Economy of Angola
Encyclopedia
The Economy of Angola is one of the fastest-growing economies in the world, with the Economist asserting that for 2001 to 2010, Angolas' Annual average GDP growth was 11.1 percent. It is still recovering from the Angolan Civil War
that plagued Angola from independence in 1975
until 2002. Despite extensive oil and gas resources, diamond
s, hydroelectric potential, and rich agricultural land, Angola remains poor, and a third of the population relies on subsistence agriculture. Since 2002, when the 27-year civil war ended, the country has worked to repair and improve ravaged infrastructure and weakened political and social institutions. High international oil prices and rising oil production have led to a very strong economic growth in recent years, but corruption and public-sector mismanagement remain, particularly in the oil sector, which accounts for over 50 percent of GDP, over 90 percent of export revenue, and over 80 percent of government revenue.
's explorers and settlers, founded trading posts and forts along the coast of Africa
since the 15th century, and reached the Angola
n coast in the 16th century. Portuguese explorer Paulo Dias de Novais
founded Luanda
in 1575 as "São Paulo de Loanda", and the region developed as a slave trade
market with the help of local Imbangala
and Mbundu
peoples who were notable slave hunters
. Trade was mostly with the Portuguese colony of Brazil; Brazilian ships were the most numerous in the ports of Luanda and Benguela. By this time, Angola, a Portuguese colony, was in fact like a colony of Brazil, paradoxically another Portuguese colony. A strong Brazilian influence was also exercised by the Jesuits in religion and education. War gradually gave way to the philosophy of trade. The great trade routes and the agreements that made them possible were the driving force for activities between the different areas; warlike states become states ready to produce and to sell. In the Planalto (the high plains), the most important states were those of Bié and Bailundo
, the latter being noted for its production of foodstuffs and rubber. The colonial power, Portugal, becoming ever richer and more powerful, would not tolerate the growth of these neighbouring states and subjugated them one by one, so that by the beginning of this century the Portuguese had complete control over the entire area. During the period of the Iberian Union
(1580–1640), Portugal lost influence and power and made new enemies. The Dutch
, a major enemy of Castile
, invaded many Portuguese overseas possessions, including Luanda
. The Dutch ruled Luanda from 1640 to 1648 as Fort Aardenburgh. They were seeking black slaves for use in sugarcane
plantations of Northeastern Brazil
(Pernambuco
, Olinda
, Recife
) which they had also seized from Portugal. John Maurice, Prince of Nassau-Siegen, conquered the Portuguese possessions of Saint George del Mina
, Saint Thomas, and Luanda, Angola, on the west coast of Africa. After the dissolution of the Iberian Union in 1640, Portugal would reestablish its authority over the lost territories of the Portuguese Empire
.
The Portuguese started to develop townships, trading posts, logging camps and small processing factories. From 1764 onwards, there was a gradual change from a slave-based society to one based on production for domestic consumption and export. Meanwhile, with the independence of Brazil in 1822, the slave trade was abolished in 1836, and in 1844 Angola's ports were opened to foreign shipping. By 1850, Luanda was one of the greatest and most developed Portuguese cities in the vast Portuguese Empire
outside Mainland Portugal, full of trading companies, exporting (together with Benguela
) palm and peanut oil, wax, copal, timber, ivory, cotton, coffee, and cocoa, among many other products. Maize, tobacco, dried meat and cassava flour also began to be produced locally. The Angolan bourgeoisie was born. From the 1920s to the 1960s, strong economic growth, abundant natural resources and development of infrastruture, led to the arrival of even more Portuguese settlers.
The Portuguese
discovered petroleum
in Angola in 1955. Production began in the Cuanza basin in the 1950s, in the Congo basin
in the 1960s, and in the exclave of Cabinda
in 1968. The Portuguese government granted operating rights for Block Zero to the Cabinda Gulf Oil Company, a subsidiary of ChevronTexaco, in 1955. Oil production surpassed the exportation of coffee
as Angola's largest export in 1973.
A leftist military-led coup d'état, started on April 25, 1974, in Lisbon, overthrew the Marcelo Caetano
government in Portugal, and promised to hand over power to an independent Angolan government. Mobutu Sese Seko
, the President of Zaire, met with António de Spínola
, the transitional President of Portugal
, on September 15, 1974 on Sal island in Cape Verde
, crafting a plan to empower Holden Roberto
of the National Liberation Front of Angola
, Jonas Savimbi
of UNITA
, and Daniel Chipenda
of the MPLA's eastern faction at the expense of MPLA leader Agostinho Neto
while retaining the façade of national unity. Mobutu and Spínola wanted to present Chipenda as the MPLA head, Mobutu particularly preferring Chipenda over Neto because Chipenda supported autonomy for Cabinda
. The Angolan exclave has immense petroleum reserves estimated at around 300 million tons (~300 kg) which Zaire, and thus the Mobutu government, depended on for economic survival. After independence thousands of white Portuguese left, most of them to Portugal
and many travelling overland to South Africa
. There was an immediate crisis because the indigenous African population lacked the skills and knowledge needed to run the country and maintain its well-developed infrastructure.
