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All change as new-look Angola takes on role as an African leader

Article - August 1, 2014
From bloody civil war to sub-Saharan success story. Angola’s wealth of raw materials as well as its intelligent leadership has helped transform the country into an African power
ANGOLA PRESIDENT JOSÉ EDUARDO DOS SANTOS MEETS FRED P. HOCHBERG, CHAIRMAN OF EXIM BANK.
Returning today after an absence of 20 years, a former resident of Luanda, the capital city of Angola, could not be blamed for the initial impression that he or she had arrived in the wrong place.

A city which had been left devastated by decades of the struggle for independence from Portugal followed by a bloody civil war is now one of the world’s most vibrant capitals with a skyline punctuated by construction cranes, the latest model automobiles filling its streets and major multinationals setting up shop.

And it is not just Luanda that is undergoing such a dramatic change.

All across the country, projects initiated by the government of President José Eduardo Dos Santos and financed by Angola’s astonishing petroleum wealth are transforming towns, villages and rural areas with new or upgraded transport infrastructure, schools and hospitals, low-cost housing, energy distribution networks and water and sewage systems.

“A lot of the foreign companies from the united states, china, britain etc. present in angola spurred development and the growth rates we are registering”

CAMILO CEITA
General Director of the National Statistics Institute (INE)

---------------------------------

“we have an open policy in dealing with other countries as equal partners and so their citizens are entitled to live and work in Angola”

GEORGES CHIKOTI
Angolan Minister of
Foreign Affairs
But while these dramatic domestic physical changes are occurring, the country is also establishing itself as a proud and important African player in the international, and especially regional, political and economic spheres.

In January, the Angolan President took over as the rotating chairman of the International Conference on the Great Lakes Region (ICGLR) which is seeking to bring peace, security, democracy and development to central Africa where recent conflicts and political unrest have killed hundreds of thousands in countries like the Central African Republic and Democratic Republic of Congo.

Founded in 2007 at the instigation of the United Nations Security Council, the conference groups Angola, Burundi, Central African Republic, Republic of Congo, Democratic Republic of Congo, Kenya, Uganda, Rwanda, Sudan, South Sudan, Tanzania and Zambia.

“I am very grateful, as is President Obama, for the significant leadership of President Dos Santos and the foreign minister on the efforts of the International Conference on the Great Lakes Region,” U.S. Secretary of State John Kerry said during his recent visit to Angola.

“That leadership is making a difference in helping to bring about stability and peace,” he continued. “The contributions of Angola and our efforts to try to work together on a strategic dialogue will be very important.”

With its history of armed conflict and successful resolution with former foes now working together to build the nation, Angola is the perfect interlocutor for the small wars ravaging the region, halting development and scaring off potential investors.

“President Dos Santos believes that if there is no peace in our neighborhood, we cannot be at peace ourselves,” explains Angolan Foreign Minister Georges Chikoti.

“Once peace is consolidated, we’ll solve the pending issues related to all forms of the rebel groups and start achieving economic development in a region rich in natural resources.”

Angola is certainly one of those blessed with a wealth of raw materials coveted by the rest of the world and which places it among the regional leaders in extractive industries.

FRANCISCO QUEIROZ

Angolan Minister of Geology and Mining

PEDRO PINTO COELHO

CEO of Standard Bank Angola

But it is not all about oil. Angola possesses rich deposits of a wide range of minerals that the government is keen to exploit as another source for bettering the lot of the Angolan people. One of the most important of these are diamonds.

“Mining activities in Angola are still concentrated on diamonds,” notes Minister of Geology and Mining Francisco Queiroz. “Production levels are currently around 9 million carats a year and starting next year new projects will help raise these levels.”

Mr. Queiroz mentions another project, Luminas, which is aimed at producing diamonds of higher quality in Angola, thereby significantly increasing revenue.

“Let’s say a rough diamond is sold for $320 per carat. But if it were cut that same diamond could be sold for 10 times as much. This is a part of the industry that creates a lot of value that we will develop with the help of foreign investment,” he says.

