About
Angola

Economy of Angola

Despite a fast-growing economy largely due to a major oil boom, Angola ranks in the bottom 10% of most socioeconomic indicators. The International Monetary Fund (IMF) estimates that Angola's real GDP increased by 16% in 2008. However, GDP growth in 2009 was flat due to significantly lower oil prices owing to the global financial crisis. According to the IMF, GDP growth in 2010 was projected at around 2.5%, with a solid pick-up in the pace of growth expected for 2011. Angola is still recovering from 27 years of nearly continuous warfare, and it remains beset by corruption and economic mismanagement. Despite abundant natural resources and rising per capita GDP, it was ranked 157 out of 179 countries on the 2008 UN Development Program's (UNDP) Human Development Index. Subsistence agriculture sustains one-third of the population.

The rapidly expanding petroleum industry reached its Organization of Petroleum Exporting Countries (OPEC) cap of 2 million barrels per day (bpd) in 2008. However, Angola’s production was cut to 1.51 million bpd in January 2009 by an OPEC mandate in response to plummeting oil prices. Throughout 2009, Angola never got down to its OPEC quota and produced an average of 1.8 million bpd. As of December 2010, Angola was Africa’s largest oil producer, a position that Angola and Nigeria had traded places on back and forth over the preceding year. Crude oil accounted for roughly 85% of GDP, 95% of exports, and 85% of government revenues in 2009. Angola also produces 40,000 bpd of locally refined oil. Oil production remains largely offshore and has few linkages with other sectors of the economy, though a local content initiative promulgated by the Angolan Government is pressuring oil companies to source from local businesses. The government is also pressuring oil companies to increase the number of Angolan staff.

Block 15, located offshore of Soyo, currently provides 30% of Angola's crude oil production. ExxonMobil, through its subsidiary Esso, is the operator, with a 40% share. In 2005, Block 15's second major sub-field, Kizomba B, came on line, producing about 250,000 bpd. BP, ENI-Agip, and Statoil are partners in the concession. Chevron operates Block 0, offshore of Cabinda, which provides about 20% of Angola's crude oil production. Its partners in Block 0 are Sonangol (the Angolan state oil company), TotalFinaElf, and ENI-Agip. In 2007, Block 0 had a total production of 370,000 bpd, and drilling activity continues at a high level. Chevron also operates Angola's first deepwater section to go into production, Block 14, which started pumping in January 2000 and produced 105,000 bpd in 2006.

TotalFinaElf brought the first Kwanza Basin deepwater blocks on line with production from its Block 17 concession that began in February 2002. Inauguration of the Dalia oilfield in December 2006 combined with the Girassol field already in operation brought Block 17's total production to approximately 500,000 bpd as of July 2007. Total expected to begin drilling in new oilfield Pazflor in 2009, bringing production to a peak of 700,000 bpd by 2011. Exploration is ongoing in ultra-deep water concessions and in deepwater and shallow concessions in the Namibe Basin. BP made the first significant ultra-deepwater find in its Block 31 concession in 2002 and had reached nine significant discoveries by the end of 2005. BP shipped its first crude from the Plutonio oilfield in Block 18 in 2007 and ultimately expects Plutonio to average 200,000 bpd in full production. Marathon also drilled a successful well in its Block 32 ultra-deep water concession. TotalFinaElf operates Angola's one refinery (in Luanda) for sole owner Sonangol; plans for a second refinery in Lobito with projected production of 200,000 bpd are moving forward, with KBR selected to do the front-end engineering and design work. There are plans to increase capacity of the Luanda refinery from 40,000 bpd to 100,000 bpd. Chevron, Sonangol, BP, Total, and Eni are developing a $4 billion to $5 billion liquefied natural gas plant at Soyo, now under construction by Bechtel, expected to start production in 2012.