The Angolan government created Sonangol, a state-run oil company, in 1976. Two years later Sonangol received the rights to oil exploration and production in all of Angola. After independence from Portugal in 1975, Angola was ravaged by a horrific civil war
between 1975 and 2002.
and MONUA
spent USD1.5 billion overseeing implementation of the Lusaka Protocol
, a 1994 peace accord that ultimately failed to end the civil war. The protocol prohibited UNITA from buying foreign arms, a provision the United Nations
largely did not enforce, so both sides continued to build up their stockpile. UNITA purchased weapons in 1996 and 1997 from private sources in Albania
and Bulgaria
, and from Zaire
, South Africa
, Republic of the Congo
, Zambia
, Togo
, and Burkina Faso
. In October 1997 the UN imposed travel sanctions on UNITA leaders, but the UN waited until July 1998 to limit UNITA's exportation of diamonds and freeze UNITA bank accounts. While the U.S. government gave USD250 million to UNITA between 1986 to 1991, UNITA made USD1.72 billion between 1994 and 1999 exporting diamonds, primarily through Zaire to Europe. At the same time the Angolan government received large amounts of weapons from the governments of Belarus
, Brazil
, Bulgaria, the People's Republic of China
, and South Africa
. While no arms shipment to the government violated the protocol, no country informed the U.N. Register on Conventional Weapons as required.
Despite the increase in civil warfare in late 1998, the economy grew by an estimated 4% in 1999. The government introduced new currency denominations in 1999, including a 1 and 5 kwanza note.
assistance, has begun with the BCI
bank. Nevertheless, a legacy of fiscal mismanagement and corruption persists. The civil war internally displaced
3.8 million people, 32% of the population, by 2001. The security brought about by the 2002 peace settlement has led to the resettlement of 4 million displaced persons, thus resulting in large-scale increases in agriculture production.
Angola produced over 3 million carats of diamonds per year in 2003, with its production expected to grow to 10 million carats per year by 2007. In 2004 China's Eximbank approved a $2 billion line of credit to Angola to rebuild infrastructure. The economy grew 18% in 2005 and growth was expected to reach 26% in 2006 and stay above 10% for the rest of the decade.
ChevronTexaco started pumping 50 koilbbl/d from Block 14 in January 2000, but production has decreased to 57 koilbbl/d in 2007 due to the poor quality of the oil. Angola joined the Organization of the Petroleum Exporting Countries on January 1, 2007.
Cabinda Gulf Oil Company found Malange-1, an oil reservoir in Block 14, on August 9, 2007.
In the last decade of the colonial period, Angola was a major African food exporter but now imports almost all its food. Because of severe wartime conditions, including extensive planting of landmines throughout the countryside, agricultural activities have been brought to a near standstill. Some efforts to recover have gone forward, however, notably in fisheries. Coffee
production, though a fraction of its pre-1975 level, is sufficient for domestic needs and some exports. In sharp contrast to a bleak picture of devastation and bare subsistence is expanding oil production, now almost half of GDP and 90% of exports, at 800 koilbbl/d. Diamonds provided much of the revenue for Jonas Savimbi
's UNITA
rebellion through illicit trade. Other rich resources await development: gold, forest products, fisheries, iron ore, coffee, and fruits.
This is a chart of trend of nominal gross domestic product
of Angola at market prices using International Monetary Fund data; figures are in millions of units.
Exports in 2004 reached US$
10,530,764,911. The vast majority of Angola's exports, 92% in 2004, are petroleum products. US$
785 million worth of diamonds, 7.5% of exports, were sold abroad that year. Nearly all of Angola's oil goes to the United States, 526 koilbbl/d in 2006, making it the eighth largest supplier of oil to the United States, and to the People's Republic of China
, 477 koilbbl/d in 2006. In the first quarter of 2008, Angola became the main exporter of oil to China. The rest of its petroleum exports go to Europe
and Latin America
. U.S. companies account for more than half the investment in Angola, with Chevron-Texaco leading the way. The U.S. exports industrial goods and services, primarily oilfield equipment, mining equipment, chemicals, aircraft, and food, to Angola, while principally importing petroleum. Trade between Angola and South Africa
exceeded USD 300 million in 2007. From the 2000s many Chinese have settled and started up businesses.
, surpassing Nigeria
in the 2000s
. In January 2007 Angola became a member of OPEC
. By 2010 production is expected to double the 2006 output level with development of deep-water offshore oil fields. Oil sales generated USD 1.71 billion in tax revenue in 2004 and now makes up 80% of the government's budget, a 5% increase from 2003, and 45% of GDP.
Chevron Corporation
produces and receives 400 koilbbl/d, 27% of Angolan oil. Elf Oil, Texaco
, ExxonMobil
, Agip
, Petrobras
, and British Petroleum also operate in the country.
Block Zero provides the majority of Angola's crude oil production with 370 koilbbl/d produced annually. The largest fields in Block Zero are Takula (Area A), Numbi (Area A), and Kokongo (Area B). ChevronTexaco operates in Block Zero with a 39.2% share. SONANGOL, the state oil company, Total
, and ENI-Agip
own the rest of the block. ChevronTexaco also operates Angola's first producing deepwater section, Block 14, with 57 koilbbl/d.
