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Overview

As one of the world’s fastest growing economy, Angola is set to become Africa’s next political and economic powerhouse.

For 27 long years Angola, embroiled in civil war, was cut off from the world of international diplomacy. But today, since the signing of the peace accord in 2002, Angola’s strategic, multi-lateral partnerships already extend across the globe.

The twenty-first century has heralded the dawn of a new era for Angola. The country’s oil wealth makes Angola particularly attractive to the international community.

Portugal maintains a strong diplomatic bond with its former colony, the United States of America considers Angola vital to its interests in Africa, and China now imports more oil from Angola than any other country in the world.

Norway, Japan, Israel and India are among a number of other states keen to cement their relationships with Angola.

Growing relations between Angola and the Bretton Woods institutions – the International Monetary Fund and 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) and Community of Portuguese Language Countries (CPLP) further testify to Angola’s commitment to its global and regional responsibilities.

Having consolidated internal peace and security, Angola is emerging as one of the most influential countries on the African continent.


Quick Facts

  • Oil accounted for almost 95% of Angola’s total exports in 2009.

  • Angola joined the Organization of the Petroleum Exporting Countries (OPEC) in 2007 and assumed presidency of the consortium from Algeria in 2009.  In 2010 the presidency was passed on to Ecuador.

  • Diamonds accounted for just over 3% of Angola’s total exports in 2009.

  • China was Angola’s largest export market taking over a third of all Angola’s exports in 2009.

  • Angola is now China’s largest producer of oil, overtaking Saudi Arabia and Iran in recent years.

  • In 2009, the U.S.-Angola Strategic Partnership was established shortly before a state visit from U.S. Secretary of State Hillary Clinton.

  • Portugal remains Angola’s leading supplier with 18% of imports originating from its former colonial master.

  • After years of mutual distrust, relations between the IMF and Angola were established in 2009 with the approval of a $1.4 billion Stand-by Arrangement representing the largest IMF financing package to date for a sub-Saharan country.

Major Exports 2009 % of total Major imports 2009 % of total
Crude oil 94.4 Consumer goods 58.9
Diamonds 3.2 Capital goods 28.9
Refined petroleum 0.7 Intermediate goods 12.2
Liquefied natural gas 0.7
Leading markets 2009 % of total Leading suppliers 2009 % of total
China 33.9 Portugal 18
US 24.5 China 16.8
France 8.3 Brazil 11
Brazil 6 US 8.2

Insight

Angola and China

Angola and China established formal diplomatic relations in 1983 with the first trade agreement in 1984.  China had been involved in Angola’s struggle for independence supporting Holden Roberto’s National Liberation Front of Angola (FNLA).

Relations between the China and the MPLA continued to grow throughout the 1990s as China provided significant military support to the government in its campaign against UNITA.

China maintains an embassy in Luanda while Angola now has consulates in Beijing, Hong Kong, Macau and Shanghai.

The 2002 Peace Agreement ushered in a new era for Angola-China relations.  Military assistance was replaced by financial and technical support as Angola began the enormous challenge of rebuilding its shattered infrastructure.

In 2003 the Forum for Economic and Trade Cooperation between China and the Portuguese-speaking Countries was established with the aim of promoting economic and commercial interests (the third Ministerial Conference for the Forum takes place in November).

In 2004 China pledged $2 billion in what would be the first in a series of oil-backed loans directed towards the reconstruction of roads, and the rehabilitation of hospitals, health facilities, and the education sector. By 2010 China had directed several billion dollars to Angola’s reconstruction effort.

Bilateral trade between China and Angola has grown considerably in recent years.  From $1.8 billion in 2000, by 2006 bilateral annual trade had reached $12 billion. Angola is now China’s largest trading partner in Africa.

Angolan exports – mostly oil – accounted for the majority of  trade.  But Chinese imports – including steel, cement and automobiles – make China one of Angola’s primary trading partners.

Foreign Direct Investment (FDI) from China is largely directed towards the oil industry but has expanded to other sectors of the economy in recent years, notably diamonds, agriculture and fisheries.

There are also signs that China is will direct substantial investment towards the estimated 35 million hectares of arable land. With China’s capital and technical expertise, Angola’s agricultural sector can return to its pre-civil war heyday.

Despite occasional disagreements, relations between China and Angola are likely to remain very strong.  Based on mutual cooperation and reward, China’s loans are free from political conditionality.

