AKWABA CITY-Tourism_Angola

Project Akwaba City

Akwaba-Group.LDA©2006 CONFIDENTIAL

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Akwaba City© 2006

Tourism Sector-Angola Luanda-Cacuaco

AKWABA-GROUP.LDA

Akwaba-Group.LDA©2006

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TABLE OF CONTENTS 1. AKWABA CITY PROJECT ...................................................................................... 4

1.1 Summary............................................................................................................ 4 2 BUSINESS OVERVIEW.......................................................................................... 7

2.1 Key Economic Indicators ................................................................................. 7 2.2 Economic Context ............................................................................................. 7 2.3 Population and Labor Force ............................................................................ 8 2.4 Role of Tourism................................................................................................. 8 2.5 General Institutional and Regulatory Framework ........................................ 8 2.6 Operating Costs................................................................................................. 9 2.7 Local Skills Base................................................................................................ 9 2.8 Services Infrastructure ..................................................................................... 9

2.8.1 International Air Access ............................................................................. 9 2.8.2 Domestic Air Services .............................................................................. 10 2.8.3 Roads......................................................................................................... 10 2.8.4 Sea Access ................................................................................................ 10 2.8.5 Telecommunications ................................................................................. 10 2.8.6 Infrastructure rehabilitation ...................................................................... 10

2.9 Economic Projection ....................................................................................... 11 3 TOURISM SECTOR .............................................................................................. 12

3.1 Product Offers ................................................................................................. 12 3.2 Accommodations ............................................................................................. 12 3.3 Market Trends ................................................................................................ 13

3.3.1 Visitor arrivals by purpose of visit............................................................ 13 2.3.2 Visitor arrivals by country of origin ......................................................... 13 2.3.3 Visitor expenditure.................................................................................... 14

2.4 Institutional Arrangements............................................................................ 14 2.5 Outlook to the Future ..................................................................................... 14 2.6 Angola Tourism Growth ................................................................................ 14

3 INVESTMENT OPPORTUNITIES IN TOURISM ............................................ 16 3.1 Investment Sectors .......................................................................................... 16 3.2 Priority Investment Zones.............................................................................. 16

4 INVESTMENT ENVIRONMENT........................................................................ 17 4.1 Investment Framework .................................................................................. 17

4.1.1 Government policy.................................................................................... 17 4.1.2 Investment agencies .................................................................................. 17 4.1.3 Double taxation agreements...................................................................... 17 4.1.4 Investment guarantees............................................................................... 17

4.2 Investment Incentives ..................................................................................... 17 4.3 Access to Finance ............................................................................................ 18

4.3.1 Commercial banks .................................................................................... 18 4.3.2 Development banks................................................................................... 18 4.3.3 International Financial Institution............................................................. 18 4.3.4 Transfer of Capital and Profits.................................................................. 19

4.4 Residential and Work Visas ........................................................................... 19

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4.5 Technical and Promotional Assistance ......................................................... 19 5 LIST OF KEY CONTACTS .................................................................................. 20

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1. AKWABA CITY PROJECT 1.1 Summary Akwaba City is a city built around a water attraction theme park in Cacuaco, a beach front town located in the Northwestern region of Angola, approximately 30 minutes from Luanda, Angola’s capital.

Akwaba City is the prototype city of tomorrow. It is designed as an eco-friendly and sustainable metropolis using new ideas, designs and technologies that are now emerging from creative centers around the world. It is a community of tomorrow that will always be introducing, testing and demonstrating new materials and new systems.

The project design and development includes 3 sectors that will impact 4 economic centers: agro-industrial, business& retail, eco-tourism and residential.

1.1.1 Akwaba Industry- the agro-industrial sector. This region of Angola is ideal for sustainable aquaculture (the farming of plants and animals in water). This sector also lends itself to eco-tourism.

1.1.2 Akwaba Resort –the business, retail & commercial sector. The waterfront resort features two 5-star hotels connected to a convention center and office complexes with retail and entertainment venues throughout the sector. It will include some high-end beach houses and shoreline retirement villas.

1.1.3 Awa Park & Akwaba Safari– the eco-tourism sector—Awa Park is a family-oriented water theme park while Akwaba Safari provides organized tours in Angola National Park.

1.2 Background Angola's 27-year civil war ended in April 2002. The economy is booming and the population is 13 million strong. An oil boom helped push Angola's economic growth by 18%in 2005 and the government expects further growth as oil production rises from its current 1.4 million barrels a day to 2 million barrels a day by the end of 2007.

With vast resources of oil, diamonds and other minerals; Angola is an ideal for investing and investors. Angola is sub-Saharan Africa's second largest oil producer after Nigeria. The country is geopolitical place to lead central Africa for the next 30 years.

The Country needs more the 44 five-star hotels for the 2010 Africa soccer cup. Currently, availability of hotel rooms is scarce. The capital Luanda is over crowded. The urbanization plans offered by the government are proving very difficult to implement; and, it is not cost effective to rebuild the capital.

The best plan of action for the citizens of Luanda, the county of Angola and the tourist community is a fresh start: Akwaba City project provides a well-planned viable solution to the infrastructure problems while advancing economic and community development. Akwaba City will create jobs for the population for years to come.