The United Nations
has criticized the Angolan government for using torture, rape, summary executions, arbitrary detention, and disappearances, actions which Angolan government has justified on the need to maintain oil output.
Angola is the third-largest trading partner of the United States in Sub-Saharan Africa, largely because of its petroleum exports. The U.S. imports 7% of its oil from Angola, about three times as much as it imported from Kuwait
just prior to the Gulf War
in 1991. The U.S. Government has invested USD $4 billion in Angola's petroleum sector.
, the national diamond company of Angola, expects production to increase by 8% in 2007 to 10 million carats annually. The government is trying to attract foreign companies to the provinces
of Bié
, Malanje
and Uíge.
The Angolan government loses $375 million annually from diamond smuggling. In 2003 the government began Operation Brilliant, an anti-smuggling investigation that arrested and deported 250,000 smugglers between 2003 and 2006. Rafael Marques, a journalist and human rights activist, described the diamond industry in his 2006 Angola's Deadly Diamonds report as plagued by "murders, beatings, arbitrary detentions and other human rights violations." Marques called on foreign countries to boycott Angola's "conflict diamonds".
began mining iron
in 1957, producing 1.2 million tons in 1967 and 6.2 million tons by 1971. In the early 1970s, 70% of Portuguese Angola's iron exports went to Western Europe
and Japan
. After independence in 1975, the Angolan Civil War
(1975–2002) destroyed most of the territory's mining infrastructure. The redevelopment of the Angolan mining industry started in the late 2000s.
Angolan Civil War
The Angolan Civil War was a major civil conflict in the Southern African state of Angola, beginning in 1975 and continuing, with some interludes, until 2002. The war began immediately after Angola became independent from Portugal in November 1975. Prior to this, a decolonisation conflict had taken...
that plagued Angola from independence in 1975
Alvor Agreement
The Alvor Agreement, signed on January 15, 1975, granted Angola independence from Portugal on November 11, ending the war for independence while marking the transition to civil war...
until 2002. Despite extensive oil and gas resources, diamond
Diamond
In mineralogy, diamond is an allotrope of carbon, where the carbon atoms are arranged in a variation of the face-centered cubic crystal structure called a diamond lattice. Diamond is less stable than graphite, but the conversion rate from diamond to graphite is negligible at ambient conditions...
s, hydroelectric potential, and rich agricultural land, Angola remains poor, and a third of the population relies on subsistence agriculture. Since 2002, when the 27-year civil war ended, the country has worked to repair and improve ravaged infrastructure and weakened political and social institutions. High international oil prices and rising oil production have led to a very strong economic growth in recent years, but corruption and public-sector mismanagement remain, particularly in the oil sector, which accounts for over 50 percent of GDP, over 90 percent of export revenue, and over 80 percent of government revenue.
History
Kingdom of PortugalKingdom of Portugal
The Kingdom of Portugal was Portugal's general designation under the monarchy. The kingdom was located in the west of the Iberian Peninsula, Europe and existed from 1139 to 1910...
's explorers and settlers, founded trading posts and forts along the coast of Africa
Africa
Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...
since the 15th century, and reached the Angola
Angola
Angola, officially the Republic of Angola , is a country in south-central Africa bordered by Namibia on the south, the Democratic Republic of the Congo on the north, and Zambia on the east; its west coast is on the Atlantic Ocean with Luanda as its capital city...
n coast in the 16th century. Portuguese explorer Paulo Dias de Novais
Paulo Dias de Novais
Paulo Dias de Novais , a nobleman of the Royal Household, was a Portuguese colonizer of Africa in the 16th century and the first Captain-Governor of Angola. He was the grandson of the explorer Bartolomeu Dias....
founded Luanda
Luanda
Luanda, formerly named São Paulo da Assunção de Loanda, is the capital and largest city of Angola. Located on Angola's coast with the Atlantic Ocean, Luanda is both Angola's chief seaport and its administrative center. It has a population of at least 5 million...
in 1575 as "São Paulo de Loanda", and the region developed as a slave trade
Slavery in Angola
Slavery in Angola existed since early times. Several peoples and tribes from current-day Angola, like the Imbangala and the Mbundu, were active slave traders for centuries...
market with the help of local Imbangala
Imbangala
The Imbangala or Mbangala were 17th century groups of Angolan warriors and marauders who founded the kingdom of Kasanje.-Origins of the Imbangala:...
and Mbundu
Mbundu
The Northern Mbundu or Ambundu are a people living in Angola's North-West, North of the river Kwanza. The Ambundu speak Kimbundu, and mostly also the official language of the country, Portuguese...
peoples who were notable slave hunters
African slave trade
Systems of servitude and slavery were common in many parts of Africa, as they were in much of the ancient world. In some African societies, the enslaved people were also indentured servants and fully integrated; in others, they were treated much worse...
. Trade was mostly with the Portuguese colony of Brazil; Brazilian ships were the most numerous in the ports of Luanda and Benguela. By this time, Angola, a Portuguese colony, was in fact like a colony of Brazil, paradoxically another Portuguese colony. A strong Brazilian influence was also exercised by the Jesuits in religion and education. War gradually gave way to the philosophy of trade. The great trade routes and the agreements that made them possible were the driving force for activities between the different areas; warlike states become states ready to produce and to sell. In the Planalto (the high plains), the most important states were those of Bié and Bailundo
Bailundo
Bailundo is a municipality and town in Huambo Province in the central highlands of Angola.In the 1990s, Bailundo was the location of the headquarters of UNITA leader Jonas Savimbi....
