Angolan industries were hit hard by years of civil war, stretching from 1975 to 2002, that broke out upon the country gaining independence from Portugal. However, since the end of the conflict, the country has been rebuilding its infrastructure and raising its profile on the international trade map. Angola’s booming oil and gas industries are by no means its only assets – other sectors are growing in prominence, as the Southern African Development Community’s (SADC) recent review shows.
Industry
The industrial sector was devastated by the departure of the Portuguese and the civil war. It is being restructured to meet international standards and there are large investment gaps. Industries include cement, basic metal products, fish processing, food processing, brewing, tobacco products, sugar, textiles and ship repair.
There is potential to significantly expand food processing and light industry with an infusion of capital, technology and training. The government also plans to privatise some of the state-run enterprises.
Industrial development projects include the construction of pharmaceutical plants in Luanda, Benguela and Dondo; the rehabilitation of the Somar fish processing factory in Namibe; and the installation of a television assembly line. There are also plans to expand the Luanda steel complex, build a shipyard and seaport in Cabinda province, create a local assembly line for military trucks, and build a brewery. Some 15% of the workforce is engaged in industry and commerce, and 6% in services.
Agriculture
Agriculture contributes 9.6% to gross domestic product and 85% of the workforce is engaged in agriculture. Small-scale agricultural production has increased dramatically during the past three years as internally displaced persons return to the land. Some efforts at commercial agricultural recovery have been successful, notably in fisheries and tropical fruits, but most of the country’s vast potential remains untapped.
Angola’s highlands boast some of the richest agricultural land in the world but only 3% of its eight million hectares of arable land is under cultivation. Coffee, bananas, timber, tobacco and sunflowers are Angola’s main crops. Coffee production, though a fraction of its pre-1975 level, is sufficient for domestic needs and some exports.
Under a new agricultural strategy, the government has removed most price controls and has set up a rural credit programme to assist farmers. Recently passed land reform laws attempt to reconcile overlapping traditional land use rights, colonial-era land claims and recent land grants to facilitate significant commercial agricultural development.
The government has submitted a plan to the International Coffee Organisation to overhaul the sector in a two-year period. Under the privatisation programme, the government plans to liquidate all 33 state-owned coffee companies and invite international investors to bid for the largest plantations.
Fisheries
The fishing industry prospered in the south-western provinces prior to independence. An attempt is being made to rehabilitate and modernise this industry. The fishing fleet is being rebuilt through donor assistance. Refrigeration facilities at the southern ports of Tombwe and Namibe have been overhauled and a new production line at the Tombwe canning factory has been installed with EU assistance. Fish prices have been deregulated to encourage development, and the government, with assistance from the World Bank, has set up the Angolan Support Fund for Fisheries Development. The fishing sector continued to attract foreign investment during the civil war, but its full potential has still to be realised.
Forestry
Natural forests which have yet to be exploited, as well as plantations of eucalyptus, cypress and pine, which once formed the basis of a small export industry, add to a rich agricultural heritage. Since 1975, timber production has fallen dramatically and there are now nearly 150,000 hectares of plantations waiting to be rehabilitated. Valuable tree species, including rosewood, ebony and African sandalwood, as well as mahogany, tola and mulberry, are found in the northern forests, which have been untapped since independence.
Mining
After oil and gas, diamonds make up most of Angola’s remaining exports; diamond sales exceeded $1bn in 2005. Despite increased corporate ownership of diamond fields, much production is currently in the hands of small-scale prospectors, often operating illegally. Only eight formal sector mines are operating out of a total of 145 concessions. The licensing of an estimated 350,000 artisanal miners is under way. The artisanal sector accounts for about half of Angola’s yearly production.
Angola officially produced about 7.1 million carats in 2005, most of which was from alluvial and kimberlite deposits. Analysts predict that the country’s yearly diamond production could increase even further as more kimberlite mines are put into commercial production. There is potential for the development of a diamond cutting industry in Angola, as well as for further exploration of other gemstones and industrial diamonds.
In June 2005, De Beers signed a $10m prospecting contract with the government’s diamond parastatal, Endiama (Empresa de Diamantes de Angola), ending a four-year investment dispute between De Beers and the government.
The government is making an increased effort to register and licence prospectors. Legal sales of rough diamonds may be conducted only through its diamond-buying parastatal, although many producers continue to bypass the system to obtain higher prices. The government has established an export certification scheme consistent with the Kimberley Process to identify legitimate production and sales.