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1.3 The Vision As plans get finalized, there may be modifications, but the basic philosophy of what we are planning for Akwaba City is going to remain unchanged

Our success is our concern for people and a wholehearted dedication to the happiness of the people who visit here. We have a perfect location in Angola - almost in the very center of travel on the African Continent. In fact we've selected this site because of its accessibility to tourists and Angolan residents. The site is located 30 minutes from Luanda city center and 10 minutes from the new main marketplace and a short drive from the new international airport in Viana.

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1.3.1 The City: According to our scale the whole area encompasses approximately 26,000 acres (44-square miles) - twice the size of the island of Manhattan. There's enough land here to hold all of the proposed ideas and plans.

We begin with the public need. We think the need is to start from scratch on virgin territory and build a special kind of new community: green and sustainable. We will be dedicated to the wellbeing of the people who live, work and play here and those that come here from around the world to visit our living showcase.

Akwaba City will stimulate Angola’s economy while developing new solutions that will meet the needs of people as expressed right here in this experimental community.

Akwaba City, we call the yin and yang circle or the bagua ( pa kua) of the I Ching. The symbol is an octagonal diagram that is used in feng shui analysis. Each direction on the octagon (north, northeast, etc.) is similar to the spokes of a wheel. The city fans out along a series of radials from a bustling hub at the center in similar design.

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1.3.2 Welcome to Akwaba City: We will have an entrance complex where all visitors will enter. Akwaba City's dynamic urban center will offer the excitement and variety of cultural, social, business and entertainment activities

The Akwaba industrial park area covers approximately 1000 acres and connects to Awa Park.

Awa Park is a theme park that will offer activities for the entire family. The park is a whole new concept in family entertainment.

Akwaba Resort features cosmopolitan hotels towering 11 stories and a convention center. Two 5-star hotels will be the visual center. Tourists will be offered not only the most modern guest rooms and convention facilities, but also 8 acres of beach-front recreation area. Shopping areas with stores and entire streets that recreate the character and adventure of places in Africa and other parts of the globe can be found here. Movie theaters, concert halls, restaurants and a variety of live attractions are located in this sector. A wide range of offices providing services required by Akwaba City's residents and work force are nearby. The entire Akwaba Resort, Awa Park, and Akwaba Industry areas will be completely enclosed.

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1.3.3 Getting Around the City: Here pedestrians, bikers and horse-drawn carriages will be free to move about without the worry of motorized vehicles. Only electric- powered vehicles will travel the streets of Akwaba City’s city center along designated vehicle lanes.

Two separate but interconnecting transit systems will move people into and out of Akwaba City in safety and comfort through the central terminal. Both transit systems are electrically powered.

Most automobiles and trucks will be allowed to travel on roadways reserved for specific types of vehicles in areas away from the City Center. There will be truck routes reserved for supply vehicles. Trucks will have easy access to all loading docks and service elevators for the delivery of commercial goods.

There will be an automobile thruway, exclusively for cars. Adjacent to the roadway are parking areas for the convenience of hotel guests. For the motorist just driving through, no stoplight will ever slow the constant flow of traffic through the center of Akwaba City.

Beyond the greenbelt are Akwaba City’s neighborhood areas of single family homes. This is one radial neighborhood in a gated community. Here and throughout the community residents returning from work or shopping will disembark at stations conveniently located just a few steps from where they live.

The homes are located in a wide green area that provides light recreation activities for adults and play areas for children. Circulating through this area are paths reserved for pedestrians, electric carts and bicycles. Children going to and from schools and playgrounds will use these pathways--always completely safe and separated from the automobile.

Within the Akwaba industrial sector, passengers can disembark from the monorail and take electric cars for travel throughout each facility. This industrial complex will provide employment for many people who live in Akwaba City.

1.4 Conclusion:

We at Akwaba-Group LDT have deliberately avoided getting into the details regarding the numbers of commercial and retail establishments. We have some suggestions but we rather leave everything to negotiation within the proposed framework and stated vision.

We would like to have the resort with at least 300-500 rooms, ideally 300-800 rooms, 80 suites, and an aerodrome on the rooftop terrace. At least three restaurants, two snack bars , one or more hotel casinos, a heath-fitness club including an indoor and out door swimming pool, sauna, meeting room and conference rooms with appropriate conference facilities, night club- dancing area, some terrace with plan, patio and adjoining gardens.

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BUSINESS OVERVIEW

2.1 Key Economic Indicators Table 1 details the recent trend for selected key economic indictors for Angola. More general country information is provided on the websites listed in Section 5 of this report.

Table 1. Angola’s Key Economic Indicators 2002 through 2004

Economic Indicators 2002 2003 2004 Area 1,246,700 km² Population (mn.) 12.7 13.1 13.5 14.0 Population Growth (%) 2.9% 2.9% 3.0% 3.2% Urban population as % of total 35% 35.5% 36% n.a. Size of the labor force (mn.) 5.75 5.91 6.07 n.a. GDP (US$ bn. at current prices) 8.9 10.8 13.8 20.1 Gross national income per capita (US$ at current prices) 520 680 760 1,030 GDP growth at constant prices (%) 3.1% 14.4% 3.5% 11.2%Exports (US$ bn. at current prices) 6.36 8.26 9.84 n.a. Imports (US$ bn. at current prices) 6.35 7.56 9.25 n.a. Balance of Trade (US$ bn.) 0.1 0.70 0.59 n.a. Inflation Rate (%) 108.5% 109.2% 111.4% 46.5%Currency 1 Kwanza (AOA) = 100 lwei Exchange Rate: annual average Euro to former Metical 19.77 42.01 84.26 n.a. GDP: Gross Domestic Product. mn: millions. bn: billions. n.a.: not available. Sources: Comtrade, World Bank Development Indicators, IMF Statistical Annex, Bank of Angola. 2.2 Economic Context In 2004, the total Gross Domestic Product (GDP) amounted to some US$20 billion at current market prices. Currently, real GDP is growing at over 10 percent per annum. With an estimated population growth of rate of around 3 percent, the per capita income growth rate is also improving.

