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ANGOLA’S ECONOMIC REPORT 2012

CENTRE OF STUDIES AND SCIENTIFIC INVESTIGATIONOF UNIVERSIDADE CATÓLICA DE ANGOLA (CEIC / UCAN)

PATRON – D. Damião FranklinDIRECTOR – Alves da Rocha

ANGOLA’S ECONOMIC REPORT 2012COORDINATOR – Alves da Rocha

António CostaJoão FonsecaMarília PoçasFernando PachecoRegina SantosAna Duarte (Lusíada Polytechnic Higher Institute, Benguela)

WITH THE COLLABORATION OF THE CHRISTIAN MICHELSEN INSTITUTEIvar KolstadArne WiigOdd-HelgFjeldstadSoren Kirk JensenAslak Orre

RESEARCH AND DATA COLLECTION (UCAN STUDENTS)Paxote GunzaWilson Fonseca da Silva

PERMANENT RESEARCHERSAlves da RochaFrancisco PauloNelson PestanaPaxote GunzaPedro Vaz PintoPrecioso DomingosRegina SantosSendi Baptista

COLLABORATING RESEARCHERSAntónio CostaAmália QuintãoCláudio FortunaEduardo Vundo SassaEmílio LondaFernando PachecoJosé OiliveiraLuís BonfimMiguel ManuelMilton ReisRui SeambaSalim ValimamadeVera Daves

ADMINISTRATION AND FINANCEMargarida TeixeiraLúcia CoutoEvadia KuyotaAfonso Romão

INDEX

LIST OF ACRONYMS ........................................................................................ 6PRESENTATION ................................................................................................ 7INTRODUCTION ............................................................................................... 11

1. The world economy and the external environment of the Angolan economy ............................................................................... 19

2. Monetary and Fiscal Policy ............................................................................ 24 2.1 Objectives of the Monetary and Fiscal Policy …………................................ 24 2.2 Money Market, exchange rate and monetary aggregates ……………......... 26 2.3 Currency Exchange Market and exchange rates …………………………………... 41 2.4 Banking System ………………………………………………………………………………...... 43

3. Overall level of the economic activity ........................................................... 53 3.1 General considerations ............................................................................ 53 3.2 Economic activity ..................................................................................... 59 3.3 Sectoral analysis of the Gross Domestic Product ..................................... 64 3.3.1 Agriculture, livestock and forestry .................................................. 64 3.3.1.1 Production behaviour .......................................................... 64 3.3.1.2 Agrarian Policies .................................................................. 70 3.3.2 Manufacturing industry .................................................................. 78 3.3.2.1 Production behaviour .......................................................... 81 3.3.2.2 Industrial policies ................................................................ 91 3.3.3 Oil Extraction ................................................................................... 94 3.3.3.1 Production behaviour .......................................................... 94 3.3.3.2 The Oil Policy ....................................................................... 100 3.3.4 Extraction of diamonds and other minerals .................................... 105 3.3.4.1 Production behaviour .......................................................... 105 3.3.4.2 Diamond Policies ................................................................. 109 3.3.5 Construction and Public Works ....................................................... 109 3.3.5.1 Production behaviour .......................................................... 109 3.3.5.2 Public Investments .............................................................. 114 3.3.5.3 The Construction Sector policies ......................................... 115 3.3.6 Transports ....................................................................................... 121 3.3.6.1 General remarks .................................................................. 121 3.3.6.2 The provision of transport services ..................................... 131 3.3.6.3 Transport Sector policies ..................................................... 143 3.4 The External Sector .................................................................................. 146

4. The structural economic transformations in Angola and in Sub-Saharan Africa (samples from 17 countries)............................... 151

4.1 Preliminary remarks ................................................................................. 151 4.2 Structural changes in Sub-Saharan Africa ................................................ 157


4.2.1 Macroeconomics of the sample countries ...................................... 157 4.2.2 Industry ........................................................................................... 160 4.2.3 Agriculture....................................................................................... 173 4.2.4 The coefficients of structural transformation ................................. 180

5. Employment and productivity ....................................................................... 191 5.1 Introduction ............................................................................................. 191 5.2 Estimates of unemployment and of value of productivity in Angola ........ 193 5.3 Estimates of unemployment up to 2017 .................................................. 205

6. Growth perspectives ...................................................................................... 211 6.1 The world economy and Angola’s main economic partners .................... 211 6.2 The Angolan economy .............................................................................. 213 6.2.1 Introduction .................................................................................... 213 6.2.2 The ‘‘Mini-Golden Age’’ of Angola’s growth ................................... 214 6.2.3 Future challenges and sustained growth in

Angola (2012/2017) ........................................................................ 218 6.2.4 The evolution of GDP tendency trends between

2000 and 2017 ................................................................................ 221 6.2.5 The tendency behaviour of GDP per inhabitant .............................. 224 6.2.6 The probability of the stationary state of Solow ............................. 227 6.2.7 An approximate calculation of return on public investments ......... 228

7. Review of the major economic events of 2012 ............................................. 232

8. Monograph of the economic situation in Huambo ...................................... 270 8.1 Geographical characterization ................................................................. 270 8.2 Administrative and demographic characterization .................................. 271 8.3 Economic characterization ....................................................................... 272

BIBLIOGRAPHY ................................................................................................. 293

LIST OF ACRONYMS

ABANC – Associação de Bancos Comerciais

AIA – Associação Industrial de Angola

BDA – Banco de Desenvolvimento de Angola

BNA – Banco Nacional de Angola

CEIC – Centro de Estudos e Investigação Científica

EMIS – Empresa Interbancária de Serviços

GEPE – Gabinete de Estudos Planeamento e Estatística

GVA – Governo de Angola

IBEP – Inquérito Integrado do Bem-estar da População

IDA – Instituto de Desenvolvimento Agrário

INE – Instituto Nacional de Estatística

INEA – Instituto Nacional de Estradas de Angola

Kwanza – Unidade Monetária de Angola

MAPESS – Ministério da Administração Pública, Emprego e Segurança Social

MINADERP – Ministério da Agricultura, Desenvolvimento Rural e Pescas

MINAGRI – Ministério da Agricultura

MPLA – Movimento Popular de Libertação de Angola

PIP – Programa de Investimentos Públicos

REER – Real Effectiveness Exchange Rate

SIGMA – Sistema de Gestão de Mercados de Activos

TBC – Títulos do Banco Central

UCAN – Universidade Católica de Angola

UNITA – União Nacional para a Independência Total de Angola

ABANC – Association of Commercial Banks

AIA – Industrial Association of Angola

BDA – Development Bank of Angola

BNA – National Bank of Angola

CEIC – Centre of Studies and Scientific Investigation

EMIS – Interbank Services Company

GEPE – Office for Studies, Planning and Statistics

GVA – Government of Angola

IBEP – Integrated Survey of Population Welfare

IDA – Institute of Agrarian Development

INE – National Statistics Institute

INEA – National Road Institute of Angola

Kwanza – Currency of Angola

MAPESS – Ministry of Public Administration, Employment and Social Security

MINADERP – Ministry of Agriculture, Rural Development and Fisheries

MINAGRI – Ministry of Agriculture

MPLA – Popular Movement for the Liberation of Angola

PIP – Public Investment Programme

REER – Real Effectiveness Exchange Rate

SIGMA – Management System of Market Assets

TBC – Central Bank Securities

UCAN – Catholic University of Angola

UNITA – National Union for the Total Independence of Angola

CEIC / UCAN

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ANGOLA’S ECONOMIC REPORT 2012PRESENTATION

Most certainly, a considerable part on the path towards recovery and

war and therefore more conducive to a positive return on their efforts and investments. The decrease of the poverty index1 was due mainly to the will of

and collective structural transformation, withdrawing gains from their living

distributed.

challenges that economies face. It is an endless and ongoing process where absolute equality does not exist. Ethics and morals play a big part in this.

Income distribution is a normal economic process, with mechanisms and proper procedures to ensure the remuneration of production factors and processes involved in the creation of annual GDP. However, in most cases,

1 According to INE and IBEP, there is no way to compare the poverty rates of the Survey to the Family Income and Expenditure of 2002 and the IBEP (2008/2009).

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a more balanced national income distribution, in order to preserve social

taxes charged by the State to individual persons and by transfers to families for different reasons. These are some of the compensation mechanisms contemplated by the Economic Theory and some of the practices found in

stable and economically healthier.

That is not what is to be found in most developing countries – emerging and

means of the well-known rent-seeking2.

Nearly every year The Economic Report includes some new features.

The 2010 and 2011 Reports presented analysis based on the process of

to be treated completely autonomously in the Report. In the 2012 Report, the

sector is also included in the Economic Report, given its growing weight in GDP

sector will be further analysed from this year’s Economic Report onwards, due to

of external economies. The regional analysis is maintained, this year with a study of the economy of the Huambo province.

2 rent seeking is a set of administrative practices and notices that aim to distribute the oil revenue for a restricted group of agents connected to the political power, by favouring the privatization of state purchases, access to credit, public procurement, creation of companies, state sponsorship, etc.

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3, however, this has not been a major

achieved between the family members of the MPLA party4. But not only that.

There are other risk elements in the Angolan economy: the elevated dependency on oil – the country’s international reserves, while confidence indicators for foreign private and public institutions, will permanently find

the World Bank’s report Doing Business 2013), high level of economic control

2011 placed Angola in 138th place, amongst 141 countries), considering lack

3 Notwithstanding maintaining its relative position in this African ranking index (40th) Angola has improved in its composite value (35 in 2006, 36 in 2007, 39 in 2008, 41 in 2009, 43 in 2010 and 44 in 2011 and 2012), which led to Mo Ibrahim, in the presentation of his

in some of the governance items, such as Liberia, DRC, Republic of Congo, Zambia, Rwanda and Sierra Leone.

4 See Africa Monitor Intelligence, no 742.

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economic growth in Angola. They surely are elements that experts will consider

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One of the most remarkable events in 2012

mechanisms. It is an indicator of political stability within a country and an important factor to attract private investment, the only one that makes the market economy to work in terms of economic freedom and affirmation of

would not have been felt in 2012, but will surely be reflected in 2013 and

Approximately ten years ago, a large worldwide controversy rose surrounding

the best way to create an economic policy that would, especially, ensure

intervention in the economy, which generated fiscal deficit and public debt unmanageable with their own and national resources, and presently, by an equally excessive neoclassical austerity through the depression of aggregate

INTRODUCTION

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into play precisely regarding last year’s election results of 31 August. The reading of the general and provincial results does make one think of the

of opportunities and income and is intended to be Keynesian. But it only

(economic and social return) of public capital (public investment) applied in diverse works5. Keynes said that to keep the business cycle high, the state should

costs without originating significant effects on aggregate domestic demand,

power, even when it is not marginal, nonetheless originates a scarce amount of

6 A quick read makes you think we are

5 An important question arises regarding the technical basis of budget choices, both in terms of taxes and mainly of expenditure. i.e., the extent to which policy choices are made with technical foundations – studies of impact assessment and economic and social

on the analysis of economic and political decision-making with an evident and natural application in the budgetary sphere. In this framework, the answer to the question above points to the negative direction, i.e., in Angola these studies and evaluations are not performed, thus allowing known “faults or failures of government” to be mentioned.

pressure, legislative logrolling (exchange of vows between political parties aimed at ensuring mutual approval of proposals and laws of different parliamentary groups) and bureaucratic behaviour in decision making.6 Angola has maintained its place in the 133, 2012 Democracy Index, constructed by the

(zero to ten): electoral process and pluralism – 0.92 (worsened compared to 2011:1,33); government performance – 3.21; political participation – 5,0 (improved compared to

3.35, an improvement over the 3.32 recorded in 2011.

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faced with one thought and an apparent general consensus on the economic

wealth. The majority of voters in all provinces approved this model.

There was an electoral proposal – Government Program and Election Manifesto – prepared with great care and which must have cost a small fortune

content – made up of many pages containing quite a lot of detail7 – interpreted

8

9 indicate a loss of more than one million

they have (around 5 million people) it turns out that not all of these militants gave their vote to the party (4144779 seem to have been the voters that preferred it10

census of 9757671 electors and the total clearance of votes11 (5999600), the rate 12,

7

the next election in 2017.8 In the Global Competitiveness Index of 2001-2012 (World Economic Forum) Angola occupies the 139th position among 142 countries, having worsened its competitiveness from 2010 to 2011. In two items – presented in the electoral campaign as representing

attribution of infrastructures, the World Economic Forum Report places Angola in 140th

the predicate of education and vocational training Angola occupies the very last position.9 Jornal de Angola, September 5 and Semanário Expansão, September, 7. 10 Semanário Expansão, September, 7. 11 Jornal de Angola, September, 5. 12 No adjustment to the election census is publicly known, therefore it has been used as the basis of calculating the abstention rate.

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13.

model of government as a reference.

Although it is said that provinces such as Malanje, Kwanza North, Namibia

Is it synonymous with modernity and total democracy or is it a sign of

with money from the State budget.

to the proposals and achievements made by the party.

MPLA and associated with a more rural type of vote.

13

everywhere – polling places far away from places of residence, apolitical disinterest and self-indulgence foreknowledge of the winner (due to the disproportionate material,

and lack of freedom of expression during the election campaign.

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MPLA’s electoral scores above this value.

that they have not received proposals other than those presented by the largest

of their promises, unshakable militancy and faith in the party, or incompetence

counter proposals.

20

40

60

80

100Bengo

Cunene

Cabinda

Bié

Benguela

LuandaSouth Kwanza

North Kwanza

K. Kubango

Huíla

Huambo

Uíge

Namibe

Moxico

Malange

South Lunda

North Lunda

Zaire

0

VOTE IN MPLA AND NATIONAL AVERAGE

0102030405060708090

100

Beng

oBe

ngue

la Bié

Cabi

nda

Cune

ne

Huam

bo

Huíla

K. K

uban

goNo

rth K

wan

zaSo

uth

Kwan

za

Luan

daNo

rth Lu

nda

Sout

h Lu

nda

Mal

ange

Mox

icoNa

mib

e

Uíge

Zaire

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In contrast, in five provinces the electoral proposals were eventually

THE SINGLE THOUGHT PROVINCES

82,4884,0385,0585,7088,3392,4687,33

Cune

ne

Huíla

Nam

ibe

North

Kw

anza

Sout

h Kw

anza

Mal

ange

Mox

ico

% MPLA

THE MOST DEMOCRATIC PROVINCES

71,82

60,7960,7959,3058,55 59,40

Sout

h Lu

nda

Beng

uelaBié

Luan

da

Cabi

nda

% MPLA

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From another point of view, it is concluded that in provinces where the GDP per capita is higher, the MPLA vote was lower, leading us to assume that a higher level of understanding and insight from voters exists, probably linked to more

Luanda and Benguela, which have the highest added value per person. But there are other cases where higher education and political culture seems to have played against the vote for the MPLA.

HIGHEST VOTE IN MPLA WHERE GDP PER INHABITANT IS LOWER

00,501,001,502,002,503,003,504,004,50

Beng

oBe

ngue

la Bié

Cabi

nda

Cune

ne

Huam

boHu

ílaK.

Kub

ango

North

Kw

anza

Sout

h Kw

anza

Luan

daNo

rth Lu

nda

Sout

h Lu

nda

Mal

ange

Mox

icoNa

mib

eUí

geZa

ire

2012 vote

NOTE: Graph on a logarithmic scale.

PIB per capita

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CEIC / UCAN

In general terms, and in accordance with the previous graph, there is greater

Bengo

Cunene

Cabinda

Bié

Benguela

Luanda South Kwanza

North Kwanza

K. Kubango

Huíla

Huambo

Uíge

Namibe

Moxico

Malange

South Lunda

North Lunda

4,00

Zaire3,00

2,00

1,00

0

VOTE IN MPLA AND GDP PER CAPITA

PIB per capita2012 vote

NOTE: Graph on logarithmic scale.

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1. THE WORLD ECONOMY AND THE EXTERNAL ENVIRONMENT OF THE ANGOLAN ECONOMY

The general external context of national economy was influenced by the prevailing economic crisis in world economy, not yet recovered from the economic plunge of 2008 and 2009. It is probably hard to imagine that American and European subprime would have such a global impact and for so long.

The overview of world economy in 2012 had a relatively weak growth

The World Bank admits that a sustained recovery of the world economy is

the main driver of global growth, but their output has slowed down, compared with the pre-crisis period. To regain pre-crisis growth rates, developing countries

14.

The Table below gives an overview of the behaviour of the world economy

14 World Bank, Global Economic Prospects, January 2013.

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EVOLUTION OF THE WORLD ECONOMY

World Economy 5,1 5 –0,7 5,1 3,8 3,5

Developed Economies 3,0 2,7 1,7 3,1 1,6 1,4

European Union 3,1 1,1 –4,2 2 1,7 –0,1

Euro Zone 2,8 2,6 –4,3 1,8 1,6 –0,5

United States 2,9 2,2 –3,5 3 1,5 2,2

Japan 2,4 –0,6 –6,5 –0,3 –0,5 2,3

Emerging Economies 7,9 8,0 2,8 7,3 6,4 6,1

Brazil 3,8 5,4 4,9 7,5 2,9 3,0

China 11,6 11,9 9,2 10,3 9,5 8,2

Índia 9,8 9,3 8,0 9,9 7,4 7,1

South Africa 5,1 3,6 –1,7 2,9 3,1 3,2

SOURCE: .

Global Economy and 2012, to which the so-called emerging economies must have contributed in a decisive way, as acknowledged, for example, by the World Bank. Their

Developed Economies – the performance of the developed economies during the period of 2007-2012 was characterized, particularly in Europe, by problems arising from financial management and budgetary deficient,

European Union – the performance of the EU economy was pro-cyclical,

the UK.

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Eurozone – in the context of the world economy, the Eurozone is the

of the Eurozone countries. Signs of recovery are slow to arrive, even in the all-powerful economies of Germany and France. This may pose a threat to Angola,

Emerging Economies – between 2007 and 2012, the average annual growth

Brazil (even though, for the last two years of this period, facing a growth crisis

States, that are struggling with structural problems).

Sub-Saharan AfricaSaharan Africa is naturally influenced by the financial crisis of 2008/2009,

trade. Between 2004 and 201215 the Sub-Saharan economy grew at an average

institutions – International Monetary Fund, World Bank, Organization for Economic Cooperation and Development (OECD), Economic Commission for Africa United Nations, UNCTAD, African Development Bank – Sub-Saharan Africa has registered remarkable progress in the last ten years (2000-2010)16.

15

16 “Many countries in Sub-Saharan Africa have experienced unprecedented high, sustained economic growth over the last two decades,” International Monetary Fund, all-Region

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periods of economic growth in sub-Saharan Africa, where the rhythms and

Economic growth in Sub-Saharan Africa has been robust since 2004, with an

In terms of trend, the graph on the following page shows how the Sub-Saharan

analysis and corresponding conclusions, by implementing a series of long-

LONG TERM TRENDS OF SUB-SAHARAN ECONOMY

SOURCE: International Monetary Fund – Regional Economic Outlook, Sub-Saharan Africa (several years).

