Interviews

“Judicial reform is a major turning point for Albania”

FIAA: What is your perception of the Albanian economy currently?

Mr. Reinke: We have been saying for some time that a modest recovery is on the way. We see growth rates rising slowly — perhaps a bit too slowly — but nonetheless the outlook is positive. We remain somewhat concerned about the still high level of non-performing loans in the banking sector and very slow credit growth.
If we look at the performance of the economy in a regional and global context, it’s doing quite well. Both the recovery in the Eurozone and the current performance and outlook for emerging markets globally are much worse than we were expecting at the beginning of Albania’s programme with the IMF. Nonetheless Albania is continuing to recover. It is a broad-based recovery affecting all the sectors.

“The BoA expects Albania’s growth trend to continue in 2016”

 FIAA: What are current economic indicators telling you about the state of the economy in Albania?

Mr. Sejko: Economic growth was 2.98 % in the third quarter of 2015. Our estimate of growth for the full year 2015 is 2.7 %, compared to 2.0% in 2014 and 1.3% in 2013. For 2016 we forecast growth above 3.0%, which means a moderate growing trend. This is positive for Albania, especially considering the current difficult economic environment in the region and the eurozone.

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“EBRD plans further support for foreign investors in 2016”

FIAA: How do you see the outlook for Albania in 2016?

Mr. Denk: We think that the economic outlook for Albania will continue to improve steadily in 2016. Overall we expect the economy to grow by around 3.3% in 2016, up from 2.2% in 2015.

“Tirana Economic Council a Forum which will discuss municipal decisions will be established in October”!

FIAA: How do you plan to improve the operating environment for business in Tirana?

Erion Veliaj: With the central government and some international partners we have started to work on a development plan for the city that will emphasize not only urban planning issues but also economic development, social regeneration, infrastructure and more. This will be our starting point as regards improving the operating environment for business in Tirana.

We can definitely improve the ease of doing of business in the city. I was shocked when I saw people waiting in line in our tax office—these are people waiting in line to give the municipality money. Doing business in this city should be easy in terms of procedures; we should reduce the number of hoops that businesses have to jump through. I have ordered a review of our policies and procedures so that we can slim them down.

Vodafone Albania Chief Executive Officer and FIAA Vice President

“We will continue investing in new technologies in Albania”

FIAA: How is Vodafone performing in Albania?

Dietlof Mare: Vodafone is showing a strong performance on both revenue and EBITDA results for this year. Such performance has driven us to continue investing in technology and network expansion across Albania. This year alone we are investing €25 million. The outcomes of all our efforts have been translated into a very positive take-up of new technologies such as 4G and M-Pesa and into a strong positive usage among customers and growth in the average revenue per active user. In less than three months since the launch, 6% of our data traffic is routed through our 4G network. This uptake has been faster than any European country where Vodafone operates.

Our attention has also been focused on cost efficiencies, because in order to keep such strong performance there is always need for focus and cost discipline. I am proud to say that we are still able to maintain very healthy EBITDA margins although we are operating in a highly penetrated mobile market.

“Albania still holds the greatest potential in oil, gas and electricity and necessary reforms are being conducted”.

FIAA: We believe the Ministry of Energy and Industry is planning a hand over some more concessions in oil, is that right? And what is your expectation for the development of the sector from here baring this in mind?

Mr. Gjiknuri: Albania still holds great potential for oil and gas that is what we believe in and that is what the geological historical data shows us. We do have oil production and we are intending to give the free blocks to potential international oil and gas companies which are interested to explore, and we have opened some blocks for auctioning and we hope that by the end of the summer we close the first two blocks and we will continue with the rest of the blocks in onshore and offshore. Our intention is to bring the best companies which have the expertise and the capital and are ready to invest in the exploration of hydro carbon potential in Albania. So, basically if you ask me what would be the intention, I would say that I hope we will have some good companies which will be really investing, not like in the past where mainly unknown companies, which maybe were created for a specific project and to trade in the stocks, they were sitting on it and not investing.

“The best path that the government has to pursue is to align this legislation to the EU Acquis”.

FIAA: Shall we start it with a few words about Titan?

Mr. Frantzis: Titan is a multiregional cement producer. We are vertically integrated in cement aggregates and red mix. We say multiregional because we are not multinational in the strict sense having presence in every country. We are present here in Southeast Europe and we are the biggest cement producer in Southeast Europe having presence in evry country like, Greece, Bulgaria, FYROM, Kosovo, Serbia, Montenegro and Albania. We are also present in Turkey, Egypt and the US where we have a large cooperation along the east coast. Also we have terminals in Italy, France and UK. We have revenues above 1.2 billion euro and we employ in total over 7000 employees. Back in 2010, we decided to invest in Antea building a green field plant here in Albania. This investment has been realised with the equity contribution of international financial corporation IFC and EBRD which they held at the time 40% of the equity and 60% Titan. The 200 million euro investment at the time was and I think it still is the biggest green field investment in Albania.

Clarifying the legal framework can drive investment in Albania

FIAA: How would you describe the investment climate in Albania for foreign investors?

Mr. Pedrazzi: A lot of improvements have been made in the past and the situation is evolving positively. Nevertheless, there is still a lot to do in order to make Albania more competitive and able to attract more foreign investment that is crucial for the country. The common point of interest both for FIAA members and for the institutions is clear: We have to work together to make further improvements.

What are the top priorities for improvement?

One competitive advantage in Albania is the low cost of labour compared to other countries, especially as far as manufacturing and services are concerned. Albania should put in place the conditions that enable foreign investors to further develop manufacturing and services. We need a clear and stable legal framework and an environment that ensures the fair application of the law. This is the point on which we have to work together with the institutions. The rule of law is key.

Government reforms will ease doing business in Albania

FIAA: What was the most important outcome of the Albania Oil & Gas Summit 2015, held in Tirana in March?

Mr. Ahmetaj: The summit brought many important oil and gas companies to Tirana and presented to them the opportunities that Albania offers. As I mentioned in my speech at the summit, 54 % of the territory is unexplored which means new investment opportunities in our country for interested investors. These companies are able to bring their expertise and technology to Albania and if we give a considerable number of concessions, we will reach the necessary capacities in 10-15 years. I believe that this is the right moment, because Albania has entered into a phase of reforms aimed at the revitalisation of all sectors of the economy, including the oil and gas sector.