In 2003, the oil and gas sector accounted for 49.4 percent of the total GDP. The next largest sectors were trade and commerce, with 14.5 percent; agriculture, forestry and fishing, 8.4 percent; diamonds, 4.6 percent; and other services, 15.4 percent.

Angola’s economy suffered tremendously during the past internal conflict which finally ended in 2002. Prior to the conflict, Angola was a key international and regional producer

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of a wide variety of goods from coffee and other agricultural products, to oil, cement and manufactured goods. The conflict also had a huge impact on the infrastructure of the country, much of which needs to be completely rebuilt. This in itself presents many opportunities for investment.

The economy is dual in nature: the oil and gas sector, located primarily off-shore in Cabinda Province, was largely unaffected by the war; other sectors suffered badly. Output is expected to more than double by 2007. Other key drivers of the economy are diamonds, with production expected to expand five-fold by the end of the decade, and a variety of other basic metals and minerals.

The enormous potential that Angola has in oil and gas, mining, energy, agriculture, timber, fishing, tourism and manufacturing, should see Angola grow quickly and steadily for years to come. The estimated and projected GDP growth has already been shown to be on the cautious side, with 2005 overall GDP growth now expected to be closer to 15 percent than the previous estimate of around 10 percent.

2.3 Population and Labor Force The total population is estimated at 14.0 million in 2004, and is currently growing at around 3 percent per annum. The population density is approximately 11 persons per km

2. Some 36 percent live in Luanda and other urban areas. The total labor force is

estimated at 6.1 million, representing 45 percent of the population.

2.4 Role of Tourism

The tourism sector is developing, yet business related tourism is still most prominent. However, the leisure tourism market is expected to expand with the resuscitation of the long-dormant wildlife sector. Refurbishment of existing hotels and the building of new ones are taking place at an accelerated rate. While tourism will continue to play a relatively minor role in the economy when compared with oil and mining, the Ministry of Hotels and Tourism is mindful of the potential contribution that tourism can make to national development. Tourism’s share of GDP is currently estimated at about 3 percent (based on World Travel & Tourism Council estimate for 2002). Training of hotel workers is usually provided in-house.

2.5 General Institutional and Regulatory Framework Angola’s legal system is based largely on Portuguese law and Angolan customary law. The Government has made good progress in liberalizing the country’s trade regime. Complex procedures for obtaining government approval for such things as import licenses have largely been dismantled and, as a result of a more market-oriented allocation of foreign exchange, most trade transactions can now be conducted through commercial banks and are not subject to prior authorization or licensing by the National Bank.

Investment in Angola is carried out through the Angolan National Investment Agency (ANIP). The Private Investment (Law 11/03) lays out the general parameters, benefits, and obligations for foreign investment in Angola, and encourages domestic and foreign investment by providing equal treatment, offering fiscal and custom incentives, simplifying the investment application process and lowering the required investment

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capital. However, investments in the energy, diamond, telecommunication and financial sectors continue to be governed by legislation specific to each sector.

The management of customs has been outsourced to Crown Agents for a five-year period and in this time a complete modernization programmed is being undertaken. Part of the programmed involves the creation of an equitable and transparent environment for the application of customs law and regulations and the simplification of systems and procedures. It is expected that delays in customs clearance will reduce dramatically.

Land tenure Under the Constitution, all land in Angola is the property of the State. The Government has the sole responsibility to establish the conditions under which the land can be used, and demands proven capacity from the petitioner to develop and use the land effectively. Long-term leases (up to 99 years) are available.

2.6 Operating Costs Average operating costs are much lower in Angola than in Europe. The monthly wage for a hotel worker is the equivalent of $1,000 per month, and around $4,000 per month for management personnel.

2.7 Local Skills Base Angola has a large labor pool, but lacks skilled human resources in a number of fields, which creates constraints for the establishment and growth of businesses across all sectors. Very few Angolans speak English which may hamper communication. There are several programmed run by the large oil companies, as well as other industrial companies, government and donors, to redress the situation. Training for the hospitality and tourism sector is normally provided in-house.

2.8 Services Infrastructure As with other post-conflict societies, inadequate infrastructure hampers development of new industries and businesses. Internal transport has yet to be adequately rehabilitated and often reconstructed, and power, water and telecommunications are erratic. The rebuilding of much of the infrastructure – including bridges, telecommunications systems, airports, ports, water and sanitation systems, the power grid and clearance of land mines – are all expected to facilitate tourism sector development. The Chinese government is providing Angola with a $2 billion credit to support infrastructure development projects.

2.8.1 International Air Access There is one international airport, 4 de Feveiro International Airport in the capital, Luanda which is operating at capacity with high load factors on most flights. International airlines serving Luanda include TAAG (Angolan Airlines), TAP (Air Portugal), Air France, South African Airways (SAA), Air Namibia, Ethiopian Airlines and Aeroflot. Air Namibia also serves the Windhoek-Lubango route.

