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Located on the West coast of Southern Africa, Angola is the seventh largest country in Africa with a population of just under 20 million. Tropical rainforests spill over from the Democratic Republic of Congo into the north- eastern fringes of the country, while the haunting skeleton coast and Namib Desert stretch south into Namibia. Angola displays within its borders the contrasts that characterize the African continent.

In the ten years following the cessation of civil war Angola’s economy has increased ten- fold. The International Monetary Fund predicts Angola’s gross domestic product to reach more than $122 billion in 2012 making it Africa’s fifth biggest economy.

Politics

President José Eduardo dos Santos, who has held office since 1979, won the 2012 elections convincingly by over 70% of the vote. Angola’s political landscape may however start to change during the president’s next term during which he is expected to name his successor as leader of the MPLA. While the party is likely to remain firmly entrenched in government a new cadre of young, western-educated politicians is quietly pushing for political reform.

From War to Growth

The war-zone President dos Santos inherited from Angola’s first president, António Agostinho Neto, has been transformed into one of the world’s fastest growing economies. Fuelled by Angola’s rich endowment of mineral resources economic growth of 8% is forecast for 2012.

Industries in Angola

Angola’s extractive industries sector, dominated by oil and gas, accounts for just under half of the total GDP. Dependency on the oil industry has left the economy vulnerable to international oil price fluctuations and accounts for the large discrepancies between annual growth rates – from 20.6% in 2005 to 0.2% in 2009.

Angolan Oil

Oil was first discovered inland in 1955 in the Kwanza basin near Luanda. But it wasn’t until the late 1960s, when the offshore Cabinda reserves were discovered, that the oil industry took off. By independence in 1975, oil had overtaken coffee as Angola’s leading export.

Exploration and production steadily increased throughout the 1980s. In the 1990s international oil companies reported major discoveries in the deeper waters further off the coast. Following the end of the civil war in 2002 production soared to almost 2 million barrels a day making Angola the second biggest oil producer on the continent after Nigeria.

The oil industry is dominated by the upstream sector – exploration and production of crude oil and natural gas. The downstream sector – refinery and distribution of the products derived from crude oil – has until recently remained underdeveloped. However, the recent completion of one of the continent’s largest ever construction projects, Angola LNG (Liquified Natural Gas), demonstrates the country’s commitment to developing the downstream industry.

Mining

Angola is already one of the largest diamond producing countries in the world though its exploration potential remains enormous. The largest mine in Angola, the Catoca Kimberlite Diamond Exploration Project, posted gross revenues of $611 million in 2011 from the sale of 6.7 million carats of diamonds.

As the industry grows Angola has started processing its diamonds domestically. Angola Polishing Diamonds Initiative, based in Luanda, is reported to be polishing raw diamonds worth approximately US$20 million each month for both the growing domestic market and export markets.

Investment in Industry

Efforts to diversify beyond the petrochemical sector are starting to bear fruit. The agricultural sector, providing approximately two thirds of all employment in Angola,

now accounts for 10% of GDP. The country holds some of the most fertile lands on the continent. Its diverse ecology provides an environment capable of hosting a rich variety of crops and livestock.

Investment in the bio-energy industry over the coming years could see Angola’s agricultural sector contributing significantly more to the country’s wealth. The country

is reported as having a bio-fuel export potential of approximately 6 exajoules – the equivalent of 2.7 million barrels of oil per day. Several international energy companies are already investing in major bio-fuel projects in the country.

 

Construction

The construction sector, as evidenced by rapidly changing city skylines and the reparation of the country’s road and railway network, now accounts for just over 8% of GDP. Angola has one of the highest rates of urbanisation in Africa. The subsequent demand for low-cost housing is enormous prompting President dos Santos to promise the construction of one million houses upon re-election in 2008.

 

Numerous international firms are taking advantage of low customs duties for construction materials designed to encourage housing projects. Luanda lies at the heart of the staggering construction boom though other provincial capitals, such as Huambo, Soyo, Lobito and Benguela have started to follow suit.

 

As infrastructure throughout the country is redeveloped Angola’s tourist industry is finally re-emerging. 84 hotels have been built since 2008. An Intercontinental hotel is due to open in 2014. National Parks are being repopulated in a bid to attract more visitors. According to the Ministry of Hotels and Tourism, the government has set a goal of 4.6 million tourists by 2020.

Based on similar Chinese and Brazilian models, Special Economic Zones (ZEEs) are now being established throughout the country. Coordinated by the National Reconstruction Office and split evenly between industrial and commercial areas, the Special Economic Zones are designed to give Angola’s manufacturing, technological and financial service sectors a boost.

