Focus on Angola - Part 1.jpg

Focus on Angola – Part 1

THE PORTUGUESE are returning to Angola following decades of guerrilla and partisan wars, writes The Resident’s reporter, Chris Graeme.

Earlier in the year, Portuguese Prime Minister, José Sócrates, led a delegation of key businessmen and potential investors to Luanda, the capital of Angola, to meet with the country’s Minister of the Economy and see how Portuguese firms could win contracts and help rebuild the country’s shattered infrastructure.

Last week, the Angolan Ambassador to Portugal, His Excellency  Assunção dos Anjos, spoke to businessmen on why it was safe to now invest in Angola. Organised by the Swedish-Portuguese Chamber of Commerce, with the participation of the Swiss, Finnish and Belgian-Luxembourg Portuguese Chambers of Commerce, the luncheon counted with the presence of the Swedish, Luxembourg and Belgian ambassadors.

In a keynote speech, which put political and diplomatic questions to one side and focused on economic issues and investment potential, Ambassador dos Anjos said Angola was becoming increasingly transparent and open to development and foreign investment.

With the fastest growing economy in Africa running at 18 per cent in 2005, thanks to 1.4 million dollars of oil being produced per day, the Angolan government is completely restructuring the infrastructure (roads, rail, water and sewage networks), and embarking on ambitious redevelopment programmes with the oil receipts, which is where Portuguese civil construction companies come in.

The Brazilians, South Africans and the Chinese are also competing fiercely both for reconstruction projects and the multibillion dollar offshore oil business and diamond resources (China is suffering from a chronic fuel shortage because of its rapidly expanding economy and consequent fuel needs), but the Portuguese have a natural linguistic and historical link with the country, spanning four centuries.

The Angolan Ambassador focused on five key areas:

•  Stability and development.

•  Socio-economic environment.

•  Most appropriate model of economic development.

•  The institutional role of the state.

•  Angolan national and foreign investment policy.  

Following decades of devastating and difficult wars, Angola has, in terms of stability, entered a new era.

Between 1961 and 1975, Angola suffered a 14-year war of independence followed by a guerrilla war between the Marxist Soviet-Cuban backed MPLA and the US-South African backed UNITA and FNLA.

At the height of the Cold War, the US was concerned about the ‘Trumanist’ domino theory in Africa, whereby states fell like dominoes into the communist sphere of influence; while diamonds and oil clearly played a key part in the superpower’s involvement.

After a declaration of independence from Portugal in 1975, South African troops invaded Angola’s southern half, fearful that her occupied interests in Namibia would be affected by the instability.

The Soviet Union and Cubans, aiding the MPLA, controlled the capital Luanda, while the US and SA backed UNITA fought for power against the communists. The MPLA sold off oil to pay for the ‘war’, while UNITA sold diamonds until, eventually in April 2002, UNITA leader Jonas Savimbi was killed and a cease power was agreed.

“Angola was caught between a struggle between East and West, for its economic potential and natural resources, its strategic position, and for ideological reasons,” said Ambassador dos Anjos. “I know that many businessmen need to be reassured that Angola will not return to its former instability and I can say, from a military point of view, absolutely not!”

There have been various peace accords such as the Luanda Accord in 1991 and elections in 1992, aimed at minimising the possibility of a return to war. There had been, for nearly 30 years, two armies at loggerheads – now there was only one.

“Our stabilisation programmes at a macroeconomic level have already begun with runaway inflation being brought under control. In 1996, in Luanda, we had inflation running at 3,000 per cent. By 2000, we had inflation at 219 per cent, 2001 – 116 per cent, 2002 – 105 per cent, 2003 – 75 per cent, 2004 – 31 per cent, 2005 – 17 per cent, and, by the end of 2006, it could be as low as 12 or 10 per cent.

The Ambassador concluded, in terms of stability and development, that now was ripe for the Portuguese and foreign investors to return to Angola as GNP growth rates had shot up from 3.9 per cent in 2000 to 5.1 per cent in 2001, 2002 – 13.2 per cent, 2004 – 11.2 per cent, and 2005 at nearly 17 per cent.

• Part 2 next week


If you want information on investing in Angola, contact the Angolan embassy to obtain a copy of its Private Investment Base Law. The embassy is located at Avenida da República, 68, 1050 Lisboa. Telephone: 217 827 460.