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2.8.2 Domestic Air Services TAAG and charter companies operate services between Luanda and the main urban centers.

2.8.3 Roads The major roads are in relatively good condition and vehicles can now travel between Luanda and the provincial capitals with relative ease. The main west-east highway links Luanda with the interior. However, some roads in the interior are in a poor condition, especially in the rainy season.

2.8.4 Sea Access The main port at Luanda can accommodate cruise liners, but there are few calls at present.

2.8.5 Telecommunications Angola has a good telecommunications services in the main centers, although access to land lines through the country’s service provider, Angola Telecom, is sometimes limited. There are two mobile phone providers, United and Movicel, with coverage throughout the country. Angola also has four internet service providers.

2.8.6 Infrastructure rehabilitation Planned (or ongoing) infrastructure rehabilitation includes

a) Railways: the Indian government is providing a $40 million credit facility to Angola to help the country rebuild its railway networks, especially the lines linking Angola to Zambia and the DR-Congo.

b) Airports: a new airport is to be built at Luanda by 2015.

c) Power sector: the National Electrical Company (ENE) has announced plans to install new infrastructure to provide electricity to all regions of the country that have been without electricity. The “Strategic Development Plan for 2005/2009” includes the rehabilitation of electrical infrastructure in industrial centers, as well as the electrification of more rural areas.

d) Telecommunications: there has already been a major expansion of the mobile network, and plans are afoot to expand coverage further by both major operators and fixed line service providers;

e) Road network: the Government priority is to restore approximately 4,000 km of roads and 33 bridges including the roads linking Luanda – Huambo – Cuito; Luanda – Caxito – Mbanza Congo and Luanda – Sumbe – Benguela – Lubango – Onjiva. There is also a provision for building three highway stretches as well as for paving the streets in 13 cities that are currently in very bad condition.

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2.9 Economic Projection Everything seems to be breaking right for Angola just now. 2005’s oil revenue of $10.6 billion was almost double the figure from 2004. A recent report by The Economist Intelligence unit projects the country’s growth rate at 16.7 percent in 2006 and 20.8 percent in 2007, making Angola’s one of the world fastest-growing economies.

The United States already import 15 percent of its oil from Africa, mostly from Angola and Nigeria; that figure is bound to rise and could even double, eventually making Africa as large a supplier of oil as the Middle east now is.

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3 TOURISM SECTOR With new-found peace, Angola is striving to gain a foothold in the region’s rapidly-developing tourism sector. There is strong growth, but from a low base.

3.1 Product Offers Angola combines a wide range of different landscapes and cultures with a rich and varied wildlife. Major attractions include:

• Historic/Cultural Heritage Angola enjoys a rich, colonial heritage. The capital, Luanda, was established as far back as 1575. There are several interesting buildings of historical significance and churches dating back the 17th century, including the two fortresses, Fortaleza de São Miguel (built in 1634), which now houses the Armed Forces Museum, and Fortaleza São Pedro da Barra, built in 1618; the National Bank of Angola building; and the Museum of Slavery which is situated some 20 km along the coast.

• Beaches Angola’s 1,650km of coastline offers several pristine beaches in the Benguela and Nanibe provinces. Visits can also be made to Ilha de Luanda (which is joined to the mainland by an embankment) and the beaches on Ilha do Mussulo peninsula where there are several bars and restaurants as well as opportunities for water sports. The second city of Benguela, with its acacia-lined streets and superb beaches, offers good scuba diving and deep-sea fishing opportunities.

• Wildlife Angola offers a diverse landscape with several environmentally protected reserves. Kissama National Park lies some 75km south of Luanda. Angola’s animal life is rich and varied, and includes the unique giant Palanca Negra antelope. Exotic plants and butterflies are also attractions.

Other attractions include:

• The Feira Artesanal da Beira, a handicraft market located 16km from Luanda, which is open on weekends;

• Unique flora and spectacular rock formations in the Iona National Park (in Namibe province, near the border with Namibia);

• Bibala beach where the water is reputed to have healing properties; and

• The Maiombe rain forest (in Cabinda province) which is especially famous for the hundreds of butterfly species.

3.2 Accommodations In 2003, there were an estimated 9,244 rooms in tourist accommodation establishments compared with 8,262 rooms in 2002 and 7,897 rooms in 2001. Much of the existing tourist accommodation stock needs refurbishment and/or modernization.

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3.3 Market Trends

3.3.1 Visitor arrivals by purpose of visit

Visitor arrivals Tourism statistics for Angola are not easily accessible. The number of foreign tourist arrivals is estimated at 140,000 in 2004 compared with 106,625 in 2003 and 9,546 in 1995.

Purpose of visit The great majority (78 percent) of all visitors come to Angola for business or work reasons, and only an estimated 7 percent for leisure purposes.

2.3.2 Visitor arrivals by country of origin In 2003, an estimated 52 percent of all international tourist arrivals were from European countries; 29 percent from other African countries; 14 percent from the Americas; and the remaining 5 percent from other countries. In 2003, visitors from non-African countries accounted for some 68 percent of all nights spent by international tourists in all accommodation establishments, and those from South Africa, a further 14 percent.