Exports to Asian countries have grown rapidly in recent years, particularly to China. In late 2004, China's state oil company Sinopec entered the market, offering two separate $1 billion signing bonus offers on two offshore blocks. Sinopec has also formed a partnership with Sonangol to operate Block 3/05 (formerly Block 3/80), whose operation was transferred from Total to Sonangol. Sonangol will seek to expand its operation of onshore and shallow water blocks. This includes the northern block of Cabinda's onshore concessions, which since the reduction in hostilities with separatist forces is now open to exploration. Sonangol and Sinopec will also be eyeing future concession rounds, particularly for 23 blocks in the Kwanza Basin onshore area and the relinquished parts of Blocks 15, 17, and 18, currently operated by Exxon, Total, and BP. In 2008, Angola was China’s second-leading source country for crude oil by volume, importing 599 million barrels valued at U.S. $59.900 billion, up 19.3% year on year.

Diamonds make up most of Angola's remaining exports, with yearly production at 6 million carats. However, the financial crisis severely depressed diamond prices in 2009, sharply curtailing Angola’s diamond exports, and at one point forcing the state diamond authority, Endiama, to buy up production at cost for stockpiling to keep operators going. Diamond sales reached approximately $1.1 billion in 2006. Despite increased corporate ownership of diamond fields, much production is currently in the hands of small-scale prospectors, often operating illegally. Eight large-scale mines operate out of a total of 145 concessions. In June 2005, De Beers signed a $10 million prospecting contract with the government's diamond parastatal, ending a 4-year investment dispute between De Beers and the government. The government is making an increased effort to register and license prospectors. Legal sales of rough diamonds may occur only through the government's 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 mineral resources, including gold, remain largely undeveloped, though granite and marble quarrying has begun.

In the last decade of the colonial period, Angola was a major African agricultural exporter. Because of severe wartime conditions, including the massive dislocation of rural people and the extensive laying of landmines throughout the countryside, agricultural activities came to a near standstill, and the country now imports over half of its food. Small-scale agricultural production has increased several-fold over the last 5 years due to demining efforts, infrastructure improvements, and the ability of returnees and internally displaced persons (IDPs) to return safely to agricultural areas, yet production of most crops remains below 1974 levels. Some efforts at commercial agricultural recovery have gone forward, notably in fisheries and tropical fruits, but most of the country's vast potential remains untapped. Recently proposed 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. However, the lack of clear title to land tracts and burdensome registration process in Angola continues to be a significant impediment to foreign investment in the agriculture sector.

An economic reform effort launched in 1998 was only marginally successful in addressing persistent fiscal mismanagement and corruption. In April 2000, Angola started an IMF staff-monitored program (SMP). The program lapsed in June 2001 over IMF concerns about lack of progress by Angola. Under the program, the Government of Angola did succeed in unifying exchange rates and moving fuel, electricity, and water prices closer to market rates. In March 2007, the government announced it was not interested in a formally structured IMF program, but would continue to participate in Article IV consultations and other technical assistance on an ad hoc basis. In November 2009, following increased Angolan efforts to make oil revenues more transparent, the IMF approved a 27-month Standby Arrangement (SBA) with Angola in the amount of approximately $1.4 billion to help the country cope with the effects of the global economic crisis. According to a statement released by the IMF, “While the immediate goal is to mitigate the repercussions of the adverse terms of trade shocks linked to the global crisis, the program also includes a reform agenda aimed at medium-term structural issues to foster non-oil sector growth.” The loan was the largest IMF financing package to date for a sub-Saharan African country during the global crisis.

In December 2002, President dos Santos named a new economic team to oversee homegrown reform efforts. The new team succeeded in decreasing overall government spending, rationalizing the Kwanza exchange rate, closing regulatory loopholes that allowed off-budget expenditures, and capturing all revenues in the state budget. New procedures were implemented to track the flow of funds among the Treasury, Banco Nacional de Angola (the central bank), and the state-owned Banco de Poupanca e Credito, which operates the budget. The Angolan Government adopted a new investment code. Concerns remain about quasi-fiscal operations by the state oil company Sonangol, opaque oil-backed concessionary lines of credit that operate outside the budget process, inadequate transparency, oversight in the management of public accounts, and the lack of supervision of the commercial banking sector. A recent Financial Action Task Force on Money Laundering (FATF) report cited Angola for a significant lack of laws and regulations regarding anti-money laundering and counterterrorist financing (AML/CFT). The Angolan commercial code, financial sector law, and telecommunications law all require substantial revision.