, the latter being noted for its production of foodstuffs and rubber. The colonial power, Portugal, becoming ever richer and more powerful, would not tolerate the growth of these neighbouring states and subjugated them one by one, so that by the beginning of this century the Portuguese had complete control over the entire area. During the period of the Iberian Union
Iberian Union
The Iberian union was a political unit that governed all of the Iberian Peninsula south of the Pyrenees from 1580–1640, through a dynastic union between the monarchies of Portugal and Spain after the War of the Portuguese Succession...
(1580–1640), Portugal lost influence and power and made new enemies. The Dutch
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, a major enemy of Castile
Crown of Castile
The Crown of Castile was a medieval and modern state in the Iberian Peninsula that formed in 1230 as a result of the third and definitive union of the crowns and parliaments of the kingdoms of Castile and León upon the accession of the then King Ferdinand III of Castile to the vacant Leonese throne...
, invaded many Portuguese overseas possessions, including Luanda
Luanda
Luanda, formerly named São Paulo da Assunção de Loanda, is the capital and largest city of Angola. Located on Angola's coast with the Atlantic Ocean, Luanda is both Angola's chief seaport and its administrative center. It has a population of at least 5 million...
. The Dutch ruled Luanda from 1640 to 1648 as Fort Aardenburgh. They were seeking black slaves for use in sugarcane
Sugarcane
Sugarcane refers to any of six to 37 species of tall perennial grasses of the genus Saccharum . Native to the warm temperate to tropical regions of South Asia, they have stout, jointed, fibrous stalks that are rich in sugar, and measure two to six metres tall...
plantations of Northeastern Brazil
Northeast Region, Brazil
The Northeast Region of Brazil is composed of the following states: Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe and Bahia, and it represents 18.26% of the Brazilian territory....
(Pernambuco
Pernambuco
Pernambuco is a state of Brazil, located in the Northeast region of the country. To the north are the states of Paraíba and Ceará, to the west is Piauí, to the south are Alagoas and Bahia, and to the east is the Atlantic Ocean. There are about of beaches, some of the most beautiful in the...
, Olinda
Olinda
Olinda is a historic city in the Brazilian state of Pernambuco, located on the country's northeastern Atlantic Ocean coast, just north of Recife and south of Paulista...
, Recife
Recife
Recife is the fifth-largest metropolitan area in Brazil with 4,136,506 inhabitants, the largest metropolitan area of the North/Northeast Regions, the 5th-largest metropolitan influence area in Brazil, and the capital and largest city of the state of Pernambuco. The population of the city proper...
) which they had also seized from Portugal. John Maurice, Prince of Nassau-Siegen, conquered the Portuguese possessions of Saint George del Mina
Elmina
Elmina, is a town in the Central Region, situated on a south-facing bay on the Atlantic Ocean coast of Ghana, about 12 km west of Cape Coast...
, Saint Thomas, and Luanda, Angola, on the west coast of Africa. After the dissolution of the Iberian Union in 1640, Portugal would reestablish its authority over the lost territories of the Portuguese Empire
Portuguese Empire
The Portuguese Empire , also known as the Portuguese Overseas Empire or the Portuguese Colonial Empire , was the first global empire in history...
.
The Portuguese started to develop townships, trading posts, logging camps and small processing factories. From 1764 onwards, there was a gradual change from a slave-based society to one based on production for domestic consumption and export. Meanwhile, with the independence of Brazil in 1822, the slave trade was abolished in 1836, and in 1844 Angola's ports were opened to foreign shipping. By 1850, Luanda was one of the greatest and most developed Portuguese cities in the vast Portuguese Empire
Portuguese Empire
The Portuguese Empire , also known as the Portuguese Overseas Empire or the Portuguese Colonial Empire , was the first global empire in history...
outside Mainland Portugal, full of trading companies, exporting (together with Benguela
Benguela
Benguela is a city in western Angola, south of Luanda, and capital of Benguela Province. It lies on a bay of the same name, in 12° 33’ S., 13° 25’ E...
) palm and peanut oil, wax, copal, timber, ivory, cotton, coffee, and cocoa, among many other products. Maize, tobacco, dried meat and cassava flour also began to be produced locally. The Angolan bourgeoisie was born. From the 1920s to the 1960s, strong economic growth, abundant natural resources and development of infrastruture, led to the arrival of even more Portuguese settlers.