Table 2. International tourist arrivals (by residence), 1995-2004

1995 2001 2002 2003* 2004*

Annual % Change 2004/95

Africa 2,115 14,580 16,618 30,915 n.a. n.a. South Africa 700 6,880 9,674 n.a. n.a. n.a. Europe n.a. n.a. n.a. 55,190 n.a. n.a. Americas n.a. n.a. n.a. 14,770 n.a. n.a. Other/not specified 7,431 52,799 73,914 5,750 n.a. n.a. Total 9,546 67,379 90,532 106,625 140,000 34.7 * estimates Source: World Tourism Organization. Table 3. International tourist travel to Angola (2004 – 2005)

Source 2004 2005 Annual % 2004 - 2005

Total Tourists 194,329 209,956 9 % Europeans N/A 102,025 N/A Africans N/A 45,100 N/A Business Travel N/A 27,000 N/A Family Affair Travels N/A 19,557 N/A Travel by Air 141,803 153,248 9 % Travel by Road 46,639 51,562 9 % Source: State Agency for Private Investments (ANIP).

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2.3.3 Visitor expenditure International tourism receipts have grown from $22 million in 2001 to an estimated $71 million in 2003 and (according to government estimates) to $97 million in 2004. This figure is dwarfed by earnings from oil, petroleum products and other exports which amounted to an estimated $9.8 billion in 2003.

2.4 Institutional Arrangements The main responsibility for tourism development and promotion lies with the Ministry of Hotels and Tourism. The private sector is weakly organized at present.

2.5 Outlook to the Future Apart from the infrastructural constraints (which are being addressed), there are good prospects for the development of tourism and widespread recognition of the key role that it can play – particularly business, cultural and eco-tourism – in the development of this rapidly emerging country which is one of the region’s richest in terms of natural resources.

2.6 Angola Tourism Growth

Angola tourism growth versus the rest of the world: World tourism projection growth rate from 2006 to 2007 is about of 10.6 percent.

Africa this year again is the world's leading region when it comes to capitalize this expansion of the sector. Between January and August, international tourist arrivals to Africa increased by 9.8 percent.

• In Angola alone from 2004 to 2005 there were a net increase of about 9% more tourists from overseas, than in the previous year.

• The tourism sector in Angola generated approximately $ 104,200,000 between 2004-2005.

A UN agency, Madrid-based World Tourism Organization (UNWTO), noted in its thrice-annual UNWTO World Tourism Barometer; a world-wide increase by 4.5 percent in international tourists during the first eight months of this year, compared to the same period last year. "The short term outlook remains very positive, especially against the background of a strong world economy and as favorable exchange rates continue to encourage European and Asian travelers," UNWTO noted. With a very notable growth rate of 10.6 percent foreseen for the whole of 2006, Africa repeats its position as the fastest growing regional tourist destination from previous years. Although coming short of a boom, the previously undiscovered African destination is slowly becoming an appealing option for travelers. According to the UNWTO report, Sub-Saharan Africa (+12.6 percent) leads the performance so far, pulled notably by South Africa, Kenya, Mozambique, Swaziland and the Seychelles. At the same time, in North Africa (+5.9 percent), the two main destinations, Morocco (+9.3 percent) and Tunisia (+2.6 percent), have experienced somewhat different growth paces.

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Africa at large, with its growth in arrivals on more than 10.5 percent, this year is followed by the Asia-Pacific region, with a growth rate of 8.3 percent. Also Central and South America experienced a growth close to the double of the world average, while in North America, only the US saw decent growth as Mexico and Canada saw a slowdown of about 4 percent. In Europe, Scandinavia is "in", Mediterranean keeps growing, while the east is detracting. UNWTO is also fairly optimistic about 2007 and future trends. "The expected 4 percent growth for 2007, though slightly slower than in previous years, is much in line with the UNWTO long-term forecast growth rate of 4.1 percent a year through 2020," according to the report. Africa will still be among the winners in these medium and long term projections.

Everything seems to be breaking right for Angola just now. Angola is swimming in oil money. Last year’s oil revenue of $10.6 billion was almost double the figure from 2004.

A recent report by The Economist Intelligence Unit projects the country’s growth rate at 16.7 percent this year and 20.8 percent in 2007, making Angola’s one of the world’s fastest-growing economies.

The United States already imports 15 percent of its oil from Africa, mostly from Angola and Nigeria; that figure is bound to rise and could even double, eventually making Africa as large a supplier of oil as the Middle East now is.

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3 INVESTMENT OPPORTUNITIES IN TOURISM 3.1 Investment Sectors New investment is beginning to flow into Angola. In the first half of 2004, ANIP received 211 investment proposals, of which more than half (110) have been approved and are now underway. This represents a dramatic increase over the previous year when only 40 proposals were submitted in the first half of 2003. Private investment continued to increase in 2005. In the first quarter alone, ANIP received private investment proposals worth US$500 million. Investment has been particularly prominent in the construction, light industrial, commerce and services sectors, with only three percent of all new investment proposals received in the first half of 2004 falling into the hotels/tourism sector.

A shortage of hotels in the major cities and resorts in potential tourist destinations offers considerable opportunities for investors. The potential for other, non-business-related tourism is also good, with a range of natural resources and scope for beach and eco-tourism. In order to develop this potential, significant investment is required.