Angola is the second-largest trading partner of the United States in sub-Saharan Africa, mainly because of its petroleum exports. U.S. exports to Angola primarily consist of industrial goods and services--such as oilfield equipment, mining equipment, chemicals, aircraft, and food. On December 30, 2003, President George W. Bush approved the designation of Angola as eligible for tariff preferences under the African Growth and Opportunity Act (AGOA).

GDP (2009 est.): $74.4 billion.

Annual real GDP growth rate (2010 est.): 2.5%.

Per capita GDP (2009): $4,301.

Avg. inflation rate (2009): 13.9%.

Natural resources: Petroleum, diamonds, iron ore, phosphates, bauxite, uranium, gold, granite, copper, feldspar.

Agriculture: Products--bananas, sugarcane, coffee, sisal, corn, cotton, manioc, tobacco, vegetables, plantains; livestock; forest products; fisheries products.

Industry: Types--petroleum drilling and refining, mining, cement, fish processing, food processing, brewing, tobacco products, sugar, textiles, ship repair.

Trade: Exports (2009 est.)--$40.8 billion: crude oil, diamonds, refined petroleum products, gas, coffee, sisal, fish and fish products, timber, cotton. Major markets (2009)--China 36.4%, U.S. 26.9%, EU 19%, South Africa 4.2%, Chile 3.7%. Imports (2009 est.)--$15 billion: machinery and electrical equipment, vehicles and spare parts; medicines, food, textiles, military goods. Major sources (2009)--EU 43.1%, China 17.4%, U.S. 8.5%, Brazil 8.3%, South Korea 6.7%, South Africa 4.2%.

Geography of Angola

Angola is bordered by the Democratic Republic of Congo to the north, Zambia to the east, Namibia to the south and the Atlantic Ocean to the west. Mountains rise from the coast, levelling to a plateau which makes up most of the country. The country is increasingly arid towards the south; the far south is on the edge of the Namib Desert. The northern plateau is thickly vegetated. Cabinda is a small enclave to the north of Angola proper, surrounded by the territories of the Democratic Republic of Congo and the Congo. The discovery of large oil deposits off the coast of the enclave has led to it becoming the centre of Angola's foreign business interests. The oil industry is based primarily at Malongo.

Official Name: Republic of Angola (Republica de Angola)

Capital: Luanda

Area: 1,246,700 sq. km. (481,400 sq. mi), about twice the size of Texas.

Cities: Capital--Luanda (pop. 3.8 million); Huambo (750,000); Benguela (600,000).

Terrain: A narrow, dry coastal strip extending from Luanda to Namibia; well-watered agricultural highlands; savanna in the far east and south; and rain forest in the north and Cabinda.

Climate: Tropical and tropical highland.

Government of Angola

Angola changed from a one-party Marxist-Leninist system ruled by the MPLA to a nominal multiparty democracy following the 1992 elections, in which President dos Santos won the first-round election with 49% of the vote to Jonas Savimbi's 40%; a runoff never took place. The Constitutional Law of 1992 establishes the broad outlines of government structure and delineates the rights and duties of citizens. The government is based on ordinances, decrees, and decisions issued by a president and his ministers and on legislation produced by the National Assembly and approved by the president. The Assembly is generally subordinate to the executive.

Angola is governed by a president, vice president, and 85 appointed ministers and state secretaries. Political power is concentrated in the presidency. The executive branch of the government is composed of the president (head of state and government), the vice president, ministers of state, and the Council of Ministers. The Council of Ministers, composed of all government ministers and secretaries of state, meets regularly to discuss policy issues. The president, the Council of Ministers, and individual ministers in their areas of competence have the ability to legislate by decree.

Of the 220 deputies currently seated in the National Assembly, 130 are elected at large, and 5 are elected to represent each of the 18 provinces. The Electoral Law also calls for the election of three additional deputies to represent citizens living abroad; however, those positions have not been filled.

