jacris, Morgan AM&T, power and electricity company Nyamezela Energy & Minerals, printing company RAKO labels, and agriculture company Fruitways.