Priority tourism investment sectors have been identified as follows:

a) Hotel projects in Luanda and in the main cities in other provinces, mainly business-oriented;

b) Rehabilitation of national parks and access routes;

c) Roads, improved airports, water and electricity; and

d) Development of new leisure resorts and lodges.

3.2 Priority Investment Zones The rehabilitation of existing hotels, and the development of new ones, is a high priority in the country as is the expansion of the retail and commercial property sector. About half of the hospitality sector’s infrastructure needs to be revamped. Of 105 hotels of varying categories, only half are operational. These are all located along the country’s coastal areas.

The Ministry of Hotels and Tourism plans to construct 18 three-star hotels, one in each province of the country. Financing for the project would in part be guaranteed by the new line of credit provided by the Government of China. The Ministry will also focus on training hotel industry staff, with priority given to English and French language training.

The various national game parks and natural reserves also constitute hubs of attraction for investment in Angola while the 1,650 km. of coastline, with its natural sandy-beaches and excellent conditions for swimming and water sports, provide opportunities for investment in new resort hotels and lodges.

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4 INVESTMENT ENVIRONMENT 4.1 Investment Framework

4.1.1 Government policy All business activities are open to foreign investors, but there is need to get prior authorization from the Foreign Investment Agency or Council of Ministers. The new Private Investment Law (Law 11/03) not only reduces red tape but facilitates legal processes and provides a number of guarantees to private investors, such as guaranteed repatriation of capital.

4.1.2 Investment agencies ANIP is facilitating and encouraging private investments in Angola. ANIP is responsible for the implementation of the national tax incentive policy and for providing a direct channel of communications with investors.

ANIP approves foreign investments between US$100,000 and US$5 million. Foreign investments less than US$100,000 do not require ANIP approval. The Council of Ministers must approve investments over $5 million and any investment that requires a concession (such as oil or mining) or involves the participation of a parastatal. ANIP must assess and decide on an investment project within 15 days of receipt of relevant documentation. Through ANIP, the periods for evaluating investment proposals have been reduced to 15 days for investments of up to US $5 million, and 30 days for projects worth more than US$5 million.

ANIP also provides technical and legal assistance as well as conducting market studies for national and foreign investors to help identify investment opportunities.

4.1.3 Double taxation agreements Angola does not currently have any double taxation agreements.

4.1.4 Investment guarantees Angola is a member of the Multilateral Investment Guarantee Agency (MIGA) and the U.S. OPIC scheme.

Angola has signed bilateral investment agreements with Portugal, South Africa, the United Kingdom, Italy and Germany.

4.2 Investment Incentives Access to tax incentives is guaranteed for investments of at least $50,000 dollars by investors domiciled in Angola, and of at least $100,000 dollars by investors domiciled in other countries, regardless of the investor's nationality. Incentives are governed by criteria relating to the location of the proposed investment as well, with differing rates depending on where companies invest. There are three zones:

Zone A: province of Luanda, the capital-municipalities of the provinces of Benguela, Huíla, Cabinda and the Municipality of Lobito.

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Zone B: remaining municipalities of the provinces of Benguela, Cabinda and Huíla and Provinces of Kwanza Norte, Bengo, Uíge, Kwanza Sul, Lunda Norte and Lunda Sul.

Zone C: provinces of Huambo, Bié, Moxico, Cuando Cubango, Cunene, Namibe, Malanje and Zaire.

The following tax and other exemptions are available in respect of investment operations in the different zones:

Exemption from payment of customs duties and fees

Exemption from payment of industrial tax on profits

Exemption from payment of capital gains tax

Zone A 3 years 8 years 5 years Zone B 4 years 12 years 10 years Zone C 6 years 15 years 15 years Source: ANIP

4.3 Access to Finance Most local entrepreneurs have access to or own land or infrastructure, but suffer from a shortage of liquid assets and available cash. Foreign investors do not normally access credit locally, and local investors either self-finance or seek financing from non-Angolan banks and investment funds.

4.3.1 Commercial banks The commercial finance sector is under-developed in Angola, although there has recently been an influx of foreign banks, forming partnerships with local players. Private banks, particularly those from Portugal, have been rapidly entering a sector that was traditionally dominated by state banks. Two of the three major banks in Angola are privately owned.

The following are the major commercial banks operating in Angola: Banco Commercial Portuguese (BCP), Banco de Fomento Angola (BFA), Banco Sol, Banco Totta de Angola (BTA), Banco Africano de Investimentos (BAI), Banco Comercial Angolano (BCA), Banco de Poupanca e Credito (BPC), Banco de Comercio e Industria (BCI), FDES, Banco Regional do Keve (BRK), and Banco Espirito Santo Angola (BES).

4.3.2 Development banks

Commercial loans are difficult to access, and smaller enterprises utilize Government-funded facilities such as the Fundo de Desenvolvimento Económico e Social (FDES), which have a range of guarantee and start-up/working capital facilities, which are administered by selected local banks.

4.3.3 International Financial Institutions

Angola, as a signatory to the agreement between African, Caribbean and Pacific nations (ACP) and the European Union, known as the Cotonou Agreement, has access to the facilities of the European Investment Bank (EIB).

As a member of the World Bank, the facilities of the International Finance Corporation (IFC) would also be available for projects in Angola. Other potential development

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finance sources include the African Development Bank (ADB), the Development Bank of Southern Africa (DBSA), the Industrial Development Corporation of South Africa (IDC) and the New Partnership for Africa's Development (NEPAD).