Angola held legislative elections on September 5, 2008, Angola’s first since 1992. Due to technical difficulties on election day, voting was extended through September 6 in some constituencies. The results of the elections were accepted by UNITA and most other opposition parties. The MPLA won 81.6% of the electorate, giving it 191 out of 220 seats in parliament. The remaining 29 parliamentary seats were won by the National Union for the Total Independence of Angola (UNITA) (16), the Social Renewal Party (PRS) (8), National Front for the Liberation of Angola (FNLA) (3), and the New Democracy (ND) coalition (2).

Angola enacted a new constitution on February 5, 2010 and on February 8, President dos Santos swore in a new government. The new constitution allows for the direct election of the president, introduces the new office of the vice president, and eliminates the position of prime minister. After signing the new constitution, President dos Santos declared that national elections would take place in 2012. Municipal elections may take place after the next national poll. The central government administers the country through 18 provinces. Governors of the provinces are appointed by and serve at the pleasure of the president. The government has embarked on a program of decentralization, and in August 2007 the Council of Ministers passed a resolution to grant some municipalities control of their own budgets; this measure was extended to all municipalities in 2008.

The legal system is based on Portuguese and customary law but is weak and fragmented. Courts operate in only a fraction of the 164 municipalities. A Supreme Court serves as the appellate tribunal; a constitutional court was established in May 2008.

The 27-year civil war ravaged the country's political and social institutions. Daily conditions of life throughout the country mirror the inadequate administrative infrastructure as well as inadequate social institutions, for which government support is often weak. Many hospitals are without medicines or basic equipment, schools are without books, and public employees often lack the basic supplies for their daily work. The government estimates that 4.7 million people were internally displaced by the civil war. In March 2007, the UN High Commissioner for Refugees (UNHCR) and Angola jointly celebrated the end of a 5-year organized voluntary repatriation program that returned home more than 400,000 Angolan refugees. However, over 200,000 refugees remain outside Angola, mainly in Democratic Republic of the Congo, Republic of the Congo, and Namibia.

President--José Eduardo dos Santos

Vice President--Fernando da Piedade Dias dos Santos

Minister of State and Head of Civilian House--Carlos Maria da Silva Feijó

Minister of State and Head of Military House--Manuel Helder Vierira Dias, Jr.

Minister of State for Economic Coordination--Manuel Nunes Júnior

Minister of External Affairs--Assunção Afonso de Sousa dos Anjos

Minister of the Interior--Roberto Leal Monteiro Ngongo

Minister of Finance--Carlos Alberto Lopes

Minister of National Defense--Cándido Pereira dos Santos Van-Dúnem

Minister of Petroleum--José Maria Botelho de Vasconcelos

Minister of Planning--Ana Afonso Dias Lourenço

Ambassador to the United States--Josefina Perpetua Pitra Diakité

Permanent Representative to the United Nations--Ismael Gaspar Martins

Angola maintains an embassy in the United States at 2100-2108 16th St., NW, Washington, DC 20009 (tel. 202-785-1156; fax 202-785-1258; web: www.angola.org).

Type: Republic.

Independence: November 11, 1975.

Branches: Executive--elected president (chief of state), appointed prime minister, and 31 appointed civilian ministers and 55 vice ministers. Legislative--elected National Assembly (223 seats). Judicial--Supreme Court, Constitutional Court

Administrative subdivisions: Province, municipality, commune.

Political parties: 98 with legal status; in 1992, 12 won seats in the National Assembly. Ruling party--Popular Movement for the Liberation of Angola (MPLA). Opposition--National Union for the Total Independence of Angola (UNITA), Social Renewal Party (PRS), National Front for the Liberation of Angola (FNLA), Party for Democratic Progress - Angola National Alliance (PDP-ANA), Democratic Renewal Party (PRD), Party of the Alliance of Youth, Workers, and Peasants (PAJOCA), Liberal Democratic Party (PLD), Democratic Alliance (AD), Angolan Democratic Forum (FDA), Social Democratic Party (PSD), Front for Democracy (FPD), and the Angolan National Democratic Party (PNDA).

Suffrage: Universal age 18 and over.

