Angola: the sprint star starts to acquire abroad

The world's fastest growing economy 2001 – 2010 is now coming of age.

Over the past decade, Angola has grown faster than every other country, including China. This sub-Saharan African is an economic sprint star, according to The Economist which surveyed all countries with a population of over 10 million (excepting Afghanistan and Iraq). Angola grew economically by an average annual 11.1%. This compares to second placed China on 10.5%.

War against Portugal ended in independence in 1975, which was followed by internecine strife leading to open civil war, which concluded in 2002. Since 2005, the Angolan government has developed infrastucture and resttled dispaced people through the use of substantial credit lines from China, Brazil, Portugal, Germany, Spain, and the EU. Recent IMF financial support was agreed, provided Angola was disciplined about policy which will tighten government activity and make corruption harder. Debt relief and foreign aid have both assisted growth too.

Angola is huge. At 1,246,700 sq km in area, it's bigger than South Africa or Egypt, and more than twice the size of Texas. With 18.5 million people, about as many as Florida and more than Chile or The Netherlands, it ranks at 199th in the world in terms of population density at less than 15 people per sq km. Rapid urbanisation has occurred across Africa, and Angola is no excpeption with its capital of Luanda now accommodating 4.8 million inhabitants. A post-war baby boom is fueling growth but straining resources.

In 2006 Angola joined OPEC, being the world's 16th biggest oil exporter, and 15th in terms of petroleum reserves. Major exports include crude oil, refined petrol products, diamonds, fish, timber, coffee, sisal and cotton. The country imports mechanical finished products such as machinery and electrical equipment, cars, trucks and parts. Food, textiles, medicines, and military hardware are also imported.

Angola is projected to grow more slowly in 2011, although by a respectable 7%, according to The Economist. However, the country doesn't figure in the IMF's top ten list for the years 2010-15, unlike seven other African lions who do. Top performing African is predicted to be Ethiopia, which follows in third place behind more distant China and India in IMF's list. 

And Angola may be hindered in future by political uncertainty. The MPLA government (who won the wars) might suffer, should rumoured ill-health beset 68-year old José Eduardo dos Santos, leader and President since 1975. No obvious successor has been groomed, it appears, as The Economist reckons any such loss would leave a “power vaccuum”. Corruption is a notable issue, as is inflation which although reduced from a humungous 325% to a current 14%, has stuck at that level as the Luana government has struggled to reign it in further. Against this, the devaluation of the currency, the kwanza, has boosted exports – driven in the main, as we know, by demand for oil and diamonds.

Like Mozambique, this is a Lusophone nation, and the meteoric economic rise of Brazil will placate any lessened demand from France and Portugal. In any event, China is the principal export market, followed right now by the US.

As Princess Diana's 1997 highlighting of the post-war landmine issue reminds us, the clean-up will be long and expensive. It needs time, but Angola's ability to see this through to fruition without further dislocation is uncertain, which means that it has a precarious future. 

Unthwarted, the first ever Dublin-held Africa-Ireland Economic Forum was the venue at which Irish Foreign and Trade Minister Eason Gilomre praised Angola for its impressive growth. He was right to pinpoint this country, which The Economist alerts is now role reversing with ex-colonial power Portugal.

Angolan state and private investors are perusing Portuguese assets. So far Angola’s Banco BIC has agreed to spap up Portugal’s Banco Português de Negócios (BPN). And Sonangol, the Angolan oil company, has a minority 12% stake in Millennium BCP, a Portuese bank. Sonangol is looking looking also at GALP, a Portuguese energy concern, while it has already bought shares in ESCOM, an Africa-centric mining and property firm owned by Portugal’s Espirito Santo group.

Watch this nation for it has huge potential, but can it sustain this pace? The Australian Department of Foreign Affairs and Trade predicts it can this year at least, as Angola adds another economic growth spurt of 7.8%.

Should South Africa descend into political infighting, maybe Angola will find itself the new southern African regional engine of growth. If Portuguese professionals and tradespeople are now seeking work in Luanda, which they are reported to be doing in droves, then perhaps there's reason for considerable optimism.

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