The Portuguese
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
discovered petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
in Angola in 1955. Production began in the Cuanza basin in the 1950s, in the Congo basin
Congo Basin
The Congo Basin is the sedimentary basin that is the drainage of the Congo River of west equatorial Africa. The basin begins in the highlands of the East African Rift system with input from the Chambeshi River, the Uele and Ubangi Rivers in the upper reaches and the Lualaba River draining wetlands...
in the 1960s, and in the exclave of Cabinda
Cabinda (province)
Cabinda is an exclave and province of Angola, a status that has been disputed by many political organizations in the territory. The capital city is also called Cabinda. The province is divided into four municipalities - Belize, Buco Zau, Cabinda and Cacongo.Modern Cabinda is the result of a fusion...
in 1968. The Portuguese government granted operating rights for Block Zero to the Cabinda Gulf Oil Company, a subsidiary of ChevronTexaco, in 1955. Oil production surpassed the exportation of coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
as Angola's largest export in 1973.
| Angolan oil production rates | ||
|---|---|---|
| Year | thousand barrels per day | thousand cubic metres per day |
| 1974 | 172 | 27,346 |
| 1991 | 490 | 77,904 |
| 1995 | 635 | 100,957 |
| 2001 | 800 | 127,190 |
| 2006 | 1460 | 232,121 |
A leftist military-led coup d'état, started on April 25, 1974, in Lisbon, overthrew the Marcelo Caetano
Marcelo Caetano
Marcelo José das Neves Alves Caetano, GCTE, GCC, also spelled Marcello Caetano , was a Portuguese politician and scholar, who was the last prime minister of the Estado Novo regime, from 1968 until his overthrow in the Carnation Revolution of 1974....
government in Portugal, and promised to hand over power to an independent Angolan government. Mobutu Sese Seko
Mobutu Sese Seko
Mobutu Sese Seko Nkuku Ngbendu wa Za Banga , commonly known as Mobutu or Mobutu Sese Seko , born Joseph-Désiré Mobutu, was the President of the Democratic Republic of the Congo from 1965 to 1997...
, the President of Zaire, met with António de Spínola
António de Spínola
António Sebastião Ribeiro de Spínola , GCTE, ComA was a Portuguese soldier, conservative politician and author, who was important in the transition to democracy following the Portuguese Carnation...
, the transitional President of Portugal
President of Portugal
Portugal has been a republic since 1910, and since that time the head of state has been the president, whose official title is President of the Portuguese Republic ....
, on September 15, 1974 on Sal island in Cape Verde
Cape Verde
The Republic of Cape Verde is an island country, spanning an archipelago of 10 islands located in the central Atlantic Ocean, 570 kilometres off the coast of Western Africa...
, crafting a plan to empower Holden Roberto
Holden Roberto
Holden Álvaro Roberto founded and led the National Liberation Front of Angola from 1962 to 1999. His memoirs are unfinished.-Early life:...
of the National Liberation Front of Angola
National Liberation Front of Angola
The National Front for the Liberation of Angola was a militant organization that fought for Angolan independence from Portugal in the war of independence under the leadership of Holden Roberto. The FNLA became a political party in 1992....
, Jonas Savimbi
Jonas Savimbi
Jonas Malheiro Savimbi was an Angolan political leader. He founded and led UNITA, a movement that first waged a guerrilla war against Portuguese colonial rule, 1966–1974, then confronted the rival MPLA during the decolonization conflict, 1974/75, and after independence in 1975 fought the ruling...
of UNITA
UNITA
The National Union for the Total Independence of Angola is the second-largest political party in Angola. Founded in 1966, UNITA fought with the Popular Movement for the Liberation of Angola in the Angolan War for Independence and then against the MPLA in the ensuing civil war .The war was one...
, and Daniel Chipenda
Daniel Chipenda
Daniel Chipenda fought in the Angolan War of Independence, serving as the Popular Movement for the Liberation of Angola's field commander in the Eastern Front before founding and leading the Eastern Revolt, a faction of the MPLA. He later joined the National Liberation Front of Angola , but left,...
of the MPLA's eastern faction at the expense of MPLA leader Agostinho Neto
Agostinho Neto
António Agostinho Neto served as the first President of Angola , leading the Popular Movement for the Liberation of Angola in the war for independence and the civil war...
while retaining the façade of national unity. Mobutu and Spínola wanted to present Chipenda as the MPLA head, Mobutu particularly preferring Chipenda over Neto because Chipenda supported autonomy for Cabinda
Cabinda (province)
Cabinda is an exclave and province of Angola, a status that has been disputed by many political organizations in the territory. The capital city is also called Cabinda. The province is divided into four municipalities - Belize, Buco Zau, Cabinda and Cacongo.Modern Cabinda is the result of a fusion...
. The Angolan exclave has immense petroleum reserves estimated at around 300 million tons (~300 kg) which Zaire, and thus the Mobutu government, depended on for economic survival. After independence thousands of white Portuguese left, most of them to Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
and many travelling overland to South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
. There was an immediate crisis because the indigenous African population lacked the skills and knowledge needed to run the country and maintain its well-developed infrastructure.
The Angolan government created Sonangol, a state-run oil company, in 1976. Two years later Sonangol received the rights to oil exploration and production in all of Angola. After independence from Portugal in 1975, Angola was ravaged by a horrific civil war
Angolan Civil War
The Angolan Civil War was a major civil conflict in the Southern African state of Angola, beginning in 1975 and continuing, with some interludes, until 2002. The war began immediately after Angola became independent from Portugal in November 1975. Prior to this, a decolonisation conflict had taken...
between 1975 and 2002.