0

2

4

6

8

1

3

5

7

GDP growth rate Trend rate

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1991

-200

0

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Demographic growth in Africa has been regarded as one of the obstacles

regional space in the world to be living the acute phase of transition from one archaic demographic regime to a modern one, in the sense previously

17.

The consequences of uncontrolled demographic growth are disastrous: decreased food subsistence, despite a high percentage of the population engaging in

centres and growth of informal economies.

17 “Some Structuring Issues of the Angolan Economy” (Alves da Rocha, Kilombelombe, 2011) presents an exercise on the optimal size of the population in Angola, given the challenges that are on the table of political and economic decisions, and of which structural

REAL GROWTH RATE OF GDP IN SUB-SAHARAN AFRICA (%)

2009/20121989/2008 1990/2000 2000/2009 2000/2010

3,4

2,5

5,1 5,04,6

SOURCE: World Bank – World Development Report, several years. IMF, Regional Economic Outlook.

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2. MONETARY AND FISCAL POLICY

a. Using the interest rate as the main instrument of monetary policy.

b.and to disclose the basis of this decision to the market.

c. Adopt an inflation target as the nominal anchor in the formation of

d.it to the public, this means that the monetary authority will act in the

.

In 2012which made decisions based on the evolution of the indicators, with a view

decisions18

where the maintenance of low interests was favored, together with the stability of the exchange rate allowed to promote price stability. In real terms, interest

same way on deposits interest rates.

18

determining the interest rate on credits.

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The Foreign Exchange managed to maintain a stable exchange rate, having

The New Exchange Regime for the Petroleum Sector (RCSP) approved a law which is being introduced in scheduled and which impacts fundamental changes

control the exchange rate.

flow of foreign currency overseas, also allowing better management of the Balance of Payments. As the notice revokes, import of goods does still not

date of shipment. However, new control procedures have been adopted, which

control of licensing procedures for goods, capital and invisibles. In the case of

availability in SINOC, preventing payments not licensed by the Ministry of

Overall, the year 2012 was less intense in terms of new legislation and

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19

foreign currency intended for the payment of import, export and re-export

20

cheques in the Payment System of Angola (SPA)

Clearing of Checks subsystem

SOURCE: BNA

2.2 Money Market, interest rates and monetary aggregates

DEBT AUCTIONS – PRIMARY MARKET

Billion Kz Ratios (%)

2011 2012 Var.% 2011 2012BT Issued 376 157 –58 Proposed 757 349 –54 BT 201 222 Sold 333 144 –57 Sales/Demand 44 41OT Issued 73 187 155 Proposed 36 105 195 OT 49 56 Sold 29 84 186 Sales/Demand 82 80REPOs Issued 73 1.600 2.078

Proposed 36 867 2.331 REPOs 49 54 Sold 29 730 2.383 Sales/Demand 82 84

TBC Issued 962 1.154 20 Proposed 593 1.011 71 TBC 62 88 Sold 406 757 87 Sales/Demand 68 75

19 Notices 3/12 to 18/12 are not shown in this table because they were approved in 2011 but only published in DR 1st series in 2012. Notice 23/12 was not published.20

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Central Bank Bonds

The accumulated volume of TBC in terms of supply, demand and sales were,

21 of

volume of TBC being inferior to that of redemptions, the existence of TBC reduced from 172 billion Kwanza in December 2011 to 88 billion kwanza in

interbank money market).

The ratio between the accumulated amount requested (demand) and emission (offer)22

previous year. In terms of demand, the improvement of liquidity to the banking

2nd quarter compared to Q1 of 2012 and the ratio of demand, over supply,

21

expenditures and allow the BNA to reduce the stock (existence) of securities on the market,

22 Bid-to-cover ratio in English terminology.

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Treasury Bills

billion Kwanza between December 2011 and December 2012.

SUMMARY OF ISSUANCE OF PUBLIC DEBT SECURITIES

Year of emission Instrument Finality Diploma

Billion KzDegree of

Limit of emission Sales

2012 OTMN -NR PIP Degr.exec.68/12 94,4 OTMN -TXC PIP Degr.exec.81/12 192,8 Sub total 287,2 84,0 OTMN -NR BNA Degr.exec.207/12 95,0 BT Funded debt Despach 725/12 87,3 BT – 72,3 BT Total Degr.exec.83/12 159,6 144,0 Total OT e BT 541,8

2011 OTMN -TXC OGE funding Despach 253/11 142,5 25,6 BT Total Deg.Pres.36/11 570,0 336,5

Total OT e BT 712,5

SOURCE: NOTE: OTMN – Treasury Bonds in Local Currency; BT – Treasure Bills; TXC.

1T11 2T11 3T11 4T11 1T12 2T12 3T12 4T120

400 67

9482

61

88

61

8191

200

600

800

1.000Bi

llion

Kz

Perc

enta

ge

0

50

75

100

150

125

DEMAND OVER OFFER RATIOOF CUMULATIVE QUARTERLY TBC

25

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Treasury Bonds

In 2012, treasury bonds in local currency (OTMN) were issued following these guidelines: (i) indexed to the exchange rate of the dollar (OTMN-TXC) and (ii) non-

Compared to the previous year, where there were no OTMN-NR emissions, their issuance in 2012 may have to do with the existence of stricter exposure exchange

23.

A special broadcast of OTMN worth 270 billion Kwanza was also made,

the BNA, passed in 2010. In June 2012, the Ministry of Finance held 95 billion Kwanzas24

these bonds is 20 years, with no right to the allowance coupon interest, and BNA

market through outright sales or repurchase, at market prices.

In 2012, the value of redeemed OTMN reached 78 billion kwanza, of which

000 million Kwanza at the end of the period.

23 Notice no. 5/10 of November 18.24 Presidential Decree 96/12 of 30 May. In cases involving a direct emission it does not appear in SIGMA, but is nevertheless registered in BNA’s own portfolio.

OTMN SALE IN PRIMARY MARKETMATURITY IN 2011

38%

15%

30%

17%

OTMN SALE IN PRIMARY MARKETMATURITY IN 2012

31%

28%

20%

21%

SOURCE: BNA.2 years 3 years 4 years 5 years

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Reference interest rate in Kwanzas

unchanged in subsequent months. The lending rate for BNA overnight

REFERENCE INTEREST RATES IN KWANZAS

0%

20%

15%

25%

5%

10%

30%

35%

Dec 2

008

Mar

200

9Ju

n 20

09Se

pt 2

009

Dez 2

009

Mar

201

0Ju

n 20

10Se

pt 2

010

Dec 2

010

Mar

201

1Ju

n 20

11Se

pt 2

011

Dec 2

012

Sept

201

2

Jun

2012

Mar

201

2

Dec 2

011

RediscountTBC 63 days

MMI – OvernightKey interest rate - Rate BNA

SOURCE: BNA.

0

200

600

400

800

1.000

Dec 2008 Dec 2009 Dec 2010 Dec 2011 Dec 2012

TREASURY SECURITIES - EXISTENCE AT THE END OF THE YEAR

SOURCE: BNA.

Billi

on K

z

OTMN BT

585

126

162

528

102

564

256

462

104

736

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Overnight LUIBOR interest rates charged by commercial banks in the Interbank

25

In the Primer Money Market, interest rates of the Central Bank Bonds (TBC)

stable throughout the year.

25

interest rate for the remaining maturities (1, 3, 6, 9 and 12 months) corresponds to an implicit value of transactions (i.e. intentions of transactions that will not materialize).

0

20

15

5

10

25

30

TBC – NOMINAL FEES (PRIMARY MARKET)

182 days63 days28 days 91 days14 days

Dec 2

007

Jun

2008

Dec 2

008

jun

2009

Dec 2

009

Jun

2010

Dec 2

010

Jun

2011

Dec 2

012

Jun

2012

Dec 2

011

SOURCE: BNA.

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maturity (5 years)26.

INTEREST RATES – TREASURY BONDS IN NATIONAL (OTMN),2011 and 2012 emissions

2 years 3 years 4 years 5 years 6 yearsOTMN -TXC

OTMN -NR –

SOURCE: BNA.

Banking System interest rates

In turn, the interest rates of loans for foreign currency (ME) showed an increasing trend for a period of 181 days to 1 year, and over 1 year, having

26 In 2012 no emissions were made for a term of six years.

0

20

15

5

10

25

30

BT – NOMINAL FEES (PRIMARY MARKET)

364 days182 days91 days

Dec 2

007

Jun

2008

Dec 2

008

Jun

2009

Dec 2

009

Jun

2010

Dec 2

010

Jun

2011

Jun

2012

Dec 2

011

Dec 2

012

SOURCE: BNA.

| 33


Interest rates on term deposits showed a general trend of decline in 2012,

For term deposits in foreign currency, the interest rate of the deposits within 180

0

5

10

15

20

25


INTEREST RATES - CREDIT TO NC (%)

From 181 days to 1 yearUp at 180 days Over 1 year

SOURCE: BNA. NC: National currency

0

2

8

12

16

4

6

10

14


INTEREST RATES – CREDIT TO FC (%)

From 181 days to 1 yearUp to 180 days Over 1 year

SOURCE: BNA. FC. Foreign Currency

34 |

CEIC / UCAN

Monetary Aggregates

nominal terms).

0

2

8

12

14

4

6

10


INTEREST RATE – TERM DEPOSITS NC (%)

Term. dep. 90 to 180 daysTerm. dep. upto 90 days

Term. dep. 181 – 1 year Term. dep. over 1 year

SOURCE: BNA.

0

2

1

5

7

8

3

4

6


INTEREST RATES – TERM DEPOSITS FC (%)

Term dep. 90 to 180 daysTerm dep. up to 90 days

Term dep. 181 – 1 year Term dep. over 1 year

SOURCE: BNA.

| 35


Kwanza (equivalent of 32.9 billion USD) in December 2012, up from 2.902 billion kwanza (30,5 billion USD) in 2011.

MONETARY SYNTHESIS

In Kz billions Dec -08 Dec -09 Dec -10 Dec -11 Dec -12 Var.12/11

Net Foreign Assets 1.481 1.129 1.698 2.902 3.153 9%

In US$ billions 19,7 12,6 18,3 30,5 32,9

1.315 1.128 1.605 2.485 2.933

In US$ billions 0,0 0,0 17,3 26,1 30,6

Other net external assets of B.C. –1 –2 78 82 79

Net foreign assets of banks 167 2 14 335 141

In US$ billions 2,2 0,0 0,2 3,5 1,5

616 1.419 1.031 755 790 5%

594 1.728 1.782 1.748 1.959

Credit to General Government –263 395 106 –407 –713

Credit to Central Government (net) –265 395 96 –409 –715

Assets 833 979 957 1.231 1.262

Deposits –1.098 –584 -861 –1.640 –1.977

Credit to the Economy 858 1.332 1.676 2.156 2.673

22 –309 –751 –994 –1.169

M3 2.097 2.547 2.728 3.657 3.943 8%

SOURCE: BNA.

The increase of foreign exchange in the economy (mainly due to the price

2.6 billion USD in 2012 to 15.1 billion USD) in the Treasury Single Account (CUT)),

assets.

27.

27 By comparison, the customs value of imports increased by only 5% in 2012 over the previous year (reaching 21.7 billion in this year), lower than the 8% increase in 2011 (source: National Customs Service).

36 |

CEIC / UCAN

Kwanza in 2012 to 713 thousand million Kwanza in December – due to the

foreign currency in the Treasury account (CUT-ME), which was higher than the increase of assets28 (31 billion kwanza).

2012).

To reduce the burden of foreign currency loans since 2010, limited exchange rate exposure29 (mentioned above) and qualitative limits on lending foreign currency30 contributed towards this.

28

29 Notice no. 5/2010 of 10 November.30 Notice no. 4/2011 of 8 June that introduced the ban on short-term (up to 1 year)

lending in foreign currency for all sectors – except States and entities with proven

revenue in foreign currency – and the closure of all accounts in this condition up to 31

December 2012.

EVOLUTION OF INR AND FOREIGN ASSETS OF BANKS

Dec. 2012

Dec. 2011

Dec. 2010

Dec. 2009

Dec. 2008 0

0

17,3

26,1

30,6

2,2

0

0,2

3,5

1,5

Billion USD

Net external assets of banks INR: Internal Net Reserves - BNA

| 37


CREDIT BY SECTORS OF ACTIVITY

Weight (%) Annual Var. (%)

Dec -10 Dec -11 Dec -12 Dec -10 Dec -11 Dec -12Agriculture/Fishery 2,2 1,7 2,6 51 4 85

2,3 2,8 4,1 –45 54 82Manufacturing industries 8,4 8,5 9,7 118 30 42

7,8 8,0 11,7 21 31 83Wholesale and Retail 19,5 16,9 16,8 36 12 23

0,7 0,7 1,3 –4 33 1343,8 3,9 3,1 –4 31 –2

Financial, Insurance and Pension 2,3 4,3 3,4 – 136 –110,5 14,8 10,2 100 81 –15

9,3 16,8 18,8 62 132 3912,9 2,3 0,1 – –77 –9516,8 16,8 14,8 –50 29 9

3,5 2,5 3,4 – –9 67Total 100,0 100,0 100,0 26 29 24

SOURCE: BNA.

Credit MN Credit MECredit ME/Total credit (right hand scale)


400

200

800

1.200

600

1.000

1.40062 64 63

49

1.600

Billi

on K

z

Perc

enta

ge

0

10

20

30

40

70

60

50

CREDIT TO THE ECONOMY

43

SOURCE: BNA.

38 |

CEIC / UCAN

Money supply

MEANS OF PAYMENT

Billion Kz Dec -08 Dec -09 Dec -10 Dec -11 Dec -12 Var.12/11M3 2.097 2.548 2.728 3.657 3.943 7,8%M2 1.417 2.304 2.626 3.506 3.866 10,3%M1 1.235 1.635 1.700 2.151 2.174 1,1%Notes and coins held by the public 126 170 172 209 242

168 214 229 288 336– Cash in Commercial Banks –42 –44 –58 –79 –94Sight deposits – MN 511 609 733 956 1.037Sight deposits – ME 598 857 795 986 896Quasi-money 182 669 926 1.356 1.691 24,8%Time deposits – NC 42 260 409 596 811

12 32 15 27 3Time deposits – FC 128 377 501 732 877

680 244 102 151 77Loans and Repurchase Agreements – MN 568 232 83 112 39Loans and Repurchase Agreements – ME 112 12 20 39 38

4,2 3,0 2,4 3,2 3,6

SOURCE: BNA.

0%

40%

80%

120%

20%

60%

100%


MONEY SUPPLY - ANNUAL RATE OF CHANGE

M2M3 M1

SOURCE: BNA.

104,1%

21,5%

34,0%

7,8%7,1%

| 39


The monetary base expansion, induced by the increase in notes and coins in

31.

31

identify the balance applied herein.

MPME MPMN

Dec 2008 Dec 2009 Dec 2010 Dec 2011 Dec 20120%

10%

30%

50%

20%

40%

60%

41%

59%

50% 50% 49% 51% 49% 51%46%

54%

70%

STRUCTURE OF MEANS OF PAYMENT – M3

0

400

200

1.000

1.400

1.600

600

800

1.200


SELECTED LIABILITIES OF BNAEVOLUTION OF BALANCES AT END OF YEAR

Deposits of Commercial Banks

CUT – MN CUT – ME

Billi

on K

z

SOURCE: BNA.

SOURCE: BNA.

40 |

CEIC / UCAN

32 increased from 3.2 in December 2011, to 3.6 in

the reserve currency in January, in the last quarter of the year.

securities, when it sought to introduce open market operations to manage

33

TRANSACTIONS WITH THE CENTRAL BANK AND MONEY MARKET INTERBANK (MMI) Billion Kz

Month in MMI dediscount Emission TBC

Perm. Open Market

Cession Cession 33 jan -12 536 31 134 0 348 0 101feb -12 622 0 77 0 129 0 84mar -12 305 0 136 0 385 0 50apr -12 478 31 115 0 505 49 28may-12 1.397 0 144 28 200 0 86jun -12 992 0 30 45 291 0 55jul -12 598 0 9 49 150 0 118aug -12 1.029 0 43 29 147 0 23sep -12 1.224 0 1 14 74 0 24oct -12 1.537 0 17 43 110 0 42nov -12 1.656 0 0 206 85 0 28dec -12 1.644 0 49 54 210 0 37Total 2012 12.018 62 757 467 2.635 49 678Total 2011 7.907 6.041 406 28 650 388 734Var. 2012/11

SOURCE: IMF.

32

33

related to the use of different valuation methods.

| 41


34 were acquired.

overnight interest rate in the IMM remained at the same level throughout the year, maintaining market asymmetry (few banks taking funds and various giving).

2.3 Currency Exchange Market and exchange rates

from 1.2 to 1.5 billion USD.

34

Policy.

2008 2009 2010 2011 20120

10.000

15.000

5.000

9.200

369

10.636

57

11.613

0

14.888

0

18.201

0

20.000

0,2%

18,1%

4,4% 2,8%0,6%

0%

8%

14%

2%

20%

6%

12%

18%

4%

10%

16%

42 |

CEIC / UCAN

for foreign currency by banks, to meet the import needs of its customers.

Recurrence of the outlier35

stability of the exchange rate, aimed at maintaining the stability of exchange rates

Similarly to the previous year, the exchange rate reference appreciated, in

35

participants who propose rates considered out of the market, i.e., rates far above or below the benchmark rate.

Sales

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

400200

600800

1.2001.4001.600

2.0001.800

1.000

Exch

ange

Rat

e / U

SD /

Kz

Mill

ion

USD

95,2

95,6

95,495,5

95,3

95,795,895,996,096,196,2

MONTHLY SALES OF FOREIGN CURRENCY BY BNA AND EXCHANGE RATE IN 2012

Ref. exchange rate

70

75

80

85

95

90

100

105

110

EXCHANGE RATE USD / KWANZA (average rate of buying and selling)

USD

/ K

z

Reference Secondary Market Informal Market

Dec 2

007

Mar

200

8Ju

n 20

08Se

p 20

08De

c 200

8M

ar 2

009

Jun

2009

Sep

2009

Dec 2

009

Mar

201

0Ju

n 20

10Se

p 20

10De

c 201

0M

ar 2

011

Jun

2011

Sep

2011

Dec 2

011

Mar

201

2Ju

n 20

12Se

p 20

12De

c 201

2

| 43


foreign currency in the face of ofer36).

2.4 Banking System

having the release of Portal Consumer Financial Products and Services been

Following publication of Law 34/11 on combating money laundering and

of this chapter).