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History of Angola

In 1482, when the Portuguese first landed in what is now northern Angola, they encountered the Kingdom of the Congo, which stretched from modern Gabon in the north to the Kwanza River in the south. Mbanza Congo, the capital, had a population of 50,000 people. South of this kingdom were various important states, of which the Kingdom of Ndongo, ruled by the ngola (king), was most significant. Modern Angola derives its name from the king of Ndongo. The Portuguese gradually took control of the coastal strip throughout the 16th century by a series of treaties and wars. The Dutch occupied Luanda from 1641-48, providing a boost for anti-Portuguese states. In 1648, Brazilian-based Portuguese forces re-took Luanda and initiated a process of military conquest of the Congo and Ndongo states that ended with Portuguese victory in 1671. Full Portuguese administrative control of the interior did not occur until the beginning of the 20th century.

Portugal's primary interest in Angola quickly turned to slavery. The slaving system began early in the 16th century with the purchase from African chiefs of people to work on sugar plantations in São Tomé, Principé, and Brazil. Many scholars agree that by the 19th century, Angola was the largest source of slaves not only for Brazil, but also for the Americas, including the United States. By the end of the 19th century, a massive forced labor system had replaced formal slavery and would continue until outlawed in 1961. It was this forced labor that provided the basis for development of a plantation economy and, by the mid-20th century, a major mining sector. Forced labor combined with British financing to construct three railroads from the coast to the interior, the most important of which was the transcontinental Benguela railroad that linked the port of Lobito with the copper zones of the Belgian Congo and what is now Zambia.

Colonial economic development did not translate into social development for native Angolans. The Portuguese regime encouraged white immigration, especially after 1950, which intensified racial antagonisms. As decolonization progressed elsewhere in Africa, Portugal, under the Salazar and Caetano dictatorships, rejected independence and treated its African colonies as overseas provinces. Consequently, three independence movements emerged: the Popular Movement for the Liberation of Angola (MPLA) led by Agostinho Neto, with a base among Kimbundu and the mixed-race intelligentsia of Luanda, and links to communist parties in Portugal and the East Bloc; the National Front for the Liberation of Angola (FNLA), led by Holden Roberto with an ethnic base in the Bakongo region of the north and links to the United States and the Mobutu regime in Kinshasa; and the National Union for the Total Independence of Angola (UNITA), led by Jonas Malheiro Savimbi with an ethnic and regional base in the Ovimbundu heartland in the center of the country and links to the People's Republic of China and apartheid South Africa.

From the early 1960s, elements of these movements fought against the Portuguese. A 1974 coup d'etat in Portugal established a military government that promptly ceased the war and agreed, in the Alvor Accords, to hand over power to a coalition of the three movements. The ideological differences between the three movements eventually led to armed conflict, with FNLA and UNITA forces, encouraged by their respective international supporters, attempting to wrest control of Luanda from the MPLA. The intervention of troops from South Africa on behalf of UNITA and Zaire on behalf of the FNLA in September and October 1975 and the MPLA's importation of Cuban troops in November effectively internationalized the conflict. Retaining control of Luanda, the coastal strip, and increasingly lucrative oil fields in Cabinda, the MPLA declared independence on November 11, 1975, the day the Portuguese abandoned the capital. UNITA and the FNLA formed a rival coalition government based in the interior city of Huambo. Agostinho Neto became the first president of the MPLA government that was recognized by the United Nations in 1976. Upon Neto's death from cancer in 1979, then-Planning Minister José Eduardo dos Santos ascended to the presidency.

The FNLA's military failures led to its increasing marginalization, internal divisions, and abandonment by international supporters. An internationalized conventional civil war between UNITA and the MPLA continued until 1989. For much of this time, UNITA controlled vast swaths of the interior and was backed by U.S. resources and South African troops. Similarly, tens of thousands of Cuban troops remained in support of the MPLA, often fighting South Africans on the front lines. A U.S.-brokered agreement resulted in withdrawal of foreign troops in 1989 and led to the Bicesse Accord in 1991, which spelled out an electoral process for a democratic Angola under the supervision of the United Nations. When UNITA's Jonas Savimbi failed to win the first round of the presidential election in 1992 (he won 40% to dos Santos's 49%, which meant a runoff), he called the election fraudulent and returned to war. Another peace accord, known as the Lusaka Protocol, was brokered in Lusaka, Zambia, and signed in 1994. This agreement, too, collapsed into renewed conflict. The UN Security Council voted on August 28, 1997 to impose sanctions on UNITA. The Angolan military launched a massive offensive in 1999, which destroyed UNITA's conventional capacity and recaptured all major cities previously held by Savimbi's forces. Savimbi then declared a return to guerrilla tactics, which continued until his death in combat in February 2002.