1990s
United Nations Angola Verification Mission IIIUnited Nations Angola Verification Mission III
The United Nations Angola Verification Mission III is a peacekeeping mission that began operating in Angola in February 1995 during the civil war. It was established by the United Nations Security Council in Resolution 976....
and MONUA
MONUA
The United Nations Observer Mission in Angola was established by United Nations Security Council Resolution 1118 of 30 June 1997.. Due to the collapse of the peace process in Angola, UN Secretary General recommended to the UN Security Council that MONUA's mandate not be renewed...
spent USD1.5 billion overseeing implementation of the Lusaka Protocol
Lusaka Protocol
The Lusaka Protocol, signed in Lusaka, Zambia on October 31, 1994, attempted to end the Angolan Civil War by integrating and disarming UNITA and national reconciliation. Both sides signed a ceasefire as part of the protocol on November 20.-Negotiation:...
, a 1994 peace accord that ultimately failed to end the civil war. The protocol prohibited UNITA from buying foreign arms, a provision the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
largely did not enforce, so both sides continued to build up their stockpile. UNITA purchased weapons in 1996 and 1997 from private sources in Albania
Albania
Albania , officially known as the Republic of Albania , is a country in Southeastern Europe, in the Balkans region. It is bordered by Montenegro to the northwest, Kosovo to the northeast, the Republic of Macedonia to the east and Greece to the south and southeast. It has a coast on the Adriatic Sea...
and Bulgaria
Bulgaria
Bulgaria , officially the Republic of Bulgaria , is a parliamentary democracy within a unitary constitutional republic in Southeast Europe. The country borders Romania to the north, Serbia and Macedonia to the west, Greece and Turkey to the south, as well as the Black Sea to the east...
, and from Zaire
Zaire
The Republic of Zaire was the name of the present Democratic Republic of the Congo between 27 October 1971 and 17 May 1997. The name of Zaire derives from the , itself an adaptation of the Kongo word nzere or nzadi, or "the river that swallows all rivers".-Self-proclaimed Father of the Nation:In...
, South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
, Republic of the Congo
Republic of the Congo
The Republic of the Congo , sometimes known locally as Congo-Brazzaville, is a state in Central Africa. It is bordered by Gabon, Cameroon, the Central African Republic, the Democratic Republic of the Congo , the Angolan exclave province of Cabinda, and the Gulf of Guinea.The region was dominated by...
, Zambia
Zambia
Zambia , officially the Republic of Zambia, is a landlocked country in Southern Africa. The neighbouring countries are the Democratic Republic of the Congo to the north, Tanzania to the north-east, Malawi to the east, Mozambique, Zimbabwe, Botswana and Namibia to the south, and Angola to the west....
, Togo
Togo
Togo, officially the Togolese Republic , is a country in West Africa bordered by Ghana to the west, Benin to the east and Burkina Faso to the north. It extends south to the Gulf of Guinea, on which the capital Lomé is located. Togo covers an area of approximately with a population of approximately...
, and Burkina Faso
Burkina Faso
Burkina Faso – also known by its short-form name Burkina – is a landlocked country in west Africa. It is surrounded by six countries: Mali to the north, Niger to the east, Benin to the southeast, Togo and Ghana to the south, and Côte d'Ivoire to the southwest.Its size is with an estimated...
. In October 1997 the UN imposed travel sanctions on UNITA leaders, but the UN waited until July 1998 to limit UNITA's exportation of diamonds and freeze UNITA bank accounts. While the U.S. government gave USD250 million to UNITA between 1986 to 1991, UNITA made USD1.72 billion between 1994 and 1999 exporting diamonds, primarily through Zaire to Europe. At the same time the Angolan government received large amounts of weapons from the governments of Belarus
Belarus
Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...
, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
, Bulgaria, the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, and South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
. While no arms shipment to the government violated the protocol, no country informed the U.N. Register on Conventional Weapons as required.
Despite the increase in civil warfare in late 1998, the economy grew by an estimated 4% in 1999. The government introduced new currency denominations in 1999, including a 1 and 5 kwanza note.
2000s
An economic reform effort was launched in 1998. The Angolan economy ranked 160 out of 174 nations in the United Nations Human Development Index of 2000. In April 2000 Angola started an International Monetary Fund (IMF) Staff-Monitored Program (SMP). The program formally lapsed in June 2001, but the IMF remains engaged. In this context the Government of Angola has succeeded in unifying exchange rates and has raised fuel, electricity, and water rates. The Commercial Code, telecommunications law, and Foreign Investment Code are being modernized. A privatization effort, prepared with World BankWorld Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
assistance, has begun with the BCI
Banco do Comércio e Indústria
Banco de Comércio e Indústria is a bank in Angola which was recently privatised. It is a subsidiary of Sonangol, the national petroleum company....
bank. Nevertheless, a legacy of fiscal mismanagement and corruption persists. The civil war internally displaced
Internally displaced person
An internally displaced person is someone who is forced to flee his or her home but who remains within his or her country's borders. They are often referred to as refugees, although they do not fall within the current legal definition of a refugee. At the end of 2006 it was estimated there were...
3.8 million people, 32% of the population, by 2001. The security brought about by the 2002 peace settlement has led to the resettlement of 4 million displaced persons, thus resulting in large-scale increases in agriculture production.