36 According to data provided by the Angolan Banks Association (ABANC), the banking system in 2012 imported banknotes worth 5.2 billion USD (plus 6% over 2011), Angola is considered the country that, worldwide, imports the largest number of USD in notes.

70

75

80

85

95

90

100

105

110

EXCHANGE RATE USD / KWANZA (average rate of buying and selling)

USD

/ K

z

Reference Secondary Market Informal Market

Dec 2

007

Mar

200

8Ju

n 20

08Se

p 20

08De

c 200

8M

ar 2

009

Jun

2009

Sep

2009

Dec 2

009

Mar

201

0Ju

n 20

10Se

p 20

10De

c 201

0M

ar 2

011

Jun

2011

Sep

2011

Dec 2

011

Mar

201

2Ju

n 20

12Se

p 20

12De

c 201

2

44 |

CEIC / UCAN

The BNA also launched a broad consultation process involving banks and external audit firms, by industry association (ABANC), the major regulatory package on corporate governance, internal control, supervision on a consolidated basis and the external audit (which culminated in the recent publication of Notices paragraphs, respectively, 1/13, 2/13 of 19 April and 3/13 and 4/13 April 22).

Structure of Banking Sector

22 of which in activity37. In terms of non-banking financial institutions, there were 65 exchange houses, 2 micro-credit companies and one company providing payment services.

NO. BANK FINANCIAL INSTITUTIONS– BY TYPE OF SHAREHOLDER CONTROL

2008 2009 2010 2011 2012Public 3 3 3 3 3Mixed – – 1 1 1

10 10 12 12 12Branches of foreign banks 6 6 7 7 7Total 19 19 23 23 23

SOURCE: BNA (Report on Financial Stability)

NETWORK

2008 2009 2010 2011 2012No. of bank agencies 602 792 1.002 1.168 n.d.No. of ATM 717 995 1.290 1.628 2.014No. of POS 2.660 7.587 12.140 18.199 23.545

SOURCE: ABANC e EMIS. n.d – Not available

Soundness Indicators of the Banking System38

37

begin its activity and was formally terminated in 2013.38

to correspond to the date of the last data made available by BNA when this Report was

they are not annualized, and therefore not comparable.

| 45


December 2012.

loans).

141 billion kwanza in December 2011 to 197 billion kwanza in December 2012

by provisions.

0

20

40

60

80

100


LIQUIDITY INDICATORS (%)

SOURCE: BNA.

Net Assets / Total Assets

Total Credit / Total Deposits

46 |

CEIC / UCAN

Due to lower growth in coverage of overdue loans by provisions, the exposure

on regulated capital39

2012.

Exposure to foreign exchange risk on regulatory capital, which had been

39 In simple terms, this ratio measures the credit risk not covered by equity capital.

0

5

10

15

20

25


ASSET QUALITY (%)

INDICATORS OF EXPOSURE TO EXCHANGE RATE RISK (%)

Dec - 08 Dec - 120

40

60

20

80

100

FC Credit / Total Credit Open Net Currency Exposure / Equity

Dec - 09 Dec - 10 Dec - 11

65,7 65,3

42,750,9

64,9

SOURCE: BNA.

| 47


Although the value of loans granted in foreign currency are to be gradually

oil sector (RCSP), from July 1, 2013, in which payments to foreign residents must

1.

2. accept the kwanza, possibly facing both the risk of foreign currency 40 of increased foreign

exchange).

the use of foreign currency on the loans.

period.

40 Short position means that the total of liabilities is greater than the total of assets denominated in foreign currency.

48 |

CEIC / UCAN

INDICATORS OF STRENGTH OF BANKING SYSTEMPercentages at end of period

Dec -08 Dec -09 Dec -10 Dec -11 Dec -12Capital Adequacy

12,9 19,5 18,6 18,5 18,3Core Capital (Level 1) / APR 14,9 14,7 17,9 14,3 13,6Asset Quality FC Credit / Credit Total 65,7 65,3 64,9 50,9 42,7Overdue Credit / Total Credit 2,5 2,6 8,6 2,4 6,8

/Equity 3,3 11,6 24,0 2,8 11,6Rentability Assets Rentability (ROA) 2,5 3,4 3,0 2,6 1,6Capital Rentability (ROE) 35,5 36,5 32,1 21,6 12,5

40,6 45,5 40,8 40,3 41,2Financial Margin / Gross Margin 36,1 26,7 68,2 66,9 59,8Liquidity Net Assets / Total Assets 18,4 31,4 32,0 28,1 26,3

38,8 56,9 38,6 35,4 33,7Total Credit / Total Deposits 52,8 55,8 60,6 59,5 65,5

– 54,9 – 53,6 50,7

Open Net Currency Exposure Equity 85,8 88,8 4,5 21,1 7,0

FC: Foreign Currency

NOTE: a) The data available for this period are not comparable with previous periods since they are not annualized.

THE NEW EXCHANGE RATE REGIME FOR THE PETROLEUM SECTOR – CONTRIBUTIONS TO THE EVALUATION OF ITS IMPACTS

The new Foreign Exchange Regime for the oil sector (RCSP) was approved by Law 2/2012 of 13 January, taking into account the following

the oil sector, and the need to provide for their uniformity in order to

equate the interests of the State, foreign investors, investors in the

| 49


In general, the regime provides the mandatory permanence in Angola of some components of the revenue of the oil industry41, as well as

revenues from oil sales in accounts domiciled abroad, making payments from these and not being forced to sell the currency to make payments

exchange employees42.

The RCSP was implemented on May 12, 2012, establishing the following schedule for the gradual implementation of the payments to be made

Date

and corporate investors, Operators

1 October 2012

Payments for provision of goods and services necessa-rily through accounts in NC and FC.

Payments to foreign exchange

goods and services.

13 May 2013 Payment of taxes (in FC). –

1 July 2013Payments to foreign exchange

goods and services.

Payments to foreign exchange

exclusively in FC.

1 October 2013

– Payments for supplies of goods and services to non-resident foreign exchange entities.

NOTE: NC – National Currency; FC – Foreign Currency.

41 In order to simplify, we have included in this edition the National Concessionary, and national and foreign corporate investors and operators.42

residents, meaning that employees of the oil companies could also keep their savings abroad (or at least part).

50 |

CEIC / UCAN

One of the main objectives of RSCP is aimed at reducing the

Monetary Policy tools and continue this exercise of protection of

On the other hand, the presence of the oil industry in the system

in a context of broader regulatory changes, which include the new operational framework for monetary policy, the exchange exposure

regulatory package in view of the strengthening the capacity of supervisão43. The BNA seeks to dispel, with these new standards of the

pressures.

Concept of Resident and Non-Resident Foreign Exchange

resident foreign exchange leaves room for doubt when it includes 44, since it can be interpreted

Tributary Code45.

On the other hand, the Companies Act establishes the requirement of

46.

43 Notice 1/13 on governance, Notice 2/13 on internal control, Notice 3/13 on consolidated supervision and Notice 4/13 on external audit.44 Subparagraph c); of paragraph 1; of Notice 4; of Law 5/97.45 Article 2 of Law 5/97.46

by the referred in the Company Law.

| 51


Impact on Banking Sector

There will certainly be a significant increase in the volume and magnitude of transactions related to the oil sector, which will boost the development of the banking sector and, generally speaking, boost Financial development. Based on data from the Balance of Payments

flow of payments of 33 billion USD, divided into payments to foreign goods (4000 million USD) and services (16 billion USD) and taxes (13 billion

from July 1.

Therefore, companies in the sector, including services providers, have noted that, given the nature of the sector, the volume of expected

for financial institutions domiciled in Angola to ensure high efficiency 47.

Impact on monetary aggregates

aggregates, both in terms of deposits, credit and structure of means of

be made directly from foreign accounts48. For this reason, to develop the

As for changing the structure of the means of payment induced by the new regime, it is expected that, at least in medium term, foreign

into account that the offshore oil sector is technologically advanced

47

of taxes implies a penalty of 50% of the tax payable.48 Being excluded, in the case of the concessionary and the national investors, the security accounts (escrow accounts) and, in the case of foreign investing

and other remuneration of capital and the amount of the depreciation of the investment.

52 |

CEIC / UCAN

and demanding, making it an enclave in countries where there are no

The high cash requirements of the industry and speed of payment implementation may also determine that both operators and banks

volumes traded.

Impact on the Foreign Exchange Market and Exchange Rate Policy

With the requirement of making payments exclusively in Kwanza to resident entities, there will be greater availability of foreign currency for the banking sector which is expected to reduce dependency on BNA

paid by the oil sector – which remains mandatory to be paid in foreign currency.

required for payment of taxes and other tax obligations to the State, to BNA, thus strengthening the role of the BNA in the management of

| 53


3. OVERALL LEVEL OF THE ECONOMIC ACTIVITY

year (average rate occurred between 2004 and 2008), serving as a teste49 to 2012. Some doubts arose about whether this could indeed occur50.

Although growth accounting is still not closed for 2012, the Government 51

52. In any case, the fears expressed in 2011 seem to

49 Periods of growth of the Angolan economy are: a long phase 1998/2012, with an average annual rate of 9.1%, the gold phase 2004/2008, with a rate of 17.4%, the crisis phase 2009/2012, with a rate of 4.3%.50 UCAN/CEIC . Economic Report 2011, pages 74 and 75.51 Republic of Angola – Report Rationale of the State Budget for 2013, Luanda, December 2012.52 International Monetary Fund – Angola Staff Report for the 2012 Article IV Consultation

TRENDS OF LONG-TERM GROWTH

1998 1999 2000 1 3 5 7 9 11 120,0

10,0

15,0

5,0

20,0

25,0

Growth rate of GDP Trend line

2 4 6 8 2010

SOURCE: CEIC, GDP Index File.

54 |

CEIC / UCAN

for double the GDP in 10.5 years53.

and well below the medium-term trend from 2002 to 2008, with an average

institutional environments conducive to private investment (which means unpolluted corruption – which continues to grow under more sophisticated

quality and with high levels of economic and social return54 and improving income

53 It may not be so in the view of the Solow “steady state”, with the need of growth to cover

value of the average income per capita remains constant.54

the general designation Removing Infrastructure Bottlenecks, identifying these obstacles: “Limited access to roads, power, water, weigh heavily on the cost of doing business in Angola. Efforts underway to modernize the operation in the Port of Luanda, repair and extend the road and railway network, and increase investment in power generation and water distribution, will strengthen the basis for sustainable medium-term growth.

appraisal and implementation capacity.”

GDP GDPNP

DIFFERENT DYNAMICS AND STAGES OF GROWTH IN ANGOLA (%)

2009/2012

9,110,9

4,2

7,2

15,0 14,4

17,4 16,9

4,3

8,7

1998/2012 1998/2001 2002/2008 2004/2008


| 55


The period of 2009/2012 is similar to the1998/2001 period in average annual

average price of a barrel of oil stood at $ 18.8, while in the period 2009/2012 it was $ 85.4. The lower average annual rates in the GDP during the last considered period

influenced by the known spillover effect, i.e., economic growth and the oil

capacity of the Angolan economy and the crisis in Europe and the U.S. decreased intensity of growth in China.

EVOLUTION OF THE AVERAGE PRICE OF BARREL OF OIL

2009/20120,0

30,0

50,0

10,020,0

70,0

90,0

40,0

60,0

80,0

1998/2012 1998/2001 2002/2008 2004/2008

SOURCE: CEIC, File Oil in the World.

Dolla

rs p

er b

arre

l

LONG-TERM TRENDS OF ANGOLAN ECONOMICS

1998 99 2000 1 3 5 7 9 1211-10,0

15,0

-5,0

20,0

25,0

30,0

10,0

5,0

0

2 4 6 8 2010

GDP growth rate Oil GDP growth rateNon-oil GDP growth rate


56 |

CEIC / UCAN

very appealing credit arrangements for borrowers also resulted in relevant consequences.

Public investments have been one of the driving springs of non-oil economic

2002 2005 2007 2009 2011 2012

6,2

Public investments / GDP (%)

2004 2006 2008 20102003

7,5

4,9 5,5

13,011,5

14,112,4

9,78,7 9,0

SOURCE: CEIC, File Macroeconomic framework based on reports from the Government and the IMF.

RELATIONSHIP BETWEEN PUBLIC INVESTMENTAND CONSTRUCTION AND PUBLIC WORKS

2003 2005 2007 2009 2011 20120,0

10,0

20,0

5,0

30,0

40,0

15,0

25,0

35,0

2004 2006 2008 2010

SOURCE: CEIC, File Macroeconomic framework based on reports from the Government and the IMF.

| 57


exports is 0.98.

The so-called market services (trade, transport, banking and insurance,

structure and its dynamics of growth has on average annotated records of around

growth registered in 2012, was nearly 2.5 percentage points.

Since 2002, the transforming industry has had many ups and downs. The arms

In 2012, the energy and water sector remained one of the main obstacles in

the constant and permanent resource to generators very expensive, reducing

1998 1999 2000 1 3 5 7 9 11 120

150,0

250,0

50,0

300,0

200,0

100,0

350,0

Energy index GDP index

2 4 6 8 2010

COMPARISON OF GDP GROWTH AND ENERGY

Valu

es in

%

SOURCE: CEIC/UCAN, Studies on Angolan economy.

58 |

CEIC / UCAN

Despite the weight that energy has towards sustainable economic growth

rate 55.

In fact, a set of 17 sub-Saharan economies, Angola has, in the period 2004-2010, a greater appreciation of the REER, placing itself as one of the less

more complete if we add the high costs associated with limited infrastructure and

Doing Business Index 2012 worsened

the following table.

55

Monetary Fund – Angola Staff Report for the 2012 Article IV Consultation and Post

REER VARIATION BETWEEN 2004 AND 2010 (%)

-20,0-10,0

010,020,030,040,050,060,070,080,0

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

íbia

Cong

o

TCha

dRw

anda

Moz

ambi

que

ASS

SOURCE: CEIC, File The Structural Transformations in Africa, based on World Bank – World’s Development Indicators 2011 e 2012.

| 59


BUSINESS ENVIRONMENT IN ANGOLA

Atributes No. procedures Days Cost (% RNB

Per capita)

Start a business 8 68 118,9 167

11 321 180,3 115

Access to electricity 8 48 890,5 120

7 184 129

Access to credit – – – 126

– – – 65

Payment of taxes 31 282 hours/year 149

Freedom to trade – – – 163

Contract 46 1011 181

– 6,2 years – 160

SOURCE: World Bank – Doing Business 2012.

After the more difficult periods of 2009, 2010 and 2011 – during which national economic activity growth was affected by adverse external factors

MACROECONOMIC ACCOUNTING AGGREGATES

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

GDP (MMusd) 14,2 19,7 28,2 41,8 60,5 84,2 75,5 82,4 104,3 112,7

GDPp (MMusd) 7,1 10,2 14,8 23,3 33,0 47,6 38,3 37,3 49,6 49,4

GDPnp (MMusd) 7,1 9,5 13,4 18,5 27,5 36,5 37,2 45,2 54,7 63,3

GDP growth rate (%) 5,2 10,9 18,3 20,7 22,6 13,8 2,4 3,4 3,9 6,8

Oil GDP growth 1,6 13,1 26,0 13,1 20,4 12,3 -5,1 -3,0 -5,4 8,5

Non-oil GDPn (%) 8,3 9,2 12,1 27,6 24,4 15,0 8,1 7,6 9,5 6,0

GDPo/GDP (%) 50,0 51,6 52,5 55,8 54,6 56,6 50,7 45,2 47,6 43,8

Contrib.to non-oil GDP (%) 4,56 4,43 5,17 12,02 10,15 6,89 4,30 4,32 4,84 5,13

International Monetary Fund – Angola Staff Report for the 2012 Article IV Consultation and Post CEIC calculations on the contribution for the growth of the non-oil sector.

The Government program implemented between 2009 and 2012 – the institutional response to the effects of the international crisis – was aimed at

government program were implemented with the support of the International Monetary Fund, based on a stand-by agreement (whereby the Angolan Government

60 |

CEIC / UCAN

PERFORMANCE OF ANGOLAN ECONOMY: REAL GROWTH RATE IN %

2007 2008 2009 2010 2011 2012 (Est.)

Agriculture 27,4 1,9 29,0 6,0 9,2 13,9

9,7 –2,4 –8,7 1,3 17,2 0,0

Diamonds and other 2,7 –8,2 4,6 –10,3 –0,7 9,0

Oil 23,3 12,3 –5,1 –2,9 –5,6 4,3

Manufacturing industry 32,6 11,0 5,3 10,7 13,0 6,0

37,1 25,6 23,8 16,1 12,0 7,5

Energy 8,6 26,1 21,3 10,9 3,5 11,7

Market services 21,8 26,9 –1,5 8,7 9,5 10,0

Other 4,5 1,9 5,9 4,7 9,6 4,3

GDP at market prices 23,2 13,8 2,4 3,4 3,9 7,4

Non-oil GDP 21,5 15,0 8,3 7,8 9,7 9,1

GDP (billion dollars) 60,5 84,2 75,5 82,4 104,3 112,7

GDP per capita (dollars) 3418,7 4708,5 4103,7 4461,2 5358,6 5732,4

SOURCE: State Budget 2013 – Rationale Report, Ministry of Finance.

regression value of the average per capita income this year, compared to 2008. At the end of 2012 the average per capita income may have exceeded $ 5,700.

maintenance and mechanical issues.

EVOLUTION OF GDP PER CAPITA IN DOLLARS

20120

3000,0

5000,0

7000,0

2000,0

1000,0

4000,0

6000,0

2002 2004 2006 200820052003 20102007 2009 2011

Valu

es in

Dol

lars

| 61


graph, which depicts the GDP growth rate during the period of 1998 and 2012

2003 to 2008.

market services.

These smaller growth dynamics surely affected the trend line of Angolan

2002/2012), even so, very expressive56.

56 Between 2002 and 2008 the value was 14,8%.

GDP INDEX

20120

100,0

200,0

300,0

50,0

150,0

250,0

1998 2002 2006 200820042000 2010

Valu

es in

%

TREND LINE OF GDP GROWTH 2002-2012

0

4,0

8,0

12,0

16,0

2,0

6,0

10,0

14,0

2002

-201

2

2002

-201

1

2002

-201

0

2002

-200

9

2002

-200

7

2002

-200

6

2002

-200

5

2002

-200

4

2002

-200

3

2002

-200

8

62 |

CEIC / UCAN

população57.

The public works sector remains one of the growth engines of the non-oil sector

57

OSCILLATIONS OF THE AGRICULTURAL SECTOR GROWTH (%)

1998 1999 2000 1 3 5 7 9 11 120,0

10,0

15,0

5,0

20,0

30,0

25,0

35,0

Annual rate Trend line

2 4 6 8 2010

LOSS OF DYNAMICS OF THE CONSTRUCTION SECTOR (%)

1998 1999 2000 1 3 5 7 9 11 120

10,0

15,0

5,0

20,0

30,0

25,0

40,0

35,0

Annual rate Trend line

2 4 6 8 2010

| 63


Between 2000 and 2012, the manufacturing sector grew at an average annual

the Petroleum Sector.