4.3.4 Transfer of Capital and Profits Under the terms and conditions established by the Currency Exchange Law, investors can transfer distributed dividends and profits abroad after deducting legal amortizations and taxes due on them, in accordance with their respective shares in the equity of the corporation or business entity. They can also transfer the results of the liquidation of their investments (after paying any taxes owed), the results of compensations, royalties or other revenue obtained from indirect investments associated with technology transfer. Investors may also transfer any amounts owed them as stipulated in private investment agreements, following the deduction of any taxes due on them. Investments in diamonds, petroleum and financial institutions are covered by specific legislation.

4.4 Residential and Work Visas Valid passports and visas, required for all travelers except those in transit, are valid for 60 days. Visas can be extended, while in Angola, after 30 days. Business visitors require a letter of invitation from an Angolan company or an official entity. ANIP is able to facilitate the acquisition of residential and work visas for approved foreign investors.

4.5 Technical and Promotional Assistance Generic tourism promotion is undertaken, with limited resources, by the Ministry of Hotels and Tourism.

Angola is a member of RETOSA (the Regional Tourism Organization of Southern Africa) which, as the official tourism body for SADC, has been given the mandate to market and promote southern Africa in close co-operation with the region’s national tourism organizations, the private sector and the communities. The primary aim is to create a clear and recognizable brand identity that will enable the sub-continent to compete effectively within the global arena through coordinated marketing activities (including exhibiting at selected trade fairs worldwide, media and educational trade tours, information services, etc.).

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5 LIST OF KEY CONTACTS Ministry of Hotels and Tourism Mr. A. B. Capamba Largo 4 de Feveiro Palacia de Vidro, Luanda Tel: + 244 923 74 7803 Fax: + 244 2 310 629 E-mail: [email protected] National Private Investment Agency (ANIP) Agência Nacional para o Investimento Privado Rua Cerqueira Lukoki n.º 25, 9º andar, Luanda Tel: +244 2 331 252/391 434 Fax: +244 2 393 381 E-mail: [email protected] Website: www.iie-angola-us.org Câmara de Comércio e Indústria de Angola (Chamber of Commerce and Industry) CP 92, Luanda Tel: +244 2 344 506 or 344 541 Fax: +244 2 344 629 E-mail: [email protected] Ministry of Finance Ministério das Finanças Av. 4 de Fevereiro, 127 Caixa Postal 592 – Luanda Tel: +244 2 332 273 / 338 540 / 336 997 Fax: +244 2 332 069 / 396 843 Website: www.minfin.gv.ao (in Portuguese) Useful Websites: Angola Press (News Agency) www.angolapress-angop.ao

Angola News http://www.angolanews.com/

All Africa http://allafrica.com/angola/

Africast http://www.africast.com

Journal de Angola (in Portuguese) http://www.jornaldeangola.com/

World Bank http://www.worldbank.org

International Monetary Fund http://www.imf.org

African Development Bank http://www.afdb.org

ANIP - National Private Investment Agency www.iie-angola-us.org

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Southern African Development Community website contains useful profiles on SADC member states; http://www.sadc.int . The British Broadcasting Corporation (BBC): full profiles provide an instant guide to history, politics and economic background of countries and territories, and background on key institutions; http://news.bbc.co.uk/2/hi/country_profiles

Project Akwaba City© 2006

TIMETABLE* General Overview Project Timing The interest of the projects quality. Basic layout for general discussion will be provided in about 4 weeks Here is an ideal timetable: Detailed Timing Master Plan layout ~4weeks Infrastructure layout ~8weeks - pre-approval by authorities Master Plan finalizing ~24weeks - first infrastructure may start Hotel Preliminary Design Finished ~30weeks Approval Planning Finished ~50weeks Bidding/Detail Planning ~ this can be done in about 6 months Building of Hotel ~ this can be done in 2 to 2,5years Grand opening of the first phase can be at the end of 2009/beginning of the year 2010. A much more detailed Timing can be provided. Special events like elections or other important dates will be recognized when known. This Timeframe is a normal project processing.

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All Project Fee

All Project Fee are about 6% of the total Project cost. (the following figures are estimates for the proposed site ) Land purchase 5% Site works, infrastructure 4% roads/surface parking/landscaping Building construction 56% Special Systems 1% phone, security, internet, etc. Furniture, furnishings, equipment 16% purchasing costs Professional legal fees 6% Architecture, Engineering, Interior design, Etc. see sheet, Architects Fee. Pre-opening 2% cleaning, recruitment, training, etc. Working capital 1% Financing costs + interest 8% fees, interest during construction Miscellaneous contingencies 1% This data are part of the Non-Disclosure Agreement and confidential.

