With its growing economy and steadily increasing employment resources, Angola is a country that is set to become Africa’s brightest star in the medium term. Recently, due to my work, I had the opportunity to spend more than a week in the beautiful capital city of Luanda. During this visit, I also had the opportunity to follow the development of Angolan industry more closely. First of all, I would like to point out that the industrial and commercial activities here have largely entered the Chinese axis. Chinese factories, industrial sites, shopping malls and shops are visibly candidates to become the locomotives of the country’s economy.
The Chinese industrial neighborhoods established in the capital Luanda not only create employment for thousands of local and foreign personnel, but also provide significant support for the mobilization of capital in the country. There are two products that can be considered as the lifeblood of the Angolan economy. These are oil and diamond trade. Currently, Angola is the country with the second-largest oil reserves in Africa and ranks 16th in the world. This alone clearly shows the importance of Angola for the world economy.
In this article, I would like to focus mainly on Chinese investments within the country. China has extended significant financial assistance to African nations abundant in natural resources, particularly focusing on Angola, located in the southwestern part of the continent. China’s financial support to Angola represents over 25 percent of the total loans across Africa, thereby making it the largest source of lending for Angola. In exchange, China has gained access to African natural resources, particularly those in Angola, to address its considerable energy demands within the country.
Since the civil war ended in 2002, Angola has seen significant economic progress through the development of infrastructure and an increase in oil production and exports, largely thanks to loans from China. Angola has established itself as the foremost African provider of petroleum to China, repaying a significant portion of its debt to China with oil production. Known as the “Angolan model,” this contractual setup has received worldwide attention and faced backlash. Following the end of the civil war in 2002, Angola received substantial investments from China. Initially, the country turned to the International Monetary Fund (IMF) to secure funds for its reconstruction initiatives. The moment you land at the airport in Angola, you are welcomed by a significant Chinese impact that has seeped into the deepest layers of the city and the entire nation.
The total amount of loans from China to Angola has continued to grow, exceeding $40 billion. Besides supporting infrastructure projects tied to the oil sector, China has also invested in the development of railroads, ports, and housing through these loans. In a meaningful context, China has been heavily involved in the nation-building initiatives in Angola, and the oil imported from Angola is instrumental in supporting China’s accelerated economic growth (this is true win-win situation).
Let’s examine the role of China, particularly in terms of financing, within Angola’s petroleum sector. Involvement in Angola’s oil market by China was developed through a cooperative alliance with Sonangol, a significant government-owned corporation headquartered in Luanda. The operations of China National Petroleum Corporation, China Petroleum and Chemical Corporation, and China National Offshore Oil Corporation are not independent, as their engagement in Angola relies exclusively on their connection with Sonangol.
With a goal to cultivate non-oil industries, Angola is making a strong push for private investment. As this strategy progresses, it is expected that China’s role will become more prominent in the near future. As 65 percent of Angola’s 35 million people are aged 25 and below, the most effective strategy for the nation is to enhance its local industrial sector. This young population is facing a pressing demand for jobs and employment opportunities. The Lebanese, Eritrean, and Chinese diaspora groups have made significant investments in Angola’s fertile regions, leading to the creation of various job opportunities for a large number of people. Angola is experiencing a major industrial shift, primarily fueled by the activities of Chinese-owned enterprises.
The Viana industrial zone, located in Luanda, the capital, has turned into a vibrant Chinatown, brimming with Chinese factories and shopping malls. These sectors are pivotal to the economy of the country, especially in areas such as construction and heavy industry. There is a noticeable rise of Chinese products in the Angolan market, dominating not only the heavy industry and construction sectors but also making significant inroads into areas like raw materials, plastics, and cosmetics.
Angola 2023 Top Imports Partners :
China: 3,3 Billion $
Portugal: 1,64 Billion $
United Arab Emirates: 1,11 Billion $
India: 1,02 Billion $
United States: 862 Million $
Angola 2023 Top Export Destinations :
China: 17,1 B $
India: 3.87 B $
United Arab Emirates: 2.75 B $
Spain: 2.65 B $
Netherlands: 2.09 B $
As a consequence, it is apparent that Angola’s economic foundation is built on oil, and the significant quantities of this product being traded with China are the strongest indication of the well-established and growing relationship between the two countries. As of today, there are about 260,000 Chinese residents in Angola who are involved in both industrial and commercial activities. This number stands out as the key sign of the solid and forward-thinking connection between China and Angola.