1998 1999 2000 1 3 5 7 9 11 120

150,0

250,0

50,0

350,0

450,0

200,0

300,0

100,0

400,0

500,0

Manufacturing index GDP index

2 4 6 8 2010

EVOLUTION OF THE MANUFACTURING SECTOR AND OF GDP

1998 1999 2000 1 3 5 7 9 11 120

150,0

250,0

50,0

350,0

200,0

300,0

100,0

400,0

Services index GDP index

2 4 6 8 2010

EVOLUTION OF THE SERVICES SECTOR AND OF GDP

64 |

CEIC / UCAN

There is a take-off of market services in general economic activity after

3.3.1 Agriculture, livestock and forestry

Again CEIC draws attention to the serious and continuing problem of the

on the Angolan agriculture. As has happened in previous years, the CEIC does

of Agriculture, 2013), seeking, where possible, to complement them with other sources. It is recommended, that those interested, consult the Economic Reports of previous years, 2006 to 2011, where this issue is discussed in more depth, addressing current key elements.

In 2012, with the establishment of the first Executive after elections, the

But a more refined analysis shows that it is a measure that brings rural

of the folder was deputy minister of Rural Development when the Ministry was appointed by the Ministry of Agriculture and Rural Development (MINADER).

3.3.1.1

Agriculture

In the 2011-2012 agricultural year, about 5.6 million hectares were grown,

58. Considering these real numbers, the cultivated area is currently only less

58 Not included are cultivated pastures or exotic forests.

| 65


The lack of statistics remains a major problem in Angolan agriculture.

59.

According to MINAGRI, in 2012, about 2.6 million farming families60 existed in Angola (1.9 million in 2010 and 2.1 million in 2011), of which 1.5

(MINAGRI, 2013)61. Such assistance came in the form of transfer of technologies,

each farmer was 2.1 hectares (2.4 in 2011). Equally, it is not known what explains

information. In the agricultural year of 2011/12 there were 8,360 corporate

because it gives an unrealistic production potential represented by these companies. It is more likely that the number of farms with any valid technical and

59

the persistence of the outdated divide between family farming and business. As the CEIC

it treats family farming so biased, considering it as “subsistence”, when in reality it is responsible for the overwhelming amount of farming products of national origin that reaches the market. A study in Malanje by a team of Portuguese technicians, not yet

of them channelled more than 30% of their production to the market. If the market for agricultural products was better structured, this percentage would be much higher. 60

by extrapolation of a non-existing rural population. In fact, since the rural population represents, in a maximalist hypothesis, about 40% of the total Angolan population

rural areas to urban centres is still being registered, which must have implications in the number of farmers. 61

Provincial Governments Programs and the Municipal Integrated Rural Development and Poverty Alleviation (PMIDRCP), or still do not qualify for any kind of assistance.

66 |

CEIC / UCAN

The agricultural year of 2011-2012 was quite adverse from production

translated by prolonged dry periods, varying from one region to another. Of

harvested, which, therefore, gives an idea of the damage caused62. The largest recorded harvests were vegetable, oilseeds and cereals, and fruit plants were the

The obtained results can be seen in the following table, which also gives an

EVOLUTION OF AGRICULTURAL PRODUCTION IN GROUPS OF CULTURES

ProductsProdução Variação (%)

2009/2010 2010/11 20011/12 2009/10 2010/11 2011/2012

Cereal 1.177.948 1.408.826 505.706 11,9 19,6 –64,1

Pulses / oilseeds 371.368 472.380 171.533 2 27,2 –63,7

Roots and tubers 15.686.523 12.219.865 11.935.414 7,2 3,4 –2,3

Vegetables 4.729.267 5.188.006 4.945.898 2,5 9,7 –4,7

Fruits 2.757.521 3.388.993 3.612.827 3,3 22,9 6,6

8.400 10.758 9.833* 11,6 28,1 –13

-

sed by 13%. According to the newspaper Expansion No. 216 of 10 May 2013, coffee production in 2012 was 11,950 tons.

The low productivity of Angolan agriculture has been one of the issues

However, the analysis by the CEIC 2011 Economic Report remains relevant

62 Given the fragility of extension services, the data presented should be viewed with great reservation, as the methodology used in its collection was not disclosed.

| 67


fragility of technical assistance, the lack of skilled workers, poor soils (in terms

almost lacking defense system of plants against pests and diseases.

to accept the data shown, presented by the FAO on the CountrySTAT site, as valid,

It is also strange that the MINAGRI does not refer to pests and diseases during

going through what is proving to be a very serious problem, known as sooty mold.

the nearly two million acres of planted corn could ensure the targeted 3.5 million

The indicators of the livestock sector are equally unreliable and often contradictory, both with regard to staff, as with production and vaccination campaigns. This has been referred to in the Economic Reports from previous years. The 2012 Report of the Ministry of Agriculture refers that 2012 indicators

68 |

CEIC / UCAN

EVOLUTION OF LIVESTOCK

Livestock speciesNo. of heads

2009/10 2010/11 2011/12

4.487.838 4.586.570 4.586.570

Goats and sheep 4.827.996 4.958.351 4.958.351

Pigs 1.934.764 2.135.979 2.135.979

Chickens 17.118.618 19.977.427 19.977.427

Animal production also considers the existence of a traditional or family sub-sector, differentiated from the business sector. The former also has a

predominantly dedicates itself to creating extensive and semi-intensive and

495,000 heads (2011 data).

As has been noted in previous years, the development of livestock in general has been hindered primarily by the weakness in the amount of production

diseases reported, the most serious cases are dermatophilosis and a contagious

(cattle and dogs) in the last three years and also shows the unreliability of

COMPARISON OF VACCINATED ANIMALS(between 2010 and 2012)

Yea Dogs (against rabies)

20101.148.004

283.425(1.338.866)*

20111.196.907 180.433

(3.764.727)* (666.330)*

*Data from the 2011 Report.

| 69


Milk production has shown some misconceptions regarding the policy

the Ministry of Economy decided to patronize production revival, seeking

venture with some expression is part of the New Village Project (). Production has been increasing, although modestly, since 2011, from

Huambo and, above all, South Kwanza, where the New Village Project is being recovered.

with serious health problems hindering household production (especially Newcastle disease) and rations, affecting business production. Traditional

Kwanza with the New Village Project), mainly devoted to the production of

as shown in the 2011Economic Report, now join new projects in North Lunda (Cacanda), Moxico (Sacassanje) and Zaire (Nzeto), on projects with Israeli

clearly shows the failure of projects which have not been properly integrated in

The project for small poultry producers in North Kwanza and Malanje is

reasons, before all the links in the chain were considered (feeding supply, broiler

of the Huila Laboratory which can produce the vaccine against Newcastle disease,

70 |

CEIC / UCAN

Forests

such the data presented in the table below refers to the two years previous years.

FORESTRY PRODUCTION

2009/2010 2010/2011 2010/2011

Toro wood (m3) 90.476 77.181 –14,7

Charcoal 33.000 15.829 –52,0

Fire wood (esters) 20.400 5.174 –74,6

Product. of plants (Un.) 250.000 s/d –

Exports of wood 11.703 s/d –

represents a loss of opportunity to diversify the economy. The slaughter and processing of wood in producing provinces could be viewed as measures of great

Difficulties of transporting wood from Cabinda to Luanda by sea, remain unresolved, making many entrepreneurs, especially informal ones, turn to Uige

3.3.1.2 Agrarian policies

and contradictory. Such policies arose from the MPLA government program for

such as the virtual abandonment of family farming, unaligned with the program established by the Government.

In this light, one can hardly talk about a comprehensive and coherent policy for the development of the agricultural sector in Angola, and the poor results achieved in the period are proof enough. Cereal production, for example, whose forecast was 15 million tons per year, was limited, in the best year

reflected in the continued deterioration of roads known as secondary and

concern of abandonment of these areas by young men who, confronted with the

| 71


areas63. Thus, mortgaging the future of Angolan agriculture.

Below, we analyze how some policy measures were equated throughout the year.

into agricultural entrepreneurs

64

in projects with technical and financial assistance from various international agencies, but is starting to take off. On the other hand, campaign credit to

Apart from being very localized, few results can be expected in the short term

affect the performance of the technicians, who are related to remuneration

in theory.

63

provinces shows that, as a rule, more than 50% of the population is concentrated in the respective county heads. A commune in South Kwanza currently has 20% of the population it had in 1975, but this fact cannot be immediately attributed to war only because another municipality in the same province lost a third of the population after the war. 64

in family farms of about 100 hectares in the provinces of Huambo, Bié and Huila.

72 |

CEIC / UCAN

65.

The promotion of associations and cooperatives should be a strategy to solve the fundamental problems of farmers through the provision of credit and technical assistance. However, no consistent steps have been taken in that

) associated with the idea of promoting entrepreneurism, could be another

Únicos dodo not trust or believe in the process. One of the reasons for this may be linked

programs, without even considering that these processes are in the middle of

by pilot trails performed in very localized regions.

the low budget allocated for extension programs and agricultural research by the State Budget. Sometimes giving the idea that family farmers – who are

methodological rigor and management skills that such bodies are not accustomed to. This is what happens with projects funded by the African Development, World Bank and IFAD, among others.

65

with animal traction, which is clearly unacceptable if we consider that in 2011 this area was only 50 000 hectares approximately.

| 73


2 – Agro-business and development poles

The Angolan government has made a strong commitment to agri-business, not

experiences of public enterprises that cannot exactly be considered a success

(LR Group, Israel), the , the , also from China, , from Spain, and the of South Korea. In

having even started, due to power problems. Generally, a large percentage of

technical assistance, which are both very expensive.

bet is inadequate for Angolan reality.

Besides high costs, such projects are not supported by the necessary research needed for the level of investment required and management is complex. As

skilled workers. The example of in Cacuso-Malanje is

workers, it was not even able to recruit a director from Angola. Moreover, these

In all cases, the objective is to develop a company and production with a strong participation of a foreign partner in a perspective of public-private partnership, and there are ongoing feasibility studies in preparation and to

and project management stop needing the support of the State and of such assistance, with three possible scenarios: sale of assets in favor of private

assurance and maintenance of management by current technology partners.

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CEIC / UCAN

Rural trade has been one of the major constraints of the country’s agricultural

structured trade.

of the economy, but also in fighting poverty. After the failure that was the

experiences – another programme was designed in 2011-12 which should be linked to entrepreneurship (Integrated Plan for the Development of Trade and Rural Entrepreneurship), which almost did not come to light). Now, once again, new strategies and programs are being put forth, but they do not make an assessment of previous mistakes and continue to insist on looking for

have been linked to the process.

4 – Agricultural credit

Regarding the so-called Credit Campaign, which covers mostly farmers

about 67 million dollars had been approved, the would contemplate over 35,000

certain restraint, due to problems encountered and which were referenced in

contemplated, mostly in the provinces of Uige, Huambo, South Kwanza and

goes to show that the problem is deeper than it looks when the lack of credit

| 75


of both. This was BDA’s last strategy, to make use of private companies to implement projects in several provinces, including, South Kwanza, Bengo, South

account for the numbers to have meaning. Total credit to the agricultural sector

economy. Observing the funds allocated to the sector in recent years it appears that, either in percentage relative to the total budget, or in absolute terms,

Furthermore, it is known that the percentage devoted to direct production through agro-business is much higher than that assigned to the family farming and structuring projects and, for example, programs such as research, technical assistance and training.

GENERAL STATE BUDGET, AGRICULTURE SECTOR (2008 -2012)

2008 2009 2010 2011 2012USD 1.475.337.834 1.747.050.821 681.507.810 674.377.279 533.000.000*

% Total GSB 4,45 4,13 1,97 1,41 1,2

*Rounded value.

in South Kwanza (which becomes less understandable when one knows that

industrial slaughterhouse in Camabatela, with a capacity to slaughter 200 animals

76 |

CEIC / UCAN

they have encountered in livestock development in the country in general, and

The state budget does not translate the policies expressed but instead other

6 – Future policies

For the period of 2013-2017, the defined policies were embodied in the

of qualification of the economically active population, high rate of illiteracy in rural areas, shortage of academically and professionally qualified trained

commerce, high costs of context, particularly in the functioning of public

investment in Angola. Not surprisingly, in recent years private investments in

should have been virtually nonexistent.

In any event, the 2013-2017 Plan provides as a major goal for Agriculture

1.

| 77


2. Rehabilitate and expand infrastructure to support agricultural and livestock

3.

4.

5. Relaunch cash crops with an outlook towards profit and establishing tradition in the territory, in order to promote the increase of farmers’

6.

7. Promote the practice of irrigation to increase the productivity and

8. Strengthen the system of agricultural research as a technical, technological

9. of family farms and to re-launch the business sector.

Main programs stand out for the Promotion of Productive Activity, Development of Family Farming, Food Security and Nutrition, Research and Development, Development of Commercial Agriculture, Veterinary Public Health Program, Development of Meat and Milk, Support and Development of Animal

of Wood and Non-wooden Products, Sustainable Management of Natural Resources.

targets and programs. It appears that many of the inconsistencies stem from a lack of work experience, proper planning and use of scientific methods in together with the practical experience. The CEIC seeks to monitor the Plan

78 |

CEIC / UCAN

3.3.2 Manufacturing industry

processing of natural resources, is incremented over time. Economic growth is closely associated with generating domestic value capacity, in terms of job creation, maximizing efficiency and increasing exports. This is how more developed economies have ensured self-sustainability and reduced dependence.

of living. The increased value added by internal transformation of natural resources would reduce the degree of external dependence, which European

After, apparently, the most delicate of the international financial and economic crisis of 2008/2009 had passed and, despite a surprisingly good resilience in many African economies to the effects66, the African continent, especially the sub-Saharan region, remains vulnerable to shocks in terms of trade of their economies, due to the excessive weight of products with added low value. For many years, African leaders were convinced that the best way to

67.

However, during the 1970s, with successive oil shocks and the swell of debt,

Monetary Fund and the World Bank had, as one of the desirable outcomes of

countries.

66 Revealed by several indicators: FDI spent 38.4 billion dollars in 2008 to 37.1 billion dollars (slight reduction), which contributed to a lower decrease in the growth rate of GDP in comparison to what has happened in other countries, and the variation of GDP was 4.3% between 2000 and 2009, with a recovery in 2010 (5%) and 2011 (4,5%) (World Bank, Global Economic Prospects, January 2013). 67 It is almost an endless discussion on the models of industrialization and economic

powerful factor of economic growth and many studies conclude that protection – tariff

to emerging industry” has its supporters, but within the conditions and validation tests

| 79


In recent years, African countries expressed through suitable policies and

emphatically, towards the organization capable of withstanding impact from external shocks and decrease external dependence. Cumulatively, these two

poverty and improvement of growth with sustainability.

Several initiatives to promote the industrial development of the African The

68.

Recent research suggests that the process of economic growth is very taxing of

productivity. Productivity is indeed, the nuclear issue of industrialization,

as a common denominator a structured industry of high added value.

construction and transformation. In a more restricted approach – adopted

68

80 |

CEIC / UCAN

or imported, is considered industrial activity. The Department of Economic

69.

The manufacturing sector plays a crucial role in structural and economic development, due to the following facts:

the processing industry.

increasing investment and increasing output. This ability to create jobs is directly related to increasing return, to scale, unlike what happens in agriculture, where diminished marginal return diminishes its capacity to generate employment. Consequently, with population growth and

According to Engel’s Law, as per capita income increases, the share of expenditure on agricultural goods in household budgets decreases, while

.

Despite what was stated earlier about the importance of manufacturing, and

69

| 81


3.3.2.1

The relationship between industry and development in the processes of structural economic changes is demonstrated and widely commented on in the economic literature, with no developed country without a strong and

institutional transformation of attitudes and individual behavior and social

- --à-

70.

Less referred, although equally studied, has been the interdependence between industry and agriculture within a logic of releasing workforce and

-71

of structural changes, which contributed to the failure of those processes.

to make them more endogenous and less dependent on external assistance.

The period of 1965/1980 was one of the best in sub-Saharan Africa, with

70

71 Norro, Michel – Economies Africaines: Analyse Economique de l’Afrique Subsaharienne, 2éme édition, Ouvertures Economiques, 1998.

82 |

CEIC / UCAN

and 1988, a period during which sub-Saharan Africa manufacturing grew by only

72.

development is the correlation between the coefficient of industrialization (manufacturing GVA / GDP) and gains in standard of living, measured by the

throughout the world is replete with studies focusing on these indicators. Naturally, the Economic Report also contemplated this for the Angolan manufacturing industry.

Apart from a few episodes, explicable in the light of internal and external

economic literature.

There is no longer intensive change towards a more powerful and structured

72

Saharan Africa, CEIC / UCAN / Mayamba 2013.

CORRELATION BETWEEN GDP PER CAPITA AND WEIGHTOF MANUFACTURING IN GDP (logarithmic basis)

2001 2002 2003 2004 2006 2008 2011 2012

2,81

3,753,733,643,613,673,543,39 3,243,092,962,92

0,600,840,790,810,790,690,720,680,610,680,590,57

Weight of manufacture (%) GDP per capita (USD)

2005 2007 2009 2010

SOURCE: CEIC, Files

| 83


structures, it is in fact noted that the rate of change should be higher, to take advantage of the synergies between previously noted industrialization and

Weight of manufacture (%)

2001

2007

2010 2004

2002

20032011

20052009

2012

20062008

50,0

40,0

COMPARISON BETWEEN INDUSTRIALIZATION AND OIL TAX REVENUE(DUTCH DISEASE)

Oil revenue (% GDP) Weight of agriculture (% GDP)

30,0

20,0

10,0

0

SOURCE: CEIC, Files

20022001 2003 2004 2005 2006 2007 2008 2009 2010 20110

1,500

3,000

3,500

EVOLUTION OF THE NATIONAL ECONOMY DIVERSIFICATION INDEXES

1,000

2,500

0,500

2,000

Diversification indexIndustrial structural transformation indexEconomic transformation index Concentration index

2012

SOURCE: CEIC, Files

84 |

CEIC / UCAN

The effects of peace (2002) and the international financial and economic crisis (2008/2009) patents in the process of Angolan structural economic change,

However, the manufacturing industry remains heavily concentrated on low density industries and amongst them the production of food and beverage

value produced in the country.