How relations between China and Angola evolve over the next few decades as both economies develop is yet to be seen.  The Angolan government is keen to maintain autonomy and escape dependence on any one country.

But China’s impact on the rebuilding of Angola’s infrastructure will hold an important legacy in the country for years to come.

Angola and the U.S.A.

U.S. Secretary of State, Hillary Clinton visited Luanda in August 2009 as part of an official African tour.   The trip highlighted Angola’s increasing strategic importance to the Western superpower.

U.S./ Angola relations are altogether more political than the largely pragmatic bonds between China and Angola.  This is ultimately based on the same premise – the thirst for oil – but the U.S. expects more from the Angolan government than energy security.

The U.S. Embassy in Luanda is clearly working towards a more holistic relationship with Angola including representatives from the Departments of State and Defence, and the Centres for Disease Control and Prevention.

The U.S. Agency for International Development (USAID) is very actively promoting rule of law and good governance initiatives.

A degree of mistrust lingers between Angola and the U.S. as America’s Cold War support of UNITA remains recent history.  Oil revenues have endowed post-war Angola with relative autonomy from international pressure.

The U.S. officially recognized the MPLA government in 1993 and relations have improved.  Alliance with Angola has enhanced U.S. naval presence in the Gulf of Guinea.

Security, stability and the relative lack of terrorist threat make Angola an ideal base from which to monitor the region.  Oil may dominate the U.S. agenda but good relations with Angola offer much more.

U.S. business interest is, for the time being, centered around the oil industry. Chevron was one of the first petroleum producers in Angola to drill onshore wells in the late 1950s and offshore fields in the mid 1960s.  Chevron remains Angola’s largest foreign oil industry employer.  More than 2,900 Angolan employees make up 86% of the workforce in the country.

The U.S.-Angola Chamber of Commerce, an independent organization dedicated to the promotion of mutual trade and investment between the two countries, was established in 1991.

In July 2009, the U.S.-Angola Strategic Partnership Dialogue was set up securing greater cooperation between the two countries.  2009 was, as Assistant Secretary of State for African Affairs Johnnie Carson suggested, “a year of new opportunities for U.S.-Angola relations.”

Despite political conditionality, Angola benefits hugely from U.S. involvement.  As China focuses on the country’s infrastructure, the U.S. is focusing on strengthening Angolan institutions and human capital.

One of the largest U.S. programs in Angola is the President’s Malaria Initiative.  Angola seeks to strengthen its ties with the international community and the U.S. will remain a critical partner.

Analysis

Angola and the Democratic Republic of Congo (DRC)

Angola and the Democratic Republic of Congo share a recent history of prolonged and bloody conflict.  Both countries have phenomenal mineral wealth which instrumentally  sustained their conflicts.  Their territories are expansive; the DRC is Africa’s 3rd largest country, Angola is 7th.  And both countries are inhabited by the Bakongo ethnic group.

Their histories are overlapping and complicated.

Post-independence Angola’s relationship with the DRC was strained.  But in 1997 when the Angolan military supported the overthrow of the DRC President, Mobutu Sese Seko and endorsed his replacement, Laurent-Désiré Kabila as President.

Angola and the DRC were to maintained close relations throughout the next decade.  The Angolan army supported Kabila’s government during uprisings in the country between 1998 and 2003, secured Kinshasa after the murder of Laurent Kabila in 2001 and supported the succession of his son, Joseph Kabila.

The borderlands between Angola and the DRC hold some of the most valuable diamond mines in Africa.  The shores off the DRC’s short stretch of coast separating the bulk of Angola from the Province of Cabinda are home to extensive oil reservoirs.  This is currently a site of intense resource competition.

The DRC is also experiencing unprecedented economic growth and, while it may continue to be marred by conflict on its eastern fringes, is now fiercely competing for the resources within territories claimed by both countries.

In recent years the population living in the region have been subjected to regular upheavals as both countries expel their opponents nationals.

Belgian and Portuguese officials representing the former colonial administrations have offered assistance in clarifying the original borders adhered to in the African Union (then the Organisation of African Unity) summit in Cairo in 1964 but tensions remain and territorial definition, both on and offshore, is unresolved.

A swift resolve of the situation is unlikely to occur any time soon.  Relations could continue to sour between two of Africa’s giants.  Angola’s handling of the territorial dispute will speak volumes to the international community about its ability to influence the stability of the region.