The country is establishing itself as a proud and important African player in the international, and especially regional, political and economic spheres

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Angola is blessed with a wealth of raw materials coveted by the rest of the world and which places it among the regional leaders in extractive industries.
Along with earning strong revenue from its diamond output, Angola is also involved in another aspect of the sector. The country currently holds the Vice-Presidency of the Kimberly Process Certification Scheme, an international effort to stem the flow of conflict diamonds. Also known as “blood diamonds,” these stones are sold on the international market by the region’s rebel groups to finance their wars against legitimate governments.

In Angola itself, insurgents used such sales to fund their fight and so the country is well placed to help in halting blood diamond traffic in others.

Mr. Queiroz points out that diamonds aside, the country is working to exploit its other mineral riches. “We need to map all the country’s resources and start investing and attracting investments in the exploration for other minerals such as gold, iron, manganese, coal, phosphates and copper that we have in large quantities.”

Mining is one of many attractive sectors for foreign investors and the government’s Mining Act clearly describes in a transparent manner the proper procedures, guarantees and security considerations for potential investors.

“Our objective is to transform Angola into a mining country, and not only for its petroleum as we can surpass the oil sector in terms of revenue and job creation,” the minister predicts.

And mining is just one of the many industries which are catching the eye of foreign investors with the government streamlining the investment process to make it smoother and safer for those foreign companies eager to bet on Angola. Leading multinationals and dozens of smaller firms from the United States, Britain, China, Portugal, Spain, Brazil, France and a host of other nations have taken note and are putting their money into Angola.

“Angola’s attractiveness is mainly based on a number of factors,” explains Minister of Foreign Affairs Chikoti.

“First, we have a very important investment law on private investments which allows people to invest very easily.

“Investors can be either individuals or partners and the returns on investments made in Angola as well as the profits from the investments are insured,” he says.

Secondly, the foreign minister notes that the country has many unfulfilled needs regarding products and services of all kinds, and thirdly that those foreign companies involved in the petroleum sector have created a high demand for related investment.

“Mining activities are still concentrated on diamonds...Production levels are currently around 9 million carats a year and starting next year new projects will help raise these leveLS”

FRANCISCO QUEIROZ
Angolan Minister of Geology and Mining

-------------------------------

“There are interesting efforts being made towards the goal of diversifying the economy...the beverage industry is rapidly developing followed by the agriculture and service industry”


PEDRO PINTO COELHO
CEO of Standard Bank Angola
Mr. Chikoti also argues that Angola, with its rapidly improving sea ports and rail lines, is becoming a transport hub for its landlocked neighbors like the Democratic Republic of Congo and Zambia.

“Lastly, we have an open policy in dealing with other countries as equal partners and so their citizens are entitled to live and work in Angola.”

Mr. Chikoti admits that there are challenges for foreign investors in Angola such as finding highly qualified employees and there are complaints about the high cost of living for expatriates and annoyances like the traffic situation in Luanda.

But he says the government is acting on these concerns and expects improvements in the near future, while Camilo Ceita, the general director of the National Statistics Institute, says government data clearly shows that investment is helping Angola’s economic growth.

“Foreign investments and the conditions created to attract them constitute a key element in the country’s progress,” explains Mr. Ceita.

“A lot of the foreign companies from the United States, China, Britain, etc. present in Angola spurred development and the growth rates we are registering.”

Foreign bankers active in Angola are also bullish on the country, saying that it is an ideal destination for foreign direct investment.

“Currently there are interesting efforts being made towards the goal of diversifying the economy, for example, the beverage industry is rapidly developing followed by the agriculture and service industry,” says Pedro Pinto Coelho, the CEO of Standard Bank Angola.

Martin Hercules, the Senior Representative of Commerzbank in Angola, concurs, stating that a number of sectors, especially infrastructure, energy and import substitution “will be key to the future of the country.”

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