The graph above shows that the process of re-industrialization is clearly affirming low density industries, returning to the colonial model before the independence73. Heavy industry does not exist, so the implementation of new refinery Lobito is important and basic to the country’s industrialization

may cause. Such an activity entails determining upstream and downstream endogenous effects on industrialization. One should, likewise, enhance the effects on the agricultural industrialization that may be triggered by the

73 “What has happened, essentially, after 2001, as attested by various information sources,, is the repetition of industrialization in colonial times, where industries producers of capital

(often used and poorly recycled equipment)”, Economic Report 2011, CEIC / UCAN.

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

2000,0

1000,0

3000,0

4000,0

7000,0

5000,0

6000,0

Light industry Intermediate industry Heavy industry

SOURCE: CEIC, Files

INDUSTRIAL VAB EVOLUTION IN LARGE GROUPS OF INDUSTRIES(MILLION DOLLARS)

2011 2012

| 85


manufacturing last year.

processes of manufacturing.

and at the loss of dynamism in agriculture.

Significant increase in the relative share of the production of drinks, making Angola one of the major consumers of alcoholic and non-alcoholic beverages in sub-Saharan Africa. Amounts recorded between 2001 and

STRUCTURE OF MANUFACTURING INDUSTRY IN 2001

65%

3%32%

Food BeverageOther

SOURCE: CEIC, Files

STRUCTURE OF MANUFACTURING INDUSTRY IN 2012

FoodBeverageOther

24%

57%

19%

SOURCE: CEIC, Files

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CEIC / UCAN

should be emphasized – production driven by the boom in construction and public investments in infrastructure – chemicals and metal products. The nature of the re-industrialization process centered on low density industry is confirmed: other processing activities increased from

sign, even though still a tenuous one, a process that puts food and drink at levels closer to that of a diversified industrial structure. As noted, the most important productions of this group are nonmetallic

Disparities in growth between the two most important sectors of the manufacturing industry are also revealed by comparing the nominal gross value added of food and beverages.

Between 2001 and 2012, the average annual growth rate of drinks in the GVA,

0.48 and 2.42 in 2012. Import of non-durable consumer goods end up being the

The drinks industry is the most profitable in Angola’s current industrial structure (population growth, cultural habits, improving personal average

EVOLUTION OF FOOD AND BEVERAGE VAB (MILLION CURRENT DOLLARS)

2001 2 3 4 6 8 2010 120

3000,03500,0

2000,0

4000,04500,0

2500,0

1500,01000,0

500,0

Food Beverage

5 7 9 11

SOURCE: CEIC, Studies on the manufacturing industry.

| 87


It is found that after 2003 beverage production started its intense and

2005-2007 steepened considerably between 2008 and 2011 and the growth

in the table which follows.

ADDED VALUE IN THE MANUFACTURING INDUSTRY (million dollars)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012VAB 526,1 909,7 1240,8 2008,5 3150,2 4117,3 4069,4 5013,0 6037,4 7776,3VAB p/capita (USD) 33,9 57,0 75,6 118,9 181,2 226,9 232,2 275,3 311,0 390,0

Growth rate (%) 11,9 13,5 24,9 44,7 32,6 11,0 5,3 10,7 13,0 6,0

Employment – – 34661 37261 40056 42484 45222 48616 52155 56849

(USD) – – 35800 53903 78644 95535 94526 107060 115764 136788

than the GDP per capita, so that the demand for industrial goods can be a springboard, which is important for growth in the economy.

EVOLUTION OF THE VALUE PER CAPITA OF FOOD AND BEVERAGE PRODUCTION (USD)

0

50,0

100,0

150,0

200,0

250,0

Food VAB per capita (USD) Beverage VAB per capita (USD)

2001 4 6 8 2010 122 3 5 7 9 11


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CEIC / UCAN

After oil extraction activities, the manufacturing industry is the highest

the obstacles that hinder its sustainable growth – and which were earlier noted

niches.

Between 2002 and 2012 the manufacturing sector grew at an annual average

in the GDP for the same period. However, the ability to generate employment did not follow this industrial growth. In fact, between 2005 and 2012 employment

The analysis of the 2009 Economic Report, regarding the dynamics of

maintained.

The activities related to textiles, clothing and confection, virtually

although in 2011 and 2012 industrial policies registered initiatives,

associations, particularly the AIA, have consistently warned about the

COMPARED EVOLUTION OF GDP AND INDUSTRIAL VAB PER CAPITA

0

1000,0

2000,0

3000,0

4000,0

5000,0

6000,0

Industrial VAB per capita (USD) GDP per capita (USD)

2002 2004 2006 2008 2010 20122003 2005 2007 2009 2011

SOURCE: CEIC, File

| 89


-

Likewise, chemical are also positioned to increase, again, driven by

industry has denoted a positive development, due to public and private investments, in improving working conditions of the industrial park and its

It is found that from 2005 to 2012, the sector exhibits an average value of about $83,000 per worker, well above the values recorded during the military

74

74 However, it is necessary to relativize these values, since a further study on productivity would have to be done on the basis of physical and non-monetary productivity, always

MODIFICATIONS IN THE INDUSTRIAL STRUCTURE OF ANGOLA

Food

Beve

rage

s

Toba

cco

Woo

d

Chem

istry

Non

met

allic

min

eral

s

Met

allic

prod

ucts

0

20

10

30

40

50

60

70

2006 2007 2008 2009 2010 2011 2012


90 |

CEIC / UCAN

Still, the margin for improvement is very large – and fundamental to

successful.

ability of the manufacturing industry to create relevant net employment is visible.

The manufacturing sector will come as a huge opportunity for skilled labor

200720062005

20092008

201020112012

0 50000 100000 150000

EVOLUTION OF PRODUCTIVITY


PRODUCTIVITY GAINS (%)

2005 2007 2009 2011 2012

19,0

26,323,3

4,71,1

3,05,3

18,2

2006 2008 2010


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3.3.2.2 Industrial policies

Industrial policy in 2012, in essence, remained the same and with the same

needed to trace the trajectory of change in the sectoral matrix of the country: 75

Theory – specifically the disciplines related to the Economy of Development or Economic Development – or the empirical evidence drawn from the study of many international experiences, converge on the strategic importance of

75 Information made public reveal that a foreign consultant company is to the hired to prepare studies that may enable the government to have a more accurate awareness of the

economy. Since most companies and consultants that will perform these import tasks are from overseas and study overseas to perform important tasks that could be assigned the Angolan Universities. Because these foreign companies usually allow researchers to Angolans are tasks of gathering information and this establishment of internal contacts. It seems that who is at the origin of this International competition is the local representative of the African Development Bank.

INDUSTRIAL EMPLOYMENT

2005 2007 2009 2011 20120,0

20000

40000

60000

2006 2008 2010

SOURCE: Report on the Balance Sheet of the Government of Angola, CEIC, Studies on the manufacturing industry.

92 |

CEIC / UCAN

be considered one of the most prominent notes on Industrial Policy 2012: from a Ministry of Geology, Mining and Manufacturing – which added internal

abolished the Ministry of Industry and Trade, many years before) there is only

deserve a certain convergence of opinions76.

The policy of creating centers and industrial parks is the best to support

begins. The industry is, par excellence, a sector associated to private enterprise and the state should be supportive of its implementation by providing a set

that these investments may reach 1.6 billion dollars for the next 10 years). However, the results obtained so far seem to fall short of those expected77. It is

76

that had been envisaged. At least, in terms of collection and systematization of statistical

products, construction materials and mining production.77

of the factories built and equipped, in the Special Economic Zone (ZEE) of Viana. In the balance sheet of the 1st quarter of 2012 , presented on 10 May, the Government announced the coming into operation of a further 18 industrial units of the ZEE.

| 93


true that the growth of the sector depends not only on the sums invested by the

value of bank loans to the economy.

the high price of industrial buildings and factories78

will decrease in value.

Although laudable, the State should not provide complete investment suggestion packages to private business, selecting activities, delimiting areas of installation, determining the amount of hand labor to employ, defining manufacturing processes, showing that projects have suggested economic and

79.

known80. We indicated some of the most important:

78 Some studies known about the industry identify high prices, constraints to the activity and the high risk involved as some of the causes behind the lack of interest of private investors in relation to these government initiatives.79

implications on the economy of the province of Malanje, but it is not possible to override the private opinion with the view of the State, providing a detailed plan of what to produce, where to produce, in what quantities to produce, how much to invest, how many jobs to

through its current president, gave a detailed presentation of its development plan in the Forum on business opportunities in the province of Malanje (21 and 22 May 2010).80

businessmen (1.5 billion dollars with interest rate subsidies and 1.2 billion of a Risk Guarantee Fund) and a line of credit of 500 million dollars.

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CEIC / UCAN

Units.

Establishment of public-private partners to promote national industrial

Textang II).

Development of a strategy for the development of the agro-industry.

Several workshops to train workers.

3.3.3

3.3.3.1

EVOLUTION OF OIL PRODUCTION (BASE 100 IN 2002)

0

50,0

100,0

150,0

200,0

250,0

1998 2002 2006 2010 20122000 2004 20082001 2005 20091999 2003 2007 2011

SOURCE: CEIC, File Studies on the Oil Sector and GDP index.

GDP index

| 95


country has become the top customer of Angolan oil since 2007, increasing its

funders in the recovery of infrastructures.

Precisely because of this dependence on the exterior market, and some

the period 1998/2012.

The best of the oil sector in Angola stood in the period 2004-2008, just as

regressive phase occurred between 2008 and 2011 and, in 2012, the growth rate

Monetary Fund81 and Government82 annual growth of this area may be between

trend line of long term growth.

81 International Monetary Fund – Angola 2012 Article IV Consultation and Post Program Monitoring, August 2012.82 National Development Plan 2013-2017.

THE TIME AND THE WAY IN THE OIL SECTOR

2012-10,0

5,0

15,0

0

30,0

-5,0

10,0

20,0

25,0

1998 2003 2005 2007 2009 20112001 2002 2004 2006 2008 2010

SOURCE: CEIC, File Studies on the Oil Sector and GDP index.

Growth rate Trend line of growth

20001999

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CEIC / UCAN

LNG production has declined during the period of 2009/2012, but the refinement of oil has increased systematically, explained by the growth of

reasons related to technical problems, as widely broadcasted by the news media-

than 64 200 billion dollars. Apparently, 2012 represents a recovery compared to previous years.

ADDED VALUE IN THE OIL INDUSTRY (million dollars)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012VAB 6151 6830 9856 17039 23383 33173 47479 29772 36715 47952 51278

VAB p/capita (USD) 408,2 440,4 617,6 1037,7 1383,9 1908,1 2654,0 1617,3 1938,2 2390,8 2556,6

20,6 –2,2 13,1 26,0 13,1 20,2 12,3 –5,1 –3,1 –5,5 4,3

Employment – – – 12310 12843 12850 12876 12616 14557 15862 15854

Prod. (thousand USD) – – – 1384,2 2081,8 2000,6 3131,3 1945,9 2115,5 2411,0 3234,4

intensity and technology, it should be so.

As is known, the oil sector has been the major driver of economic growth in

OTHER ENERGY PRODUCTS6894,3

1480,8

6673,3

1875,1

6486,3

1905,4

2010 2011 2012

SOURCE: CEIC, File Studies on the Oil Sector, based on Studies of the Report Balance of Petroleum 2012.

| 97


generated from the exploitation of oil. Thus, the total contribution of oil to

The following graph represents seven countries that produce and export oil,

Nigeria, Angola and Brasil83

sovereign wealth fund, currently endowed with close to 500 billion dollars.

note, for example, that in countries such as Malaysia, Mexico and even Indonesia,

83 Indeed, it seems that we are approaching the descending stage of the oil cycle in the

1.48%; Europe and Eurasia = 1.34%, Central and South America = 0.73%; America North = 0.26%. Perhaps this is a partial explanation for the high price of a barrel of oil.

SOURCE: CEIC, File Petroleum in the World based on BP Statistical Review, June 2012.

OIL PRODUCTION (THOUSAND BARRELS PER DAY)

Ango

la

Nige

ria

Braz

il

Mal

asia

Mex

ico

Indo

nesia

Norw

ay

0

1000

500

1500

2000

2500

3000

3500

4000

2000 2003 2005 2007 2009 2011

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CEIC / UCAN

The GDP per capita is the highest in Malaysia, Mexico and Brazil (Norway was excluded for obvious impossibility of comparison, since their average per capita income is around $ 96,000 annually) and minimum in Angola and Nigeria,

has stabilized at around 640 million barrels per year (slightly over 1750000

SOURCE: IRIS/University of Stavanger,

GROSS DOMESTIC PRODUCT PER CAPITA, IN 1980 DOLLARS

Ango

la

Nige

ria

Braz

il

Mal

asia

Mex

ico

Indo

nesia

0

1000

2000

3000

4000

5000

6000

2000 2003 2005 2007 2009 2011

OIL PRODUCTION AND EXPORTS

0

300000

700000

200000

100000

400000

500000

600000

SOURCE: CEIC, Files Comparative Macroeconomic Framework and Studies on the Oil Sector in Angola,

based on data from the Ministry of Petroleum.

Oil exports (thousand barrels)2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

| 99


absolutely fundamental.

this, its ability to create jobs is lower, as previously underlined. One cannot rely

of politicians and businessmen, in their accumulation of wealth. As noted

workers84.

84 For the purposes of macroeconomic accounting of jobs, the jobs created by the sector of services to the oil industry should be imputed to the National Accounts tertiary sector.

49278 in 2009, 41385 in 2010, 43658 in 2011 and 47611 in 2012.

OIL REVENUE VOLATILITY

20120

20,0

60,0

100,0

120,0

40,0

80,0

2002 2003 2005 2007 2009 20112004 2006 2008 2010

Oil exports revenue (billion USD) Price of barrel of oil (USD)



100 |

CEIC / UCAN

discovered in the country.

in total investments which, in 2012 assumed more than one third of investments secured by foreign companies. Indeed, between 2006 and 2012 Sonangol

3.3.3.2 The Oil Policy

An important aspect of oil policy in 2012, similarly to the past few years now,

PRODUCTIVITY AND EMPLOYMENT

20120

4000

8000

2000

12000

1800016000

6000

10000

14000

2005 2007 2009 20112006 2008 2010

SOURCE: CEIC, File Studies on productivity and employment.

INVESTIMENTS IN OIL (MILLION DOLLARS)

805

8254

2258

8585

2497

10438

6565

3824 4646

12744

4868

15114

6449

19348

Private investmentSonangol investment

2006 2007 2008 2009 2010 2011 2012



| 101


changes in the global energy matrix. For now, oil remains a dominant source, but

favor of sources that have a less aggressive impact on the environment. But also,

balance.

Maintaining oil as the largest worldwide energy source for several more years is crucial to the process of diversification of Angola’s economy, whose

Oil reserves in Angola continue to be evaluated between 13.2 billion 85,

2017 (1.947 thousand barrels, peaking between 2007 and 2.083 thousand barrels

can provide Angolans. Official political thinking has been keen to support the creation and development of an entrepreneurial class Angolan, capable of competing in the domestic market against foreign companies which are increasingly settling in Angola, making very high profits, often disregarding

86. This class of entrepreneurs, usually have a strong connection to political power, have managed to accumulate substantial wealth, but the process to achieve it has raised reservations in terms of transparency, which eventually leads to the existence of a very large gap between rich and poor / remedied in the

socially fairer is to invest them and also to create a working class which is at

85 BP Statistical Review of World Energy, June 2012.86 It would be sensible to change the notion that the country provides opportunities for gains and improvement of living conditions to all but the Angolans.

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CEIC / UCAN

87. This is of

skilled Angolan workforce.

policy of the sector’s framework – which, of course, involves training – but the

class.

Other aspects of oil policy in the country, carried out by the Ministry of Petroleum were88:

Implementation of the General Plan for the Liberalization of Sector

Angola LNG Project:

.

87

would make citizens more equal.88 Ministry of Petroleum, Balance Report for 2012.

| 103


.

Other aspects also relate to the liberalization of distribution of fuels and

In late 2012, the country had 557 posts of fuel supply (24 more than in 2011),

The Director of Storage Plan has the strategic goal of building a network of fuel stock parks, geographally located to maximize the balance between cost /

According to the 2012 Balance Report of the Oil Ministry, various important diplomas were approved to normalize the activity of the oil sector, amongst which, the following:

1.of measures on Subsidy Rates of Fuel Oil Products.

2. Law No 02/12 of 13 January on the Exchange Regime Applicable to the Petroleum Sector. This law aims to establish the exchange rate regime for

crude oil and natural gas.

3.between the government of Angola and of Angola, SARL, on

Decree.

4.Board of Directors of the Oil Fund.

5.and Research, Exploration and Oil Mining and Trading Rights contracts concluded between the Republic of Angola and the Republic of Guinea.

6. Order No. 113/12 of 13 February, which grants further extension of the

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CEIC / UCAN

17.

18.

19.

participation in petroleum operations in the light of Law 10/04 of 12

10.

11.Block by two years 04/05.

12.

13.

14.

of the Kizomba satellite project in Block 15.

15. Executive Decree No 206/12 of 12 June, repealing Executive Decree

16.downloads.

17. Executive Decree No 228/12 of 26 July, extending the second initial

18.of Law 2/12 of 13 January, on the Exchange Regime for the Petroleum Sector.

19.

provisions in this Act.

| 105


20. Executive Decree No 398/12 of 02 October, extending the Initial

21. Executive Decree No 437/12, dated November 8, authorizing the extension of the Initial Exploration Phase of the Production Sharing Contract of Block 32, for a period of three years, followed by a subsequent

22. Executive Decree No 440/12 of 03 December, which authorizes commencement of commercial production operations of the Pluto,

23. Presidential Decree No 239/12 of 04 December, which approves the Organic Statute of the Ministry of Petroleum and repeals all laws contrary

of 14 February.

3.3.4

3.3.4.1

This sector combines the extraction of diamonds, and other minerals as diverse as ornamental rocks and aggregates, for the construction industry.

But the most important activity at the moment is in diamonds, which, such as oil, is also subjected to the whims of international market behavior, as is the fact that it is not, to full extent, a typical raw material. This sector has

still being felt. Between 2007 and 2011, the sector had a cumulative loss of

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CEIC / UCAN

Due to lack of investment, paralysis of the public company Roremina (holding black granite and other ornamental minerals), is the reason that has been officially given for the fall of almost one third in production of ornamental subsector.

sector helps one understand just how random the nature of its behavior is. The uncertainty that surrounded it made investments high risk, causing entrepreneurs to postpone their decisions.

to correct the growth tendency, although there is awareness that the nature of

Although the line representing the GDP index shows perform increase, significant fluctuations between 2006 and 2012 are noticeable. Due to the

VERY OSCILLATING PERFORMANCE OF DIAMONDS PRODUCTION

2012-50,0

50,0

100,0

150,0

200,0

0

2000 2003 2005 2007 2009 20112001 2002 2004 2006 2008 2010

SOURCE: CEIC, File GDP Index.