On April 4, 2002, the Angolan Government and UNITA signed the Luena Memorandum of Understanding (MOU), which formalized the de facto cease-fire that prevailed following Savimbi's death. In accordance with the MOU, UNITA recommitted to the peace framework in the 1994 Lusaka Protocol, returned all remaining territory to Angolan Government control, quartered all military personnel in predetermined locations, and relinquished all arms. In August 2002, UNITA demobilized all military personnel. UN Security Council sanctions on UNITA were lifted on December 9, 2002. UNITA and the MPLA held their first post-war party congresses in 2003. The UNITA Congress saw the democratic transfer of power from interim leader General Paulo Lukumba "Gato" to former UNITA representative in Paris Isaias Henriqué Samakuva, while the MPLA Congress reaffirmed President dos Santos' leadership of party structures. Samakuva was reelected to a second 4-year term as UNITA party president at a UNITA party congress in July 2007.

The signing of the Memorandum of Understanding (MOU) for Peace and Reconciliation in Cabinda on August 1, 2006, was intended as a step toward ending conflict in Cabinda and in bringing about greater representation for the people of Cabinda. It followed a successful counterinsurgency campaign by the Angolan Armed Forces (FAA), who still maintain a strong troop presence there. The MOU rejects the notion of Cabindan independence, calls for the demobilization and reintegration of former Front for the Liberation of the Enclave of Cabinda (FLEC) fighters into various governmental positions, and creates a special political and economic status for the province of Cabinda. Many FLEC military combatants have now been integrated into the Angolan Armed Forces and National Police, including into some command positions. In addition, Cabindans will be given designated numbers of vice ministerial and other positions in the Angolan Government. Some FLEC members, who did not sign onto the peace memorandum, continue their independence efforts through public outreach and infrequent low-level attacks against FAA convoys and outposts and occasional attacks on civilians.

People of Angola

Estimates of Angola's population vary, as there has been no census since 1970, but it is generally estimated at 17 million. Angola has three main ethnic groups, each speaking a Bantu language: Umbundu 37%, Kimbundu 25%, and Kikongo 13%. Other groups include Chokwe, Lunda, Ganguela, Nhaneca-Humbe, Ambo, Herero, and Xindunga. In addition, mixed racial (European and African) people amount to about 2%, with a small (1%) population of whites, mainly ethnic Portuguese. Portuguese make up the largest non-Angolan population, with at least 30,000 (though many native-born Angolans can claim Portuguese nationality under Portuguese law). Portuguese is both the official and predominant language.

Nationality: Noun and adjective--Angolan(s).

Population (2009 est.): 17,300,000.

Annual population growth rate (2008): 2.6%.

Ethnic groups: Ovimbundu 37%, Kimbundu 25%, Bakongo 13%, mixed racial 2%, European 1%.

Religions (2001 official est.): Roman Catholic 68%, various Protestant 20%, indigenous beliefs 12%.

Languages: Portuguese (official), Umbundu, Kimbundu, Kikongo, and others.

Education: Years compulsory--8. Enrollment (combined gross enrollment for primary, secondary, and tertiary schools, 2004 est.)--26%. Literacy (total population over 15 that can read and write, 2004 est.)--67.4% (female 54.2%, male 82.9%).

Health: Life expectancy (2004 est.)--total population 42 years. Infant mortality rate (2007 est.)--116/1,000. Under-5 mortality rate (2007 est.)--158/1,000.

Work force (2006 est. 7.7 million): Agriculture 26%; unemployed 27%; percentages in commerce, industry, services and informal sector undetermined.