Guilhermina Simoes, a manager at Banco Bic SA in Angola, sat on a stool in the midday heat with a knapsack as she planned to camp overnight and beat the Monday morning crowd to buy a new apartment.
“I’m not leaving until my application is submitted,” said Simoes, a 30-year-old mother of three and a graduate of the country’s Agostinho Neto University. “It’s not a question of choosing where to live, it’s a question of opportunity. There’s nothing else.”
Simoes is among middle class Angolans willing to line up for days to find new homes to escape their rundown neighborhoods in Luanda, the capital of Africa’s second-biggest oil producer after Nigeria. Thousands of people wait for 1,200 application spots a day at Kilamba, a new Chinese-built city of 5,400 hectares (13,300 acres), while other sites at Cacuaco, Capari, Kilometer 44 and Zango are also filling up.
Angola, where a 27-year civil war ended in 2002, is rebuilding with the help of Chinese loans backed by oil output of more than 1.7 million barrels a day from offshore fields operated by companies such as Total SA (FP) and Chevron Corp. (CVX)
The government’s decision on Feb. 5 to cut the prices of bigger apartments to a maximum of $190,000 from $200,000 and smaller ones to $70,000 from $125,000 sparked a flood of applications. Before that about 30,000 units in five suburbs of Luanda, home to more than five million people, stood empty for more than a year because Angolans couldn’t afford them.
“Eleven years after the end of Angola’s civil war, we are seeing the beginnings of an emerging middle class in Luanda,” Lucy Corkin, a sovereign risk analyst at Rand Merchant Bank in Johannesburg, said March 7 in an e-mail. “The challenge is that Angola’s social and physical infrastructure is currently not yet properly equipped to deal with their demands in terms of goods and services.”
Luanda is plagued by power outages several times a day and almost constant traffic jams around dusty and garbage-strewn slums. The nation is trying to build up agriculture to reduce imports and feed a country that was the world’s fourth-largest coffee producer before independence in 1975.
Before coming to Kilamba on March 3, Simoes spent a week gathering the necessary documents, such as her tax-payer number, national ID and social security card. She also needed a letter from her employer proving she earns $1,500 a month to qualify for a $600 per month rent-to-own plan to buy an $80,000 three- bedroom apartment.
With an annual per capita income of $5,681, according to the International Monetary Fund, Angola ranks seventh in sub- Saharan Africa, ahead of countries such as Nigeria and Kenya. The United Nations said in 2011 that 54 percent of its people still live on less than $1.25 a day.
Angola forecasts 7.1 percent economic growth this year after 7.4 percent last year and an average expansion of 9.2 percent over the past five years, according to government budget documents. The country depends on oil for approximately 40 percent of its total output and 70 percent of government revenue, according to the IMF.
“Though small as a percentage of the general population, Angola now has an emergent, increasingly articulate middle class expecting the benefits of peace and oil prosperity to flow to them,” Ricardo Soares de Oliveira, a lecturer in comparative politics at Oxford University, said by e-mail.
“I want to stop living in my neighborhood in central Luanda because it’s a like a ghetto,” said Nelson Dias, a 38- year-old computer engineer with Empresa Interbancaria de Servicos SA, who’s also seeking an apartment at Kilamba. “This place is organized, it’s a real city.”
Traveling south from Luanda on a new highway, Kilamba’s apartment blocks rise from the countryside foliage, each neighborhood a distinct color, such as blue, green and yellow. The pristine roads, sidewalks and parkland inside are also like almost nothing else in the country.
“I like living here because it’s comfortable and it’s a good place for children with lots of space to play,” said Claudia Patricia, 30, a four-month resident of Kilamba with her husband and two children. “It’s clean and quiet.”
"You’ll see us doing similar things that we’ve done with Country Road and Trenery. We are excited, in particular about Witchery in SA, as well as Australia. It’s becoming more fashion forward, targeting a younger customer, somebody who is looking for a slightly smarter, sexier, more glamorous look. We think that fits well in our portfolio because we don’t have any meaningful offer of that type of merchandise at this point and at those price points.
"We think it will get particular traction with the Gauteng customer, and in particular the younger black customer," said Ms Disberry.
Country Road? Woolworths’ 88%-owned subsidiary, concluded the acquisition of 40-year-old fashion retailer Witchery Group from Gresham Private Equity for A$172m (R1.6bn) in October.
"You will see us putting them in Woolworths ‘big white box’ as we do with Country Road and hopefully stand-alone stores," Ms Disberry said. It is expected that Woolworths will launch the brands in South Africa in a year. Over the past five years Woolworths has made big shifts in its clothing business in a bid to get the right product, in the right place, at the right time and at the right price.
The company has invested a significant amount of money in an end-to-end suite of systems, and has built functional skill in its business by establishing a merchant academy where its buyers, planners, technologists and designers are trained. It also uses customer data to segment merchandise and plan the layout of its stores.
"Customers are seeing a very different product from us, but at the same time it’s driving profitability," said Ms Disberry.
The firm’s procurement strategy has allowed it to shorten lead times, as it focuses on a fast-response model — amid international retailers such as Zara expanding in South Africa.
The group head of design, sourcing and technology for clothing at Woolworths, Darren Todd, said: "We still have a very strong presence here in SA from a manufacturing perspective, but what we’ve done is identify centres of excellence in China, Bangladesh, India, Madagascar and Mauritius — our journey offshore has been about identifying innovation and differential product."
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