Growth rate Trend line GDP index

1998 1999

| 107


Overall, 37 years after its independence, the country still does not have sufficient coverage and geological knowledge of its potential in this field of

minerals with which nature endowed it. This gap limits the release of ventures

The training of geologists and mining engineers – training directly linked to the rational exploitation of this mining activity – has been very poor and incomplete, causing the importation of expatriates to fill these shortages of

The international diamond market is not in a good moment, not having yet recovered from serious depreciation suffered over the last four years, undermining the confidence of markets and private investors. Therefore, its

to 2011the recovery of this industry in nominal GDP value was solely due to price

ADDED VALUE IN THE DIAMOND INDUSTRY AND OTHER EXTRACTIVE (million dollars)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

VAB 540 628 636 885 961 1269 926 601 768 921 1127

–2,1 19,8 0,8 16,2 30,9 5,1 –1,9 4,6 –10,3 –0,7 9,0

Employment – – – 39799 41789 42572 43538 43693 23550 24570 24570

(USD) – – – 22228 27577 24788 21229 13748 32603 37470 45868

The representativeness of the diamond industry, ornamental stone and

to South Africa and Botswana, where diamond mining business is a billion dollar business each year (in Angola it was only one hundred and twenty seven million

world ranking of exporters of diamonds (4th place).

Also in the employment share of this sector, job creation is very weak.

the country.

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CEIC / UCAN

dollars per worker in 2012, which puts this activity as the third place in the overall non-oil economy, behind manufacturing and market services. A trend

and technology, improving the quality of human resources. Inconformity of this

reached its lower register of the period, 2005/2011.

market behaviour.

DIAMOND REVENUE VOLATILITY

20120

200,0

600,0

1000,0

1400,0

400,0

800,0

1200,0

2002 2003 2005 2007 2009 20112004 2006 2008 2010

SOURCE: CEIC, File Comparative Macroeconomics Framework.

Carat price (USD) Exports (million USD)

COMPARED EVOLUTION OF PRODUCTIVITY AND EMPLOYMENTIN THE DIAMONDS SECTOR

20120

15000

25000

10000

35000

5000045000

5000

20000

30000

40000

2005 2007 2009 20112006 2008 2010

SOURCE: CEIC, Studies on Employment and Productivity.

Employment

| 109


3.3.4.2 Diamond Policies

Essentially, effort has been focused on increasing the knowledge of the

preserve the environment. Accordingly, studies, aimed to assess the extent of

carried out in some provinces.

Given the growing interest in mining in Angola, from private agents, the

3.3.5

3.3.5.1

both in public and private ventures89. Firstly of infrastructures material – for roads, railways, ports and water energy90 – and secondly, of real estate.

From a recent work trip to South Africa and Zambia by a CEIC team, where

was made on the two economies, it was comprehended that this sector is of utmost importance towards maintaining minimum GDP growth and employment

works related to real estate and industrial and agricultural buildings, maintain economies’ temperatures steady, particularly those with poorly diversified

form of its contribution to the Gross Fixed Capital Formation, which, as we all know, in terms of National Accounting integrates the components of this

89

90 In the electricity sector, construction of the Dam III, in Ethiopia, should highlighted, a country that has gone through a period of high economic growth, the highest in Africa (243 meters above sea level). With the existing Dam I and II, a combined electrical power will be available at 1879 MW.

110 |

CEIC / UCAN

macroeconomic variable. The investment is the oxygen of economies, without which one can hardly ensure sustained economic growth rhythms.

It is large and medium size projects that pave the way towards growth of

that energy and transport infrastructures hold the economic frame. Major

In Angola, after 2002, construction also has presented very interesting

However, despite this excellent dynamic – common in economies in a process

years.

CONSTRUCTION PERFORMANCE

0

300,0

200,0

100,0

400,0

500,0

600,0

700,0

1998 2002 2006 2010 20122000 2004 20082001 2005 20091999 2003 2007 2011


Growth rate Annual rates

Valu

es in

%

ANNUAL RATE OF GROWTH OF CONSTRUCTION

0

20,0

15,0

10,0

5,0

25,0

30,0

35,0

40,0

1998 2002 2006 2010 20122000 2004 20082001 2005 20091999 2003 2007 2011SOURCE: CEIC, File GDP Index.

Perc

enta

ge

| 111


Careful analysis of the previous graph distinguishes the existence of two distinct periods, between 2002 and 2012, in the growth process of the

The 2008 peak was due primarily to the launch of a range of works, due to

of 2010 U.S. $ 3.1 billion were paid, of the amount due of the Public Investment Programme of 2008 and 2009, which had to be reduced (from 5745 million

91

From 2008, some events forced the reduction of growth rates in the construction industry and public works. The financial crisis and subsequent economic crisis, the accumulation of arrears and a change in the public investment policy, which should not be alienated from the Stand-By Arrangement

to contain public spending, channeling resources to vital social spending and infrastructure projects.

The growth rate of the public works sector, presented in the chart below, presents a behaviour similar to the growth rate trend line, thus verifying an

91 GSB Report of Reasoning, 2012.

GROWTH INDEX OF CONSTRUCTION

0

300,0

200,0

100,0

400,0

500,0

600,0

700,0

1998 2002 2006 2010 20122000 2004 20082001 2005 20091999 2003 2007 2011


Growth index

Valu

es in

%

112 |

CEIC / UCAN

The ups and downs of construction (evidenced by previous graphs) and especially the loss of growth velocity patented in recent years have been of

Despite this momentum, the sector has enough weaknesses, some structural in nature, such as:

Dependency on imported building materials.

quality management.

Other weaknesses, more cyclical in nature:

Delays in the availability of adequate financial funds to implement the physical works to complete the contract terms.

Constraints in the process of payment of arrears.

Difference between the budget allocated, in relation to the requested,

contract periods and consequent cost increase.

Population growth: although the exact population rate in Angola is not

92.

93 of the total population. This rapid urbanization, combined with population growth, engendered an

92 GSB Report of Reasoning, 2012.93 GSB Report of Reasoning, 2012.

| 113


intensification of demand for basic services, housing and circulation

The high tax receipts of the government from oil exploration gave the

economic and social infrastructures.

Low level of State responsibility due to 27 years of civil war.

table.

ADDED VALUE IN THE CONSTRUCTION INDUSTRY (million dollars)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012VAB 393 493 891 1241 1881 3506 4377 5029 6497 7756 7664

10,0 12,6 14,0 16,9 30,0 37,1 25,6 23,8 16,1 12,0 7,5Employment (thousand) – – – 54,8 206,7 214,0 240,4 303,9 323,4 330,5 342,4

– – – 22639 10003 13701 18178 16547 20091 23470 13727

Construction by September 2012, and under the Ministry of Construction, also from that date, we highlight the road infrastructure, which has been an

3,7

WEIGHT OF GDP (%)

6,87,4

6,2

5,05,25,8

4,54,14,7

3,63,54,0

SOURCE: CEIC, File Economic Report 2004, based on official data.

Public works and construction

Aver

age

97/0

0

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

114 |

CEIC / UCAN

and creating movement in the job sector – but it is especially an important

road maintenance was contracted.

were recovered.

surveys (magazines and national newspapers and reports from international

These three years had a programmed volume of Public Investment, from 2010 to 2012, in the amount of 699 744 028 323 AKZ, having achieved 436 830 538 126 AKZ.

3.3.5.2 Public Investments

Between 2002 and 2012, the state invested 65.1000 billion USD in public works in the country, divided annually, as indicated in the chart below. Despite

MILLIONS OF DOLLARS

769,6 1059,5 969,0 1545,7

5425,2

6926,4

11896,0

9371,67979,3

9023,810143,0

2002 2006 2010 20122004 20082005 20092003 2007 2011

SOURCE: CEIC, File Comparative Macroeconomic Framework, based on Government Execution Reports.

Public investment

| 115


One of the greater challenges for the state was the goal, set in 2008, to cons-

state’s housing programme and although many houses were built, the goal was far from being met.94

3.3.5.3

The major programs enrolled in OGE 2012 include:

Program for housing development.

Program for planning and urbanism.

Program for capacity expansion of electric power transmission.

In the PIP of 2012, the sector, a total of 280 projects, 146 refer to the

rehabilitation and construction of public infrastructure, and the remaining

planning, urban planning and others.95

94

houses and provide them with the necessary infrastructure.95 Projects enrolled in PIP in 2012 and under the Ministry of Planning and Construction, in the period January to September 2012, and by the Ministry of Construction, in the period

116 |

CEIC / UCAN

In order to solve the problem of training skilled manpower, the National

Establish mechanisms for consultation and vocational guidance and

Create, with the support of the civil society and the private sector, distance learning modalities and e-learning for access to skills, knowledge and professional training in priority areas.

workers to learn new skills, particularly those related to technological

Build incentive modalities directed to businesses and civil society

favouring the establishment of e-learning networks.

Despite the favourable record in this sector, its growth may be threatened by the following challenges:

Difficulties and weaknesses of national transportation and circulation,

Uncertainty about the ability of the economy to maintain a growth rate as intense as the one registered in the past that, nonetheless, turned out to

Between 1998 and 2001, the average price of a barrel of oil stood at $ 18.8, while in the 2009/2012 period it was $ 85.4. What guarantees are there

| 117


the high demand for housing and the powerful public investments in infrastructure have a very large dependence on oil revenues.

The Structuring Projects of National Priority and of Public Initiative are

96

The implementation of the program of rehabilitation of secondary roads, which began in 2012, projects the recovery of 4590 km in fourteen Provinces97 with a budget of 3539 million dollars.

of 17500 km throughout the country.

At regional level and in the energy sector an investment of 173 billion dollars

dollars.

96 National Development Plan 2013-2017 (December 2012).97 Excluding the provinces of Malanje, Bengo, Huambo and Luanda.

STRUCTURAL PROJECTS

EnergyWatersRoadsOther

11,2%

7,8%

13,7%

67,3%

118 |

CEIC / UCAN

The RIDMP98

airports for a period of 15 years (2012 2027) worth $ 100 billion. In Angola, major

Namibe Corridor.

98

SOUTH AFRICA Cape Town

KenyaNairobiRwanda

Burundi

Rep. of Congo

Luanda

KinshasaBrazzaville

Dar es SalaamTanzania

Malawi

Mozambique

Harare

AngolaZambia

Lusaka

Namíbia

Windhoek

BotswanaZimbabwe

MaputoGabarone

PretoriaJoanesburgo

Swazilandia

Lesotho

Planned Interconnectors

SOURCE: Regional Infraestructure Development Master Plan – SADC.

SADC REGIONAL POWER INTERCONNECTOR PROJECTS

| 119


In the water sector were identified 34 infrastructure projects that can

16 billion dollars.

Increase the irrigated area of 3.4 million hectares to 10 million.

Increase the output of power of 12 GW to 75GW (i.e., an increase of the

to Lubango.

SOURCE: Regional Infraestructure Development Master Plan – SADC.

Angola

Brazzaville

Kahemba

Kananga

Lucapa

Luena Solwezi

LusakaMonguMenongue

Huambo

Lobito

Ngunza

Benguela

Lubango

Lubango

Kuito

KasaneLivingstone

Zambia

SaurimoMalange

NdalatandoLuanda

Caxito

UlgeMbanza Congo

Development Corridor

Malange Development Corridor

Nimbe Development Corridor

Lobito Development Corridor

KinhshasaMadingou

MatadiCabinda

Pointe Noire

120 |

CEIC / UCAN

Energy: expand and improve the quality of electricity supply, to meet

the country.

Water: promote, on sustainable basis, the supply of potable water to

the country’s development process.

Planning: promoting redevelopment, rehabilitation and enhancement of urban centres and rural areas, enabling the orderly settlement of

99.

Transport: provide the country with a network of integrated transport,

of the process of economic development, and enhancer of the territorial

At the regional level there is an inadequacy of infrastructure, which undermines the competitiveness of economies, a situation exacerbated by

the SADC region there are approximately 272 million inhabitants. In 2027 it is

facing a number of challenges, including:

99 In relation to housing, the plan aims to build 453,317 homes between 2013 and 2017.

| 121


without access to the sea.

High number of people without access to safe drinking water, adequate

Energy, Transport, Information Technologies and Communication Technology

Tourism.

3.3.6 Transports

3.3.6.1 General remarks

years of conflict , the result of military attacks and negligence, causing the

was characterized by destroyed transport infrastructure and the absence of

in the access to workplaces, markets, hospitals and health centres, schools and

However, since 2004, the huge investments in the rehabilitation and construction of roads, railways, ports and airports are transforming the infrastructure of the country and have a positive effect on productivity. The country has taken advantage of its oil wealth, loans from Portugal and Brazil, among other countries, and Chinese credit lines to transform its infrastructure100. In 2011, Pushak and Foster (2011) indicated that public

emphasis to large projects and loans for the construction of infrastructure (Soares de Oliveira, 2011).

100 Although certain Chinese companies involved in projects related to the credit lines from China were to settle in Angola after the completion of their projects, the most important

2011).

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CEIC / UCAN

With regard to air transport, the main international airport of Angola is 101.

102

flights per day, and it is expected that traffic will increase. The Luanda new international airport, under construction 40 km east of the capital, aims to

l, with 4 tracks and a capacity for 7 to 10 million passengers. According to the Balance of the Public Investment Programme for the year 2012, prepared by the Ministry of Transport, also several provincial airports, such as Soyo, Uige, Dundo Huambo, Luena, Menongue Delantando Catumbela, Kuito and Kuanavale Saurimo

The railway includes three relevant rail tracks (Luanda Railways – CFL, Benguela Railways – CFB, Moçâmedes Railways – CFM) that were built from the

103. At its peak, in 1973, these lines carried 9.3

the country. The towns in the interior of Angola have been excluded from the

sector, the one which currently employs more Angolans, should be the main

from a functioning rail network. Thus, in 2005, the Government of Angola

101

Lufthansa, Ethiopian Airways, Kenya Airways, KLM, Air Namibia, Mozambique Airways, Brussels Airways, Iberia Airways and Emirates Airways.102 Fully renovated, the airport currently covers an area of over 37,543 m2. It has two runways with asphalt pavement of 3700 meters and 2600 meters each, and 8 spaces for

lots for cars, taxis and buses with a capacity for 856 vehicles.103

links the Port of Lobito, Luau in Moxico province and the CFM connects the city of Namibe, province to the east Kubango. In the context of the development of the railway system there is little reference to the national road and rail to Amboim, in the province of South kwang.

| 123


China104. According to the balance of the Public Investment Programme for the

and pathways. Is also in the process of receiving new equipment, including

the Government of Angola intends to merge the three railway companies into

new company, that will be designated Angolan Railways. The future development plans to include the extension of the lines of the North and South to East and the

West lines to form a complete network.

but in a scheme involving the largest possible number of countries. One of the

Angola, and that may help solve a major problem in countries such as Zambia, the

can export and import their goods. Parallel to the structuring measure translated

of the levers that will enhance the development of the region, where the Lobito

CFM linking the neighbouring Republic of Namibia is under study by the central

104 Large numbers of all projects currently underway in Africa for rehabilitation of rail systems have the support of China, which is increasingly becoming an essential partner in the development and growth of the continent.

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CEIC / UCAN

of Chamutete, in the Huila province, to the border area of Santa Clara (Cunene). This will be a complicated enterprise, due to the existence of very rugged terrain, with numerous rivers, and is therefore the need for further studies and create

in turn connect them with the neighbouring countries, in order to intensify trade

per hour. Therefore rehabilitation and modernization are necessary for the

security parameters. The railways structural measures also include the urgent

in each of the lines.

Huambo, the building, in the near future, of three railway lines in the capital of

is the study on the light railway line in the metropolitan area of Luanda, to meet

created in two main corridors mobility of the country’s capital, one of which will

of inter-modality.

Despite the grandeur of investments that in recent years the railway sector

is at a crossroads where a weak market share coexists with strong calls to public

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stops that date back to the colonial past.

the road freight was dangerous and limited, thus condemning so many villages

105. However, since the end of the war, Angola

Infrastructure, approved by the Council of Ministers in 2005, has been ongoing

476 Km of roads of the Fundamental Network and twelve bridges that were built or repaired in Kifangondo/Caxito/Uige/Negage, two road in Huambo/Caála, two in Humpata/Bailundo, while the stretch Matala/Matala won three and Huambo/

and Keve, the last three being enormous in size. Other bridges are being built on the rivers Cunene and Kwanza Catumbela (Kabbalah). At this early stage, some of the bridges were provisionally made of metal, to ensure the immediate mobility of people and goods across the country. Several roads were built, such as the Luanda highway, and Bichequete-Massabi road (Cabinda). The most important road that was rebuilt in 2006 was the Sumbe-Luanda road, with a length of 497.5 Km. The

some coastal areas, the greatest number of people possible. INEA also took into account that there are roads that serve the regions with strong economic potential, that travel through centres with defined commercial traditions,

of this Programme had to consider was the fact that some roads, due their

105 More than 300 bridges were destroyed, during the rainy season many of the main road became impassable and the roads from the north and interior of the country were

75,000 km, which included 8000 miles of paved roads and 7870 km of gravel roads in 1994, to 51 000 in 2001 (World Bank, 2012).

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territorial integrity, also allowing access to the country’s main ports. Based on the

streets in provincial capital cities, municipal and communal headquarters, traversed by these works.

especially in concrete, in order to conform to the characteristics of these structures to the roads under construction in the country. Since 1992, that

structures, both single and double reinforced. Rehabilitation/construction of 327 bridges are currently ongoing , including those included in the road works

bridges across the country, between 2013/2017, with emphasis on major routes.

4800 linear metres of provisional metal bridges. Currently is undergoing the

by the State and prevent the accelerated deterioration of rehabilitated roads,

study called North-South corridor between the southern border in Santa Clara, progressing through the interior of the country to the northern border in Banza Sosso, and it is planned the creation of the Nabime Corridor, linking

promotes the development of the country’s interior regions. For the same period,

handled and jobs generated by companies in the transport sector106.

106

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PROJECTION OF PASSENGERS CARRIED IN BUSINESS TRANSPORT 2013-2017

2009 2010 2011 2012 2013 2014 2015 2016 2017

ETP Cabinda 199 624 252 000 172 241 177 408 186 279 195 593 209 284 228 120 253 213

TCUL 20 496 635 26 561 390 39 605 031 40 397 132 41 609 046 42 441 226 43 290 051 45 454 554 48 636 372

CFB 392 621 389 303 125 405 156 756 235 134 376 215 639 566 1 151 218 2 302 436

CFL 3 558 211 2 880 627 2 861 475 3 004 549 3 154 776 3 375 611 3 713 172 4 270 147 5 124 177

CFM 96 058 21 865 0 0 506 880 608 256 790 733 1 107 026 1 660 539

TAAG 1 087 130 1 011 920 1 017 033 1 1067 885 1 121 279 1 199 768 1 319 745 1 517 707 1 821 248

SOURCE: Ministries of Transports of Angola.