Angola produced over 3 million carats of diamonds per year in 2003, with its production expected to grow to 10 million carats per year by 2007. In 2004 China's Eximbank approved a $2 billion line of credit to Angola to rebuild infrastructure. The economy grew 18% in 2005 and growth was expected to reach 26% in 2006 and stay above 10% for the rest of the decade.
ChevronTexaco started pumping 50 koilbbl/d from Block 14 in January 2000, but production has decreased to 57 koilbbl/d in 2007 due to the poor quality of the oil. Angola joined the Organization of the Petroleum Exporting Countries on January 1, 2007.
Cabinda Gulf Oil Company found Malange-1, an oil reservoir in Block 14, on August 9, 2007.
Overview
Despite its abundant natural resources, output per capita is among the world's lowest. Subsistence agriculture provides the main livelihood for 85% of the population. Oil production and the supporting activities are vital to the economy, contributing about 45% to GDP and 90% of exports. Growth is almost entirely driven by rising oil production which surpassed 1.4 Moilbbl/d in late-2005 and which is expected to grow to 2 Moilbbl/d by 2007. Control of the oil industry is consolidated in Sonangol Group, a conglomerate which is owned by the Angolan government. With revenues booming from oil exports, the government has started to implement ambitious development programs in building roads and other basic infrastructure for the nation.In the last decade of the colonial period, Angola was a major African food exporter but now imports almost all its food. Because of severe wartime conditions, including extensive planting of landmines throughout the countryside, agricultural activities have been brought to a near standstill. Some efforts to recover have gone forward, however, notably in fisheries. Coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
production, though a fraction of its pre-1975 level, is sufficient for domestic needs and some exports. In sharp contrast to a bleak picture of devastation and bare subsistence is expanding oil production, now almost half of GDP and 90% of exports, at 800 koilbbl/d. Diamonds provided much of the revenue for Jonas Savimbi
Jonas Savimbi
Jonas Malheiro Savimbi was an Angolan political leader. He founded and led UNITA, a movement that first waged a guerrilla war against Portuguese colonial rule, 1966–1974, then confronted the rival MPLA during the decolonization conflict, 1974/75, and after independence in 1975 fought the ruling...
's UNITA
UNITA
The National Union for the Total Independence of Angola is the second-largest political party in Angola. Founded in 1966, UNITA fought with the Popular Movement for the Liberation of Angola in the Angolan War for Independence and then against the MPLA in the ensuing civil war .The war was one...
rebellion through illicit trade. Other rich resources await development: gold, forest products, fisheries, iron ore, coffee, and fruits.
This is a chart of trend of nominal gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
of Angola at market prices using International Monetary Fund data; figures are in millions of units.
| Year | Gross Domestic Product | US Dollar Exchange | Per Capita Income (as % of USA) |
|---|---|---|---|
| 1980 | 6.33 | ||
| 1985 | 4.46 | ||
| 1990 | 4.42 | ||
| 1995 | 5,066 | 14 Angolan Kwanza | 1.58 |
| 2000 | 9,135 | 91,666 Angolan Kwanza | 1.96 |
| 2005 | 28,860 | 2,515,452 Angolan Kwanza | 4.73 |
Foreign trade
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
10,530,764,911. The vast majority of Angola's exports, 92% in 2004, are petroleum products. US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
785 million worth of diamonds, 7.5% of exports, were sold abroad that year. Nearly all of Angola's oil goes to the United States, 526 koilbbl/d in 2006, making it the eighth largest supplier of oil to the United States, and to the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, 477 koilbbl/d in 2006. In the first quarter of 2008, Angola became the main exporter of oil to China. The rest of its petroleum exports go to Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
and Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
. U.S. companies account for more than half the investment in Angola, with Chevron-Texaco leading the way. The U.S. exports industrial goods and services, primarily oilfield equipment, mining equipment, chemicals, aircraft, and food, to Angola, while principally importing petroleum. Trade between Angola and South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
exceeded USD 300 million in 2007. From the 2000s many Chinese have settled and started up businesses.
Petroleum
Angola produces and exports more petroleum than any other nation in sub-Saharan AfricaSub-Saharan Africa
Sub-Saharan Africa as a geographical term refers to the area of the African continent which lies south of the Sahara. A political definition of Sub-Saharan Africa, instead, covers all African countries which are fully or partially located south of the Sahara...
, surpassing Nigeria
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
in the 2000s
2000s in Angola
The 2000s in Angola saw the end of a 27-year-long civil war and economic growth as foreign nation's began to invest in Angola's untapped petroleum reserves. The government continues to resettle internally displaced persons as its economy recovers and expands.-2000:Illicit arms trading...
. In January 2007 Angola became a member of OPEC
OPEC
OPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
. By 2010 production is expected to double the 2006 output level with development of deep-water offshore oil fields. Oil sales generated USD 1.71 billion in tax revenue in 2004 and now makes up 80% of the government's budget, a 5% increase from 2003, and 45% of GDP.