Other minerals
Other mineral resources in Angola, namely, iron ore, phosphates, feldspar, bauxite, uranium and gold, remain largely undeveloped, although granite and marble mining has begun. Ashanti Goldfields and Anglo American have exploration programmes prospecting for gold and base metals, mainly in the south west and north west of the country.
An estimated 100 million tonnes of low- to medium-grade iron ore have been identified at Kassala-Kitungo, in addition to the deposits at Cassinga. The national iron ore company, Ferrangol, was established in 1981 to rehabilitate the mines at Cassinga, which ceased production due to low world prices and the destruction of the railway line to the coast during the civil war.
The Mining Law of 1992 aimed to reduce the dominance of state-owned companies by eliminating monopoly of mineral rights and providing opportunities for the private sector to invest in the mining sector.
Tourism
Angola has excellent potential to develop a thriving tourism industry with its tropical climate, beaches, rivers, mountains, wildlife and cultural attractions. The development of this sector has not yet begun in earnest.
Although the wildlife resources have been severely depleted, there are still many species of animals roaming free in Angola, from elephants to the rare giant palanca. Kissama national park, about 75 kilometres (km) south of Luanda, offers self-catering bungalows and has a wide variety of game but is inaccessible during the rainy season.
Angola has a long tradition of crafts made from ivory, wood, ceramics and metal, quite different to styles found elsewhere in Africa. Other aspects of Angolan culture, such as dance, music and nightlife, add to the country’s attractiveness. In terms of culinary experiences, Angola has much to offer. Fish, shellfish and meat cooked with strong spices are some of the country’s specialties.
International-standard hotels include the Hotel Le President Meridien and Hotel Tropico located on Ilha de Luanda.
Energy
The principal organisation responsible for the generation and supply of electricity in Angola is the state-owned Empresa Naçional de Electricidade (ENE). In addition, there are several privately owned generating companies. After years of civil war and the resultant destruction of infrastructure, the country’s power supply industry is slowly being rehabilitated, with several large projects planned that will boost generating capacity. The country has approximately 500 megawatts of generating capacity. In 2004, electricity production was 2.24 billion kilowatt hours (kWh) with consumption at 1.9 billion kWh during the same year.
The government plans to spend $800m during the next 20 years on reconstructing the power grid. Some $500m of this will be spent in the first five years on restoring ENE’s power facilities. About $200m has been earmarked for the National Dam Rehabilitation Programme.
Angola has six main dams. Only Cambambe, Biopo and Matala are functional but they are not operating at full capacity. Cambambe has been allocated the majority of funds ($70m), while Biopo and Matala will receive $30m and $20m respectively. The remaining three hydro plants, Mabubas, Lumaun and Gove, all of which were badly damaged in the war, will receive the remainder of the funds.
The construction of a 520 megawatts power station at Capanda on the Cuanza river is under way, with the assistance of Brazilian and former Soviet contractors. This project will double the country’s generating capacity.
A further five hydro plants, with a total installed capacity of 16,505 megawatts, are planned on the Kwanza, Longa, Queve-Catumbela, Cunene and Cubango rivers. In addition, state oil company Sonangol plans to build a gas-fired power station in Luanda.
Transport
- Roads: Of Angola’s 51,429km of roads, only 5349km are paved. More than 60% of the tarred roads need repair. The government estimates that it will take 10 to 15 years to restore the road system to its pre-independence state. Although road rehabilitation and removing land mines are long processes, there has been some progress, allowing convoys to deliver goods to provincial areas.
- Rail: The Portuguese laid four railway lines during the colonial period, mainly for the transporting of minerals and other natural resources from the inland areas to ports for shipment abroad. Of the 2761km of track, about 20% is operating and considerable funds are required to bring them back to fully operational levels.
- Harbours: Angola has four main ports: Luanda, Lobito, Malongo and Namibe, all of which are undergoing comprehensive restructuring. The country’s port facilities aim to play a major role in the SADC region’s improvement of import and export capabilities, particularly for its landlocked neighbours.
- Air: Most internal travel in Angola is by air because of the difficulty of overland travel. Almost all flights are heavily booked. The country has 244 airports, of which only 31 are have paved runways. The main airport is the Aeroporto 4 de Fevereiro located four kilometres from Luanda.