PROJECTION OF CARGO MANIPULATED IN BUSINESS TRANSPORT 2013-2017

2009 2010 2011 2012 2013 2014 2015 2016 2017

ETP Cabinda 460 573 1 002 1 052 1 105 1 182 1 300 1 495 1 794

UNICARGAS 1 629 312 775 870 932 736 979 373 1 028 341 1 100 325 1 210 358 1 391 912 1 670 294

CFB 30 4 0 0 540 670 594 737 683 948 820 737 1 025 921

CFL 0 12 440 6 606 7 267 7 993 9 192 10 755 12 906 16 132

CFM 7 288 14 462 0 0 364 440 400 884 461 017 553 220 691 525

P. Cabinda 350 893 436 270 490 704 515 239 541 001 578 871 636 758 732 272 878 727

P. Soyo 44 813 246 414 240 634 252 666 265 299 283 870 312 257 359 095 430 915

P. Luanda 9 022 912 9 157 534 7 308 046 7 673 448 8 057 121 8 621 119 9 483 231 10 905 716 13 086 859

P. Lobito 2 462 084 2 396 427 2 792 054 2 931 657 3 078 240 3 293 716 3 623 088 4 166 551 4 999 861

P. Namibe 770 175 696 960 913 755 959 443 1 077 415 1 077 934 1 185 727 1 363 586 1 636 304

P. P. Amboim 111 709 130 444 240 667 252 700 265 335 283 909 312 300 359 145 430 974

TAAG 17 674 11 962 15 366 16 134 16 941 18 127 19 940 22 931 27 517


EMPLOYMENT GENERATION IN BUSINESS TRANSPORT, 2013-2017

2009 2010 2011 2012 2013 2014 2015 2016 2017

in the Transports sector 4 168 956 3 240 34 732 39 942 45 933 55 120 66 144 82 680


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Regarding shipping, Luanda, Lobito, Namibe and Cabinda are the main loading

107. Cargo

(Harding, 2009)108 .

being visible offshore, waiting to enter the port. The Port of Luanda has

for long delays and poor performance, compared to other ports in Africa (Pushak and Foster, 2011).

Regarding the Port of Lobito, Angola’s government has invested $ 1.2

increased to 11 million tons. The investment includes the expansion of the port’s berth, to allow the simultaneous docking of 12 vessels, in comparison with the

structural projects: 1 container terminal, 1 mining terminal, and 1 oil terminal109.

107

ships with a maximum size of approximately 30 000 tons deadweight (Pushak and Foster, 2011).108

Maersk.109

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The Executive negotiated with the Government of China a line of credit to support the proposed extension of the Port of Lobito. Thus, China Harbour

and mining terminals, while Kellogg Brown and Root (KBR) is responsible for the

the CFB, in particular those in the regions away from the sea. The mining terminal should have the capacity to handle 3.65 million tons, to be expanded to

owners to divert cargoes to Ponta Negra. For these reasons it was decided to build a bridge pier and build a new deepwater port elsewhere. In the 2008-

phenomenon of siltation and , to give a series of significant steps

work of the new bridge pier, the awareness on the local public opinion on port

process.

The Port of Namibe has two terminais110

works and modernization of its equipment , under the Programme of

In the port of Porto Amboim, there is currently no loading and unloading

Porto Amboim studied how to adapt the load bridge piers dedicated to expanding

110

general break, bulk and container, and the ore terminal, (BAG-SEA), built ten years after

today also adapted to fuels and lubricants.

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Programme since 2007 and was budgeted in the 2007/2008 biennium for

conducted a transaction only in 2007 that did not allow implementation of the project. However, a Memorandum of Understanding was signed between

by Sonangol. As a positive point for the activity in the region, Paenal (Porto Amboim Shipyards) inaugurated a plant to support the oil industry with unique features, as it is the only one able to integrate the modules built by that company throughout this African region.

The Soyo Port Company is a Public Company (SE) of average size and

the country, the loading and unloading of goods and their storage, the provision of auxiliary load and navigation services to with the highest efficiency and lowest cost index, as well as control and monitoring of the industries installed or to be installed in the port area, in all that relates to safety and speed of operations, as well as environment protection. The Ministry of Transport believes that the economic and financial situation of the Port of Soyo will

is very favourable and ensures the balance between revenue and expenditure.

(both geographal as demograph) and the consequent increase in demand for port services. The Port of Soyo may, in the short term, contribute to help decongest the hinterland of Luanda and contribute to the development of the region.

In short, according to the balance of the Public Investment Programme Relating to the fiscal year 2012, prepared by the Ministry of Transport, the

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3.3.6.2 The provision of transport services

and the plans for their rehabilitation and modernization, it is important to characterize the transport flows and as how economic agents make use of transport services available in the economy. The transport system that developed

exponentially. The needs for mobility have grown and their standards have

growth. The increase of traffic is a stage of acceleration and in Luanda, for

only withstand 600 000 vehicles.

for the economy, accessible and maximally useful to the user. The medium and long haul transport is characterized by the dominance of air transport, even though at excessively high prices. Another feature includes a very concentrated

SOURCE: Ministry of Transportation, Bureau of Study, Planning and Statistics,

Report on the Monitoring System of the Management Indicators of the Transports Sector, Luanda, 2012.

INVESTMENTS IN THE TRANSPORT INDUSTRY DURINGTHE ECONOMIC YEAR OF 2012

Air transport Road transport

Railways Shipping

General services

7.801.075.161,52

13.112.360.876,50

2.143.498.523,41

375.983.127,7121.413.498.523,41

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public road transport, with frequency and extent of destinations relatively

Ministerial Programme of Governance 2008-2012, conducted by the Ministry of

Public Collective Transport of Passenger throughout the country. This sub-

municipal and local levels, as shown in the following table.

DISTRIBUTION OF MIXED BUSES BY PROVINCE

Provinces Mixed busesBengo 10

Benguela 19

Bié 19

Cabinda 11

Cuando Cubango 13

Cunene 15

Huambo 19

Huíla 19

North Kwanza 11

South Kwanza 18

Luanda 0

North Luanda 19

South Luanda 10

Malanje 15

Moxico 15

Namibe 10

Uíge 19

Zaire 13

SOURCE: MINTRANS, Performance Evaluation of the Ministerial Governance Programme 2008-2012.

The action 2 mentioned above also includes the distribution of vehicles (wagons, vans, motorcycles), under the Programme of Support to the Development

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Local Trade in the Country, as shown in the following table.

DISTRIBUTION OF MOTORCYCLES, VANS AND COACHES BY PROVINCE

Provinces Motorcycles Vans Coaches

Bengo 90 12 12

Benguela 105 12 12

Bié 115 13 14

Cabinda 95 13 22

Cuando Cubango 60 10 11

Cunene 90 12 6

Huambo 90 13 14

Huíla 125 13 14

North Kwanza 100 13 13

South Kwanza 100 13 14

Luanda 0 0 0

North Luanda 70 12 13

South Luanda 70 10 11

Malanje 150 13 11

Moxico 80 10 12

Namibe 70 10 11

Uíge 120 14 14

Zaire 80 11 13

SOURCE: MINTRANS, Performance Evaluation of the Ministerial Governance Programme 2008-2012.

other equipment, the adjustment of routes and the overall improvement of the

increase from 2008 to 2010, except for a decrease in 2011 (see table and graph).

PASSENGERS TRANSPORTED BY THE TCUL AND ETP OF CABINDA

Business 2008 2009 2010 2011

TCUL 2.915.404 20.496.635 26.561.390 39.605.031

ETP Cabinda 41.430 199.624 252.000 172.241

SOURCE Report on the , Luanda, 2012.

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presented in the last two years a decrease in cargo and ETP Cabinda experienced an increasing trend in the volume of cargo (see table and graph).

CARGO IN TONS TRANSPORTED BY UNICARGAS AND ETP OF CABINDAUNICARGA ETP Cabinda

2008 2009 2010 2011 2008 2009 2010 2011

Cargo Transported (tons) 2.175.081 1.629.312 775.870 932.736 109 460 573 1.002

SOURCE Report on the Monitoring System of , Luanda, 2012.

PASSENGERS TRANSPORTED BY TCUL AND ETP CABINDA

0

10.000.000,0

20.000.000,0

30.000.000,0

40.000.000,0

2009 2010 2011



TCUL ETP Cabinda

2008

CARGO TRANSPORTED BY UNICARGAS AND ETP CABINDA

0

5.000.000,0

1.000.000,0

1.500.000,0

2.000.000,0

2.500.000,0

Unicargas ETP Cabinda

20112009 2011 20092008 2010 2008 2010

FSOURCE: Ministry of Transportation, Bureau of Study, Planning and Statistics,


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Angolan government points to the urgent need to reduce dependence through

passengers in each of the railways in Angola between 2008 and 2011.

PASSENGERS TRANSPORTED BY RAIL SECTOR

Civil 2008 2009 2010 2011

CFL Luanda 3.100.790 3.558.211 2.880.627 2.861.474

CFB Benguela 874.374 392.621 389.303 125.405

CFM Moçâmedes 141.734 96.058 21.865 0

Global Result 4.116.898 4.046.890 3.291.795 2.986.880


Considering each of the railroads individually, in the strategic plan of the CFL

2012.

PASSENGERS TRANSPORTED BY RAIL SECTOR

0

4.000.0000,0

2.000.0000,0

3.000.0000,0

3.500.0000,0

1.500.0000,0

1.000.0000,0

500.0000,0

2.500.0000,0

2008 2009 2010 2011

CFL LuandaCFB BenguelaCFM Moçâmedes



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EVOLUTION OF PASSENGERS AND CARGO TRANSPORTED BY CFL DURING THE YEAR OF 2012

Company Civil Year/Month No. Passengers Transported Cargo Transported (ton.)

CFL Luanda

01.2012 198.253 1.461

02.2012 147.480 2.398

03.2012 93.478 2.686

04.2012 17.102 1.565

05.2012 161.442 2.244

06.2012 118.096 3.632

07.2012 155.375 3.034

08.2012 113.169 2.917

09.2012 104.576 4.212

10.2012 121.922 7.562

11.2012 116.121 3.987

12.2012 106.648 8.950

Result 1.583.662 44.648


Compared with its business plan for 2012, there is a negative balance

containers of goods. Over the past year, the CFL transported 15,000 containers,

running from Cubal to Luena (inaugurated on August 30, 2011) and the reopening

year). The accession was satisfactory, taking into account the expectations of customers. Due to the elections, there was a decrease in the number of

passengers transported by CFB during the year 2012.

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EVOLUTION OF PASSENGERS AND CARGO TRANSPORTED BY CFB DURING THE YEAR OF 2012


CFBBenguela

01.2012 15.300 0

02.2012 14.768 2.250

03.2012 14.136 322

04.2012 11.443 1.042

05.2012 15.644 0

06.2012 13.666 0

07.2012 8.124 444

08.2012 990 1.939

09.2012 9.031 0

10.2012 16.347 280

11.2012 19.297 360

12.2012 21.600 291

Result 160.346 6.928


the CFM, there are no records of transport of people and goods. The number

during the experimental stage.

EVOLUTION OF PASSENGERS AND CARGO TRANSPORTED BY CFM DURING THE YEAR OF 2012


CFMMoçâmedes

01.2012 0 0

02.2012 0 0

03.2012 0 0

04.2012 0 0

05.2012 0 0

06.2012 0 0

07.2012 0 0

08.2012 0 0

09.2012 0 0

10.2012 0 0

11.2012 20 630

12.2012 184 450

Result 204 1.080


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loads and most of the cargo handled is long haul. In the year 2009, the Port of Luanda moved about 9 million tons of cargo, plus 2 million tons in 2008,

(Port of Luanda EP, 2009)111

handled 2.7 million tons in 2011 compared with 2.3 million in 2010. During the

translates the cargo handled by ports.

CARGO HANDLED BY PORTS (TONS)

Ports 2008 2009 2010 2011Cabinda 396.821 350.893 436.270 490.704

Soyo 32.065 44.813 246.414 74.878

Luanda 6.993.285 9.022.912 9.157.534 7.308.046

Lobito 2.115.744 2.462.084 2.396.427 96.666

Namibe 703.125 770.175 696.960 913.755

Amboim 47.813 111.709 130.444 70.495

Total 10.288.853 12.762.586 13.064.049 8.954544


It is important to note that the growth rates are subject to substantial fluctuations, since the internal social-economic dynamics are strongly

structural effects, altering pre-existing balances, originate new operating

is subject to the dynamics of Angola’s two main ports, since the country imports a very high percentage of goods that circulate internally. Thus, the highly

one, it is peremptory to rethink strategically the role of transport in the working

111 In the last decade the growth of cargo handled at ports has been relatively high

dedicated almost exclusively to imports.

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approved a new Strategic Plan for Transport (PET), which will run from 2011 to

The dynamics and complexity associated with the transport sector are very

social reconstruction. Those who use more and better transport have more

Although the primary function of transport consist of the immediate

progress and favours growth as a sector provider of services at lower costs and/

with the economy (is pro-cyclical), as such, as transport are a demand for services

From the analysis of Angola’s economic reality between 2002 and 2012,

on economic growth in Angola has happened in various ways:

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1. 112

investments in infrastructure have allowed the transfer of purchasing

within and between provinces.

2.costs, and thus prices, and increased the volume of sales (because it

provincial and interprovincial level. This improved performance of the transport system has placed in contact or approximate what once was separate or distant.

3.materials, capital goods and physical investment.

4.the possibility to start the export process.

5. Through the improvement of transport infrastructure that has encouraged

sector.

6.the economy in general.

In the positive relationship between the transport system and economic

sector is winner and loser producing regions and economic agents with uncertain results or of ambiguous signal.

112 However, it is important to retain that investments in major infrastructures have a primary effect on the side of demand (during construction) and only later on the supply. However, it is precisely the effects on the supply that are most important, as they are permanent and potentially cumulative. Furthermore, short-term investments in transport infrastructure involve particularly the costs of construction, while the positive results and the externalities arise only in the long term, when the reduction of transportation costs and the new infrastructure provide an increase in trade at national and international level.

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It is possible to argue that the multiplier effects of improved mobility of people and goods are not being maximized, when the reality of the Angolan economy does not translate well in terms of better accessibility. Good

for companies, favouring in this way the areas where it exists. In this respect,

to play an important role in the improvement of productivity. Finally, an improvement in accessibility contributes towards the convergence between the

transport services. Although they constitute an essential element and with

provision of transport services, there is a social stratification with increased

workers of the sector’s entrepreneurs. In particular, this could lead to the development of a transport system financially inaccessible (with high tariffs used), dangerous due to less care about the state of maintenance of vehicles

of prevalence of public interests in relation to private interests. In relation to the tariff applied in the provision of transport services, for example, we

component of the transport sector113.

113 However, it is important to consider that the choice of this prevalence of social character

the public entity has to compensate private operator deprived of this service, otherwise they would not be interested in ensuring it.

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and convenience to motorists, allowing people to have the opportunity to take advantage of higher yield levels and the possibility of new and better opportunities of employment, on the other hand it causes the increase in transport costs, because it increases fuel consumption, financial resources, congestion, risk of accidents and have environmental impacts. The benefits in areas other than the Luanda metropolitan area are associated with more efficient travel without trans-shipment, performed by motorists. The cost increases are supported by car owners and also throughout society, i.e., those costs are dispersed by whole economy. Some individuals believe that the reliance on cars always increases as consumers become wealthier. But for Litman (1999) this is not necessarily true, because many wealthier regions have a balanced transport system, while some poorer regions are more dependent on the automobile.

It should also be noted that due to the growth of the transport sector it is

sharing resources by enterprises, and the establishment of social networks that

of all agents becomes greater, the result of easier contact, but also the supply of industrial services becomes greater. Also to be highlighted that there is a greater diffusion of technical and practical knowledge, enabled by proximity and by the bond of trust that allows proximity to be established. These network

they would not get. These highly relevant issues should be considered so that, once again, it is possible to maximize the multiplier effects in the Angolan economy of the growing development of the transport sector.

positive currents of the relationship possible to identify between improving transport and encouraging tourism. Not only is it important for the development of many outlying areas, but also to sustain the current economic growth and development.

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3.3.6.3 Transport Sector policies

The increasing economic development that has been recorded in the country,

114. There are several trade agreements between

The same way that any society goes from more incipient structures to more

transport policy in Angola:

1. Efficiency, minimizing the resource used, the energy and all emissions involved, including upstream and downstream.

2.adding welfare to the economy and discouraging private transport, in order to reduce the central externality in the problem of the transport system –

3.

– Cost.

– Purchasing power (avoiding white elephants). – Inter-generational

114

prices of major products and goods registered in countries such as Malawi, Rwanda and Uganda, with variations ranging between 50% and 75%. Shipping a car imported from

about $ 5000 dollars.

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– In terms of foreign trade, whether in the predictable balances of

content of exports and the type and importance of tourism.

4.

of reducing the externality, which is a human disaster, of mortality and

5.

6.

7.regional policy and planning.

8. Subsidiarity at decision level, centralizing what wins in joining partial interests in the decision and decentralizing/returning what wins in proximity with the market and partners involved.

Ironically, despite the increasing importance of the transport system and all

the 115, the freight being borne by individual entrepreneurs producers

services, involving small amounts of investment, which have a narrow geograph 116. It is recommended to collect data

115 Kupapatas designate the taxi service provided by a motorcycle. Economic agents

unfair competition for the companies legally established in the sector.116 See Schwartz, Hahn, and Bannon (2004).

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transport system in the Angolan economy, that is going through a major phase of

accounts and planning.

themselves, pursuing an identical ultimate goal: to meet demand, in terms

of economic multipliers. Depending on the purpose, each subsystem should articulate in the space in alternative or complement to other subsystems. This type of structuring of transport leads to the search for productivity improvements. For the same distance, a subsystem may at a later stage be economically overtaken by another, depending on the changing in the technical level of each. Motorized transport, for example, because they present more flexibility in routes (transport door to door) and schedules, adapted to local

has negative implications. It is important to create faster alternative for the

in the morning to travel, especially in the capital city, to their workplace. There

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community policy makers. The widespread access to personal vehicles appears to

the personal car has latent has the possibility of any of them being forced out of

of the capital, where all means of collective passenger of road, railway and

trade, gaining market share to private transport. It is recommended that these

Brigades of local governments, as well as micro businesses with local technical

between provincial capitals and municipal seats. To this end, surveys were carried out on the roads to be intervened under this new plan, which embodied

2013/2014 .

