This country profile was published in November 2008 in our annual 'Africa in 2009' issue. The next edition, 'Africa in 2010' will be on sale 23 November 2009.

Click on the drop-down menu above to see Angola's Top Companies, Top Banks and a list of government ministers.

A promising consequence of the polls has been an easing of tensions. The Movimento Popular de Libertação de Angola (MPLA) predicted that there would now be “friendly” relations with the parliamentary opposition. Having won 81.6% of the votes, against UNITA’s 10.4%, the MPLA could afford to be magnanimous, even if it was not at all pleased with allegations that it had drawn on state resources to fund its campaign.

The MPLA’s showing in the polls seems likely to encourage President José Eduardo dos Santos to announce his candidature for the presidential elections which are due during 2009. Such a decision would certainly help to legitimise his position, which for the last 16 years has depended on the fact that he scored more votes than Savimbi in the first round of the 1992 election. It is clear that the next election will need to be better organised than the legislative polls, when the voting materials were not delivered on time, even in Luanda, causing interminable queues and discouraging some voters from participating.

Having promised to reduce wide social inequalities, the MPLA will have its work cut out to improve resource management and to restore credibility to public life. The party owes its victory at least in part to the fact that UNITA was still paying the price for being seen as responsible for the prolongation of the war, but the more time passes, the less the war can be used as an excuse for failures in the provision of social services. Angolans are well aware of the wealth of their country and yet infant mortality stands at 26% and life expectancy is 41.7 years.

Another challenge for the authorities is the reduction of regional economic imbalances. In 2006, Luanda’s per capita GDP was 17 times higher than that of Bié Province. The investment code grants favourable conditions for projects in outlying regions but there will need to be further initiatives if people are not to feel ignored. In the legislative elections, the MPLA scored lowest in the distant Lunda provinces, where the small Partido de Renovação Social managed to score its best results.

Thanks to high oil prices and increased production, economic growth has continued to soar, surpassing 20% in 2007 with the World Bank forecasting 26% growth in 2008, although the volatility of oil prices will affect the final outcome. Oil is responsible for more than half of Angola’s GDP and 95% of export revenue. With the threat of global recession, Angola’s outlook may be somewhat less euphoric when it takes the presidency of OPEC in 2009.

Another uncertainty is the level of production Angola can maintain, having already reached 1.9m barrels a day (b/d) in 2008, allowing it to become Africa’s largest producer when it briefly overtook Nigeria. The previous intensity of exploration has not been maintained and offshore fields that are being developed are unlikely to bring the total much higher than 2m b/d before an anticipated production decline sets in from about 2015. The quantities being brought onstream include 100,000 b/d from Exxon’s Saxi-Batuque field and 40,000 b/d by Shell from Block 4, with expectations of 125,000 b/d from Chevron’s Tombwa-Landana field in the course of 2009.

Oil production should be complemented by liquefied natural gas from 2012, and the state-owned diamond company forecasts a boost in production from 10m carats in 2008 to 19m carats in 2009. New legislation will allow foreign companies to take majority stakes in mining projects and the authorities have long-term hopes for iron ore mining at Cassinga and Cassala Kitungo.

The country’s hydro-electric potential could attract high investment. In 2006, Norsk Hydro first expressed interest in developing a 600,000-tonne aluminium smelter requiring 1,635 MW. With national hydro-electric potential estimated at 18,000 MW, the state-owned Empresa Nacional de Electricidade has outlined plans for a more commercial and transparent operating environment while the government says that projects on the Kwanza River could enhance capacity by 6,500 MW at a cost of $7.3bn between 2009 and 2016.

Non-extractive economic activities have seen good growth, having risen by 22% in 2007. In the long-ignored agricultural sector, new projects are being announced on an almost daily basis and the potential is enormous; the country has 60m hectares of arable land. In the course of 2009, there are strong expectations of a cotton revival in Kwanza Sul on the back of a South Korean line of credit.

The construction sector has seen unprecedented expansion. Thousands of kilometres of roads are being built and, starting in 2009, new ports are to be built in Luanda, Lobito, Cabinda and Porto Amboim. Other projects include the Soyo and Lobito refineries, an airport at Bom Jesus (financed by China’s Exim Bank) and 700 buildings to be put up by Chinese firms at a cost of $3.5bn. Bulldozers are preparing for the construction of stadiums for the African Cup of Nations football tournament in 2010. Angolans also await the realisation of a presidential promise of 1m new homes by 2013. In addition to the Chinese investments, some $4bn in credit has been made available by German, Brazilian, French, Belgian and Spanish banks.

Even though its social divisions look like they may take decades to overcome, Angola has the raw assets needed to win the development battle. The country is already beginning to relish becoming an increasingly important regional power. It cooperates militarily with both of the Congos, is active within the AU’s Peace and Security Council and has provided police for the peace operation in Central African Republic. On the economic front, its state enterprises act like sovereign wealth funds, having taken shares in Portuguese banks and other institutions, and they are extending their interests into bauxite mines in Guinea-Bissau and a refinery in Côte d’Ivoire.

Turning the tide of Luanda's pollution

 

When its current facelift is completed, Angola's overcrowded capital will be able to show itself off as one of the main beneficiaries of the country's oil boom. After a first phase of terracing and cleaning up the magnificent but polluted Luanda Bay, work will start in earnest on the development for the Luanda Bay Waterfront.

One of the biggest urban development schemes in the country, costed at $2.13bn, the project involves building homes, offices, commercial centres, hotels and leisure complexes. In the process it will completely transform the look of the Bay, especially the famous Avenida Marginale, which follows the coastline. It will be widened and planted with lawns and green spaces.

According to the South African consulting firm Vela VKE, which developed the concept, the principal objective is to have a significant impact on Luanda's central business district by cleaning up sewage-contaminated sediment in the Bay and dredging circulation channels which will be navigable by small craft. This will assist in combating the recurring pollution of the Bay by the spillage of sewage from the city. The dredged material will be used to reclaim land by extending the shoreline along the Marginale.