Below are construction cost of a few five star hotel in Luanda

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CONSTRUCTION OF FIVE STAR HOTELS IN LUANDA

The first short term priority is the construction of 5 star hotels in Luanda with the capacity of 400 to 500 rooms each including rooms complementary to hotel business. In effect there already exist available plots whose technical indicators are mentioned below: Plot situated in Avenue 4 of February in Sope da Fontaleza de S. Miguel Total Area: 28.700,00m2 Construction Area: 14.500m2 Number of floors: 3 to 7 floors Juridical Situation: Confiscated by the State through the decree no 43/76 Mode of Acquisition: Sale on Right to Area for 60 years extended according to the rule no 1/94 (juridical regime on the concession of plots in the province of Luanda) Value per square meter Equivalent to 80,00 USD Price: Equivalent to 2.296.000.00 USD Degree Affected: Some unlicensed constructions Type of Construction: Five star Hotels Plot in Gaveto between the Gomandante Gika Road and Avenue of the October Revolution. Total Area: 7,260,00m2 Construction Area: 2,034,00m2 Number of Floors: 11 floors Judicial Situation: Confiscated by the state through the decree no 43/76 Mode of Acquisition: Sale on Right to Area for 60 years extendable according to the rule no 1/94 (juridical regime on the concession of plots in the Province of Luanda) Value per square meter: Equivalent to 80, 00 USD Price: Equivalent to 580, 800, 00 USD Degree Effected: Some unlicensed constructions Type of Construction: 4 Star Hotels Plot situated on Conselheiro Aires de Ornelas Road (Road Axis) Total Area: 19,000,00 m2 Construction Area: 4,050,000 m2 Number of Floors: 11 floors Judicial Situation: Confiscated by the State through the decree no 43/76 Mode of Acquisition: Sale on Right to Area for 60 years extendable according to the rule no 1/94 (judicial regime on concession of plots in the Province of Luanda) Value per square meter: Equivalent to 187,57 USD Price: Equivalent to 3.563.830,00 USD Degree Effected: Foundation of the earlier Hotel Project Type of Construction:5 Star Hotels Plot situated on the INORADE road and Futungo de Belas (In front of the Costa do Sol Hotel) Total Area: 32.860,00 m2 Construction Area: 23.756,00 m2 Number of Floors: 3 to 7 floors Judicial Situation: Confiscated by the State through the decree no 43/76

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Mode of Acquisition: Sale on Right to Area for 60 years extendable according to the rule no 1/94 (judicial regime on concession of plots in the Province of Luanda) Value per square meter: Equivalent to 80,00 USD Price: Equivalent to 2.628.800.00 USD Degree Effected: Some precarious constructed houses Type of Construction: 4 Star Hotels Plot situated in the Avenue of the October Revolution (Close to the Airport -Left side) Total Area: 3,900,00m2 Construction Area: 1,456,00 m2 Number of plots: 7 plots Judicial Situation: Confiscated by the state through decree no 43/76 Mode of Acquisition: The sale on right to Area for 60 years extendable according to rule no 1/94 (judicial regime on the concession of plots in the Province of Luanda) Value per square meter: Equivalent to 80,000 USD Price: Equivalent to 312.000,00 USD Degree Effected: Some unlicensed constructions Type Of Construction: 4 Star Hotels Plot situated in the Avenue of the October Revolution (Close to the Airport- Right Side) Total Area: 3,9000,00m2 Construction Area: 1,456,00m2 Number of Plots: 7 plots Judicial Situation: Confiscated by the state through the decree no 43/76 Mode of Acquisition: The sale on Right to Area for 60 years extendable according to rule no 1/94 (judicial regime on the concession of plots in the Province of Luanda) Value per square meter: Equivalent to 80,00 USD Price: Equivalent to 312.000.00 USD Degree Effected: Some unlicensed constructions Type of Construction : 4 Star Hotels Plot situated next to the Museum of Slavery "Museu de Escravatura" There are spaces available in this plot for construction of tourist-hotel units, a type of inns and motels linked to cultural tourism, with view to utilize, the Museum of Slavery which was declared by UNESCO as World Heritage. Other Plots Besides these priority plots, there are other spaces that can be given on the same principle of the special regime of concession of plots for the promotion of tourism throughout the country. Other historic-cultural infrastructures with a strong national identity, with immense historic ethnographic patrimony, with emphasis on monuments and sites which depict the history of colonization and in particular the one related to the traffic of slaves along the whole coast, could be used in actions of investment for the rehabilitation.

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CONSTRUCTION OF THE VIP INTERNATIONAL HOTEL IN LUANDA

Luxury Hotel in Luanda The VIP International Hotel has invested approximately USD 93 million to build a luxury hotel in Luanda, Angola. The project includes a hotel with 300 rooms, 70 suites, an aerodrome on the rooftop terrace and a conference centre. This will be the Angolan debut of VIP International Hotels, the Portuguese hotel chain that will be managing the project. In Portugal, the hotel chain is present in Lisbon, Sintra and Ponta Delgada, in the Azores. The construction of the hotel is expected to start in January 2007 and be completed by the end of 2008. Source: ANIP

CONSTRUCTION OF THE NEW RESORT AT BARRA DO KWANZA IN 2008 A new resort will be built in Barra do Kwanza. The construction will take two years and the name will be “Forest Park Resort”. This project belongs to the company Artenge-Angola in society with the Hotel Fleuma, two Brazilians partners. The area of the resort will be of 25 thousand square meters. This complex will have 90 apartments and in each block a residential suite. 42 houses were also projected for this resort, three restaurants, two snack bars, a convention room for 400 persons and also a swimming pool with capacity for 200 persons. The project also expects to build a football field and a basketball field, as well as a tennis court and other football sand field. This huge resort it will be, according the managers of the project, very precious during African nations Cup, in 2010. Source: Jornal de Angola

AKWABA CITY-Tourism_Angola

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