Chevron Corporation
Chevron Corporation
Chevron Corporation is an American multinational energy corporation headquartered in San Ramon, California, United States and active in more than 180 countries. It is engaged in every aspect of the oil, gas, and geothermal energy industries, including exploration and production; refining,...
produces and receives 400 koilbbl/d, 27% of Angolan oil. Elf Oil, Texaco
Texaco
Texaco is the name of an American oil retail brand. Its flagship product is its fuel "Texaco with Techron". It also owns the Havoline motor oil brand....
, ExxonMobil
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...
, Agip
Agip
Agip is an Italian automotive gasoline and diesel retailer established in 1926. It is a subsidiary of the multinational petroleum company Eni.In 2003, Eni S.p.A...
, Petrobras
Petrobras
Petróleo Brasileiro or Petrobras is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It is the largest company in Latin America by market capitalization and revenue, and the largest company headquartered in the Southern Hemisphere by market...
, and British Petroleum also operate in the country.
Block Zero provides the majority of Angola's crude oil production with 370 koilbbl/d produced annually. The largest fields in Block Zero are Takula (Area A), Numbi (Area A), and Kokongo (Area B). ChevronTexaco operates in Block Zero with a 39.2% share. SONANGOL, the state oil company, Total
Total S.A.
Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
, and ENI-Agip
Eni
Eni S.p.A. is an Italian multinational oil and gas company, present in 70 countries, and currently Italy's largest industrial company with a market capitalization of 87.7 billion euros , as of July 24, 2008...
own the rest of the block. ChevronTexaco also operates Angola's first producing deepwater section, Block 14, with 57 koilbbl/d.
The United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
has criticized the Angolan government for using torture, rape, summary executions, arbitrary detention, and disappearances, actions which Angolan government has justified on the need to maintain oil output.
Angola is the third-largest trading partner of the United States in Sub-Saharan Africa, largely because of its petroleum exports. The U.S. imports 7% of its oil from Angola, about three times as much as it imported from Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
just prior to the Gulf War
Gulf War
The Persian Gulf War , commonly referred to as simply the Gulf War, was a war waged by a U.N.-authorized coalition force from 34 nations led by the United States, against Iraq in response to Iraq's invasion and annexation of Kuwait.The war is also known under other names, such as the First Gulf...
in 1991. The U.S. Government has invested USD $4 billion in Angola's petroleum sector.
Diamonds
Angola is the third largest producer of diamonds in Africa and has only explored 40% of the diamond-rich territory within the country, but has had difficulty in attracting foreign investment because of corruption, human rights violations, and diamond smuggling. Production rose by 30% in 2006 and EndiamaEndiama
Endiama is the national diamond company of Angola and it is the exclusive concessionary of mining rights in the domain of diamonds. Angola's state-run diamond company Endiama produced 8.55 million carats of diamonds in 2010. Antonio Carlos Sumbula is the president of the corporation...
, the national diamond company of Angola, expects production to increase by 8% in 2007 to 10 million carats annually. The government is trying to attract foreign companies to the provinces
Provinces of Angola
Angola is divided into eighteen provinces:-See also:* ISO 3166-2:AO, the ISO codes for Angola....
of Bié
Bié (province)
Bié is a province of Angola. Located on Bié Plateau in central part of country. Its capital is Kuito and it has an area of 70,314 km² and a population of approximately 800,000. Municipalities in the province include Andulo, Nharea, Cunhinga, Chinguar, Chitembo, Catabola, Camacupa and Cuemba...
, Malanje
Malanje (province)
Malanje is a province of Angola. It has an area of 97,602 km² and a population of approximately 900,000. Malanje is the capital of the province. Municipalities in this province include Massango, Marimba, Cunda-dia-Baza, Caombo, Calandula, Cacuzo, Cuaba Nzogo, Mucari, Quela, Cambundi-Catembo,...
and Uíge.
The Angolan government loses $375 million annually from diamond smuggling. In 2003 the government began Operation Brilliant, an anti-smuggling investigation that arrested and deported 250,000 smugglers between 2003 and 2006. Rafael Marques, a journalist and human rights activist, described the diamond industry in his 2006 Angola's Deadly Diamonds report as plagued by "murders, beatings, arbitrary detentions and other human rights violations." Marques called on foreign countries to boycott Angola's "conflict diamonds".
Iron
Under Portuguese rule, AngolaAngola (Portugal)
Angola is the common name by which the Portuguese colony in southwestern Africa was known across different periods of time...
began mining iron
Iron
Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...
in 1957, producing 1.2 million tons in 1967 and 6.2 million tons by 1971. In the early 1970s, 70% of Portuguese Angola's iron exports went to Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
and Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
. After independence in 1975, the Angolan Civil War
Angolan Civil War
The Angolan Civil War was a major civil conflict in the Southern African state of Angola, beginning in 1975 and continuing, with some interludes, until 2002. The war began immediately after Angola became independent from Portugal in November 1975. Prior to this, a decolonisation conflict had taken...
(1975–2002) destroyed most of the territory's mining infrastructure. The redevelopment of the Angolan mining industry started in the late 2000s.
Further reading
- McCormick, Shawn H. The Angolan Economy: Prospects for Growth in a Postwar Environment, 1994.
- OECD, International Energy Agency. Angola: Towards an Energy Strategy, 2006.
- Making Finance Work for Africa (MFW4A): Angola Financial Sector Profile,