 

The “ZEE” project, which was first conceptualised in 2004, is based on a model that proved successful in Brazil and China. The 8,300 hectares of land are arranged in a circle, the circle is divided into segments each of which houses a particularly industry for example paint, plastic, piping, fencing, fibre optics, wiring, concrete, wood processing and even mattresses and light switches.

 

Foreign Investment

Exposure to the outside world has increased vastly in the past decade. Bilateral trade between China and Angola has grown from $1.8 billion in 2000 to almost $28 billion by 2011. Angola is now China’s largest trading partner in Africa. There are believed to be almost 260,000 Chinese residents working in Angola, the vast majority of whom are working in construction.

Portugal maintains a strong diplomatic bond with its former colony and the United States of America considers Angola vital to its interests in Africa. Norway, Japan, Israel, India and the United Kingdom are among a number of other states keen to strengthen their relationships with Angola as trading partners. The United Kingdom is now the second largest investor in Angola with annual investments of over $3 billion.

 

International Organisations in Angola

Growing relations between Angola and the Bretton Woods Institution – the International Monetary Fund and The World Bank – demonstrate the country’s dedication to serious engagement with the international community. Membership of The World Trade Organisation (WTO), The Organization of the Petroleum Exporting Countries (OPEC), South African Community for Development (SADC) further testify to Angola’s commitment to its global and regional responsibilities.

Education

The education of Angola’s post-war generation is the single most important investment towards the country’s sustained development. Beginning at the age of 6, primary school lasts for 8 years. The first 4 years are free and compulsory. Secondary education lasts another 3 years for general education and 4 years for vocational and technical education students.

27 years of conflict severely damaged the country’s education infrastructure. With the backing of international institutions, foreign investment, and local and international NGOs, the Angolan government is rehabilitating the entire education infrastructure. Thousands of schools are being rebuilt countrywide, curriculums are being revised, and teachers are receiving high-quality training. This process will ensure the success of Angola’s future generations of men and women.

According to the Vice Minister of Education for Social School Action, General and Special Education, Ana Paula Inês, at least 242,979 teachers have been introduced to the education sector over the past four years in Angola.

Minister of Higher Education, Science and Technology, Maria Cândida Teixeira announced at the Conference of Higher Education that 2012 has seen 45,000 new Angolan students entering higher education bringing the total figure to about 195,000.

Under decree-laws 20/823 and 17/09 ‘Angolanization’ – employing and training Angolans to replace expatriate workers- is an obligation for companies engaged in the oil and gas sector.

Decree-law 17/09 enacted on 15 February 2011 by the ‘Contrato Programa’ introduced codified targets and a new system of recruitment, integration, training and development of Angolan staff in the oil industry and the hiring of foreign personnel to the oil operations.

US $0.15 from every barrel of oil produced in Angola is ring fenced for human resource development. Of these 15 US cents, nine go to Ministry of Petroleum MINPET and six are used by the oil majors for staff training. Out of the nine US cents that go to MINPET, three are for university funding. One US cent of every barrel goes to the Angolan state university, Universidade Agostinho Neto (UAN), and one per cent of the university funding has been transferred to the Catholic University of Angola (UCAN) to develop courses relevant for the petroleum industry. It is not always clear what happens to the money transferred once it reaches the universities.1

The ‘Contrato Programa’ is an annual personnel training development and progression plan that the oil companies have to submit to MINPET for approval (for each staff member). Each plan includes training and skills targets. The companies can choose providers and the type of training.

Examples of efforts to up-skill Angolans and diversify away from the petrochemical sector include the Special Economic Zone in Viana (ZEE) which is expected to create two million indirect jobs and marks significant progress in Angola’s development and an important step towards self sufficiency.

1Our thanks go to Emanuel Gomes and Markus Weimer at Chatham House for some of the information contained in this section.

Please see www.chathamhouse.org for the full report.

 

 

 


Overview

Area: 1,246,700 sq. Km
Capital: Luanda
Population: 19,618,432 (2011, World Bank figure)
Luanda Urban Population: 4,500,000
Geography Angola’s terrain consists of a narrow coastal plain which rises abruptly to a vast interior plateau.
Climate: Angola’s climate is semiarid in the South and along the coast as far as the capital city of Luanda. The North of Angola has a cool dry season (May to October) and a hot rainy season (November to April).
Natural Resources Angola is rich in natural resources such as petroleum, diamonds, iron ore, phosphates, copper, feldspar, gold, bauxite and uranium.
Dial Code: 244
Currency: Kwanza (Kz)
GDP US$ 101 billion (2011)
Language Portuguese (official)
Ethnic Groups Ovimbundu 37%, Kimbundu 25%, Bakongo 13%, mestiços 2%, European 1%, other ethnic backgrounds 22%.