3.4 The External Sector

As a direct consequence of the weight of the oil sector in the national

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PERIODS

Balances of the Balance of Payments (million USD)

Global Balance of Trade

Capital Balance Million USD months

2010 6010,3 33928,0 986,8 17326,6 6,6

2011 8598,5 45859,1 2582,3 26084,2 7,6

2012 6457,3 40541,5 1297,9 33711,1 8,6

SOURCE: Ministry of Finance, State Budget Rationale Report 2013

Another variable signaling the degree of macroeconomic stability is the

2012. The average growth rate of the exports of oil between 2002 and 2012 was

levels of exports only recovered from 2011.

DIFFERENCES BETWEEN THE EXCHANGE RATEOF THE PARALLEL AND THE REFERENCE

0

8642

1012141618

2002 4 6 8 2010 123 5 7 9 11

Valu

es in

per

cent

age

SOURCE: National Bank of Angola.

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2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

30000

60000

80000

20000

50000

10000

40000

70000

Total exports of goods (million USD)Oil exports (million USD)

DEPENDENCE OF TOTAL EXPORTS ON OIL EXPORTS

2012

SOURCE: International Monetary Fund, Angola Staff Report for the 2012 Article IV Consultation and Post Program Monitoring, October 2012.

2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

500

1000

1500

OTHER EXPORTS (MILLION USD)

2012


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Regarding imports of goods, their value was 22.6 billion dollars in 2012. Direct imports for the oil sector were over 5 billion dollars in 2012.

The balance of the Balance of Trade continued to patent a very positive


2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-15000

-10000

-5000

5000

0

Oil income payments (million USD)Expatriate salaries (million USD) Foreign direct investment (USD million)

2012

BALANCE OF FACTORIAL INCOME


2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-30000

0

30000

60000

-10000

20000

50000

-20000

10000

40000

Total imports (million USD)Imports p/oil sector (million USD)Other imports (million USD)Trade balance (million USD)

2012

TRADE BALANCE

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At the level of factoral income, the balance of its respective account has

of Payments. In 2008, it was paid, by way of oil revenues, over 13.4 billion, as

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4. THE STRUCTURAL ECONOMIC TRANSFORMATIONS IN ANGOLA AND IN SUB-SAHARAN AFRICA (SAMPLES FROM 17 COUNTRIES)

4.1 Preliminary remarks

Especially when it is an analysis of economies with a high intensity of GDP growth over a period of ten years. Is the economic growth factor sufficient for the

The way in which the growth is done, that is to say the growth model. Growth that is self-centred in natural resources facing exports cannot give

The economic policies used to promote economic growth. The more passive

The nature and status of human capital. Structural changes can be demanding

income.

The most widely used indicator is labour productivity, its evolution and its

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117 was one of

factor: technological knowledge, which in his approach is generally termed as

118. As such, all changes in

changes, or warrant that the same had occurred in cases where the empirical

did not cause an increase of output.

oil Sub-Saharan countries points towards small percentage changes in the

of these economies. However, in general terms – as evidenced by studies of

Employment is usually another key variable to analyze the process of

when you increase the labour force, capital resources must grow at the same

living standards. Progress occurs when the workforce migrates from primary

Colin Clark, an English economist and pioneer in the treatment of economic raw

117

118 Solow also designated the total productivity of the factors as “a measure of our ignorance” or “the unexplained part of growth 119.

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growth. For the sectors upstream to release labour without diminishing, in the

are needed.

In this type of accounting, the agriculture sector is often the key sector:

skilled labour from primary sectors to others, was studied by Arthur Lewis. It was in 1955 that Sir W. Arthur Lewis understood what later came to be called bissectorials models of economic growth. Based on this was model was the

reducing the total amount of the output produced, even when the input of other 119

of economies is understandable, therefore: how does surplus agricultural

120

what pace must the agriculture grow121 so as not to impede the development of 122

In Sub-Saharan Africa, a non-uniform motion of transformation of the agricultural sector has been observed: in the oil countries, increments in the

119 Ghatak, Subrata – Introduction to Development Economics, 4th edition, Routledge, 2003.120 Lewis recovers David Ricardo’s thinking regarding the Law of Diminishing Marginal

underemployed or covertly used without intervention in the process of wealth creation. Hence the need for their transfer to the industry.121 If the process of structural changes follows the correct route – decreased relative weight of GVA and employment in agriculture – then productivity gains from agriculture must be increased. For a GDP growth rate of 7% per year, an annual growth rate of 12%

increase by about 14.4% per year.122 Perkins, Dwight et all – Economics of Development, 3rd edition, Editions De Boeck, 2006.

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of their economies. In African countries south of the Sahara desert, considered

lack of consequent land irrigation schemes, shortages of fertilizers, reduced

transport, roads and drainage)123.

employment economy and about one fifth of GDP, an average yield of 0.5 monetary units per worker, very low compared to other regions, such as Southeast Asia.

Empirical evidence from other non-African regions suggest that the rapid

efficiency in other sectors. These evidences also suggest the occurrence of

labour for the rest of the economy. Increased agricultural productivity is a 124.

SSA economies are 45 – now with a new country, South Sudan – and among them, only 16 are larger, using a criteria of broad economic dimension: an annual

some African leaders and entrepreneurs).

123

2012.124

process can be contradictory, mid-term, with the intentions to improve the distribution of income and job creation. As seen, one of the vectors of the strategic importance of agriculture in these profound adjustment processes to the productive structures is the decrease in employment and the increment of productivity. If the urban sectors fail to

-Saharan economies are 45 – already with the new country, South Sudan – and among them, the largest are only 16, using a wide criteria of economic dimension: a gross annual national income above 5 billion dollars (equal to some of the larger fortunes of some African rulers and businessmen.

| 155


The differences between the countries in the sample are sharp, with, between South Africa and Rwanda, a difference of 55.4 times in their Gross

with a higher quality of sustainability in the economies with a larger dimension. But there are exceptions: small countries, according to the criteria of Gross National Income, presented between 1985 and 2010, interesting signs of a process of structural changes, explained by the quality of macroeconomic adjustments, a wider opening of the economy to the exterior, and by an improved average qualification of human resources (incidentally, a factor that many studies of the World Bank, IMF, OECD, UNCTAD, the Economist Intelligence Unit and other sources elect as one of those responsible for these

The idea for this research stemmed from the fact that Africa in general and Sub-Saharan Africa in particular have presented very interesting records of

0

150

350

THE 16 LARGEST ECONOMIES OF SUB-SAHARAN AFRICA(GROSS NATIONAL INCOME, ONE BILLION DOLLARS, ATLAS METHOD)

250

50

100

300

200

2007 2008 2009 2010

SOURCE: World Bank, World Development Indicators.

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

st

Tanz

ania

Bots

wan

a

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

s

Cong

o

Tcha

d

Rwan

da

156 |

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infrastructure provided decisive levers of change that have occurred, especially

However, there are items where African delays are evident and that can

in three regions. It appears that having started with perfectly equivalent levels

the index base. According to studies on this subject, in this part of the African

sector remained very low in the last three decades125, indicating that few

the subsequent decades126.

and to what extent the high growth rates of Sub-Saharan Africa engendered or facilitated the occurrence of structural changes in the economies of the region. As we will see, since 2004 this part of the continent has scheduled relevant

annual rate of change between that year and 2008. Even if you include the crisis 127.

According to World Bank recordsl128, the average up to 2011 should be

125

2012.126 However, this average masks the African reality. Indeed, in many countries the evolution of the labour productivity annual average in agriculture was negative, while in countries where GDP per capita grew to high rates, agricultural productivity was highly positive, suggesting the existence of a correlation between these two economic variables.127

2012.128 World Bank – Global Economic Prospects, January 2013.

| 157


Angola is studied in contrast with some Sub-Saharan economies to assess the

recent years. It is good to note that Angola only 10 years ago ceased to be a country in civil war – which destroyed economic and social infrastructure, and debased the personality of most people, unbalanced mental and reasoning schemes, and promoted inequality and easy and illicit enrichment – and such

more inclusive and extensive. Obviously there are not economies that are not

to region and from country to country.

4.2 Structural changes in Sub-Saharan Africa

4.2.1 Macroeconomics of the sample countries

The 17 Sub-Saharan countries included in the sample selected for this study

Africa.

GROSS NATIONAL INCOME OF THE SAMPLE COUNTRIES (billions of dollars, the World Bank Atlas method)

COUNTRIES 2007 2008 2009 2010

South Africa 274,0 283,4 284,3 304,6

Nigeria 137,1 176,9 184,7 186,4

Angola 43,6 62,5 69,4 75,2

Kenya 25,6 28,3 30,3 31,8

Cameroon 19,5 22,0 23,2 23,2

Ivory Coast 17,5 20,2 22,5 23,0

Tanzania 16,3 18,7 21,4 23,4

Botswana 10,9 12,6 12,2 13,6

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Zambia 9,5 12,0 12,5 13,8

Gabon 7,1 10,2 10,9 11,7

DRC 6,9 9,7 10,6 12,0

Namibia 19,5 8,8 9,3 10,3

8,6 8,7 9,2 9,9

Congo 7,1 6,4 7,7 8,7

Tchad 5,8 5,9 6,7 6,9

Rwanda 5,8 4,3 4,9 5,5

Mozambique 8,8 9,4 10,0 10,3

SOURCE: World B

economies was more than 760 billion dollars, an average per capita of just over

South Africa, Nigeria and Angola (in this order) are the largest economies in this group of seventeen, with a combined value of over 566 billion dollars

countries are vast. The ability to create annual wealth varies between one for

structured in the manufacturing sector (weight, range of sectors, products and

0

5000,0

9000,0

GROSS NATIONAL INCOME PER CAPITA (DOLLARS)

7000,0

3000,04000,0

8000,0

6000,0

2000,01000,0

Sout

h Af

rica

Nige

riaAn

gola

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ri�us

Cong

oTc

had

Rwan

daM

ozam

biqu

eTO

TAL

SOURCE: CEIC, Stategic Position of Angola in Africa, based on World Development Indicators.

2007 2008 2009 2010

| 159


In the chart above it can be seen that the heterogeneity, in the economic attribute of average income per capita, is among the most sanding-out

to implement structural changes essential to industrialization and increased

In terms of macroeconomic stability – one of the traits of African successes

MACROECONOMIC FUNDAMENTALS OF THE COUNTRIES OF THE SAMPLE

INFLATION FISCAL BALANCE (%) PUBLIC DEBT (% PIB) BTC (% GDP)2004 2010 2004 2010 2004 2010 2004 2010

South Africa 1,4 4,3 –1,2 –4,8 35,9 35,3 –3 –2,8

Nigeria 15,0 13,7 8,1 –6,7 52,7 15,5 5,7 5,9

Angola 43,6 14,5 1,4 5,5 54,1 37,6 3,8 9

Kenya 11,8 4,1 –0,1 –5,1 55 49,9 0,1 –6,5

Cameroon 0,3 1,3 –0,7 –1,1 61,6 12,1 –3,4 –3

Ivory Coast 1,5 1,4 –1,7 –2,3 84,9 66,4 1,6 1,1

Tanzania 4,1 7,2 –3,7 –6,5 63,3 42,7 –2,3 –9,3

Botswana 7 6,9 1,2 –6,8 9,7 17,6 3,5 –2

Zambia 18,0 8,5 –2,9 –3,1 148,6 25,8 –10,4 7,1

Gabon 0,4 1,4 7,6 3 65,2 25 11,2 9,1

DRC 4 23,5 –3,2 4,9 196 35,1 –3 –8,1

Namibia 4,1 4,5 –3,4 –4,6 27,5 15,7 7 0,3

4,7 2,9 –4,6 –3,2 51,6 50,6 –1,8 –8,2

Congo 3,7 5 3,6 16,1 198,7 23,9 –5,7 5,1

Tchad 4,8 –2,1 –2,7 –5,2 34,2 25,8 –17,1 –3,5

Rwanda 12 2,3 0,9 0,4 90,8 23,2 1,8 –5,9

Mozambique 12,6 12,7 –4,4 –3,9 70,7 41,1 –10,7 –11,7

SSA 7,4 7,5 0,3 –3,7 54,9 31,5 –1,5 –1,3

SOURCE: International Monetary Fund – Regional Economic Outlook, Sub-Saharan Africa, October 2012.

meaning, in effect, relevant gains in the management capacity of the governments of the countries in the sample, to contain within the recommended and internationally accepted limits the main macroeconomic aggregates. Therefore, this is not why private investment does not seek African countries. The

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countries. Further on – paragraph 4.2.3 – it can be seen that the agricultural labour has been based on a limit to private investments in this sector, because of their low values.

129

Nigeria, Angola, Zambia and Rwanda were the countries with the greatest loss of competitiveness in the reporting period, especially Angola, with an

Mozambique, Tanzania and Cameroon.

As emphasized, the agriculture and the industry are the key structural

these sectors in the structural changes required by the opening of economies and

4.2.2 Industry

Industrialization is a process through which, over time, increments the aggregated value of the economy, by means of processing of natural resources.

129 An increase indicates an appreciation of the real value of the national currency, comparable internationally, which penalizes exports, a variable that is crucial for greater participation in international trade.

REER VARIATION BETWEEN 2004 AND 2010 (%)

-20,0-10,0

010,020,030,040,050,060,070,080,0

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

s

Cong

o

Tcha

dRw

anda

Moz

ambi

que

SSA

SOURCE: International Monetary Fund, Regional Economic Outlook, Sub-Saharan Africa, October 2012.

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Economic growth is closely associated with the ability to generate value

exports. This is how self-sustainability has been ensured and dependence on more developed economies has been reduced.

Since the 6th

in modern economies, generating employment, multiplying income and able to improve living standards. The increase of the internal added value through

new countries.

After, apparently, the most delicate of the international financial and economic crisis of 2008/2009 has passed, and despite a surprisingly good resilience of many African economies to its efeitos130 the African continent,

of trade of their economies, due to the excessive weight of products with low added valued. For many years, African leaders were convinced that the best way

131.

However, during the 7th decade of last century, with successive oil shocks and the swell of the debt, the limits began to emerge of this type of model to

of the desirable outcomes of macroeconomic compression of aggregate demand,

130 Revealed by several indicators: FDI went from 38.4 billion dollars in 2008 to 37.1 billion dollars (a slight reduction), which contributed to the GDP growth rate decreasing less than in other countries, and the variation pace of GDP growth was 4.3% between 2000 and 2009 – 2.8% in 2009 – with a quick recovery in 2010 (5%) and 2011 (4.5%) (World Bank, Global Economic Prospects, January 2013).131

factor of economic growth and many studies conclude that protection – tariff and non-

emerging industry” has its supporters, but within the conditions and validation tests that

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In more recent years, African countries expressed, through suitable policies

of the broader agenda to diversify their economies. The general political

improvement of growth with sustainability.

New Partnership for Africa’s Development (NEPAD) adopted by African leaders

were subsequently endorsed by African Ministers at the 2008 Conference of African Ministers of Industry (CAMI) .1 At the 2011 CAMI organized by the African

of AIDA and how to Achieve sustainable industrial development in Africa.

12:58 in 2009.2 In Developing Countries in Asia, it fell from 12:32 to 00:26 and for 132.

Recent research suggests that the process of economic growth is very tributary of permanent and systematic structural tax reform and presents a common standard in terms of productivity: the passage of low-productive

the nuclear issue of industrialization, diversification and structural change. All cases of sustained and rapid growth have, as a common denominator, a structured industry sector with high added value.

The industry, in its broadest sense, is composed of mineral extraction, construction and transformation. In a more restricted approach – the one

132

| 163


materials, substances or components transformed are raw materials that are

133.

The manufacturing sector has a crucial role in the structural and economic development, which is evidenced by the following facts:

and by the processing industry.

This density in the economic relationship provides the manufacturing industry with a central role in creating jobs, increasing investment, increasing the output. This ability to create jobs is directly related to increasing returns to scale, unlike what happens in agriculture, where the law of diminishing marginal returns lowers the capacity to generate

According to Engel’s law, as the per capita income increases, the share of expenditure on agricultural goods in household budgets decreased, while

to the political statements about the urgency of development in Africa and positive records in some countries on their growth, manufacturing still has a

133

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CEIC / UCAN

CONTRIBUTION OF THE MANUFACTURING INDUSTRY TO GDP 1979-2008 (% GDP)

SPACES SECTORS 1970 1980 1990 2000 2005 2008

WORLD

INDUSTRY 36,9 38,1 33,3 29,1 28,8 30,1

MANUFACTURING 26.7 24.4 21.7 19.2 17.8 18.1

MINERAL 3,9 7,1 5,2 4,5 5,5 6,2

DEVELOPED ECONOMIES

INDUSTRY 27,3 41,1 36,8 36,3 38,9 40,2

MANUFACTURING 17,6 20,2 22,4 22,6 23,3 23,7

MINERAL 5,7 14,7 8,9 8,3 10,1 10,9

DEVELOPING AFRICAN ECONOMIES

INDUSTRY 13,1 35,6 35,2 35,5 38,8 40,7

MANUFACTURING 6,3 11,9 15,3 12,8 11,6 10,5

MINERAL 4,9 19,3 15,2 18,4 23,0 25,8

EAST AFRICA

INDUSTRY 3,1 7,8 20,6 18,6 20,6 20,3

MANUFACTURING 1,7 4,9 13,4 10,4 10,3 9,7

MINERAL 0,8 1,5 3,3 3,1 3,6 3,7

CENTRAL AFRICA

INDUSTRY 34,2 38,4 34,1 50,4 57,9 59,8

MANUFACTURING 10,3 11,8 11,2 8,2 7,3 6,4

MINERAL 19,1 21,2 18,9 39,3 47,9 50,5

NORTHERN AFRICA

INDUSTRY 34,2 50,0 37,4 37,8 45,0 46,0

MANUFACTURING 13,6 9,7 13,4 12,8 11,3 10,7

MINERAL 15,7 33,0 17,2 19,5 28,2 29,8

SOUTHERN AFRICA

INDUSTRY 38,2 48,2 40,6 32,7 31,7 34,5

MANUFACTURING 22,0 20,9 22,9 18,4 17,9 18,2

MINERAL 12,0 24,0 14,3 11,7 11,2 13,1

WEST AFRICA

INDUSTRY 26,7 43,3 34,5 39,8 36,7 37,4

MANUFACTURING 13,3 16,8 13,1 7,8 6,0 5,0

MINERAL 7,7 21,3 18,8 29,3 27,7 29,6

SOURCE: UNCTAD/UNIDO.

industry to create wealth after 1990 is transversal to all African sub-regions considered in the previous table. In East Africa the relative weight of the

Not surprisingly, therefore, that the internationalization of the African

Added Value – is characterized by very low values and even dynamics. This

| 165


high economic rates growth134. Similar figures have been registered for the

135.

The pace of annual growth of African exports has been characterized by

African exports south of the Sahara was 2004/2008, during which the average

136.

The weakness of the African manufacturing industry is also observable within

134 “In Developing Asia, it rose from 13 per cent to 25 per cent and in developing countries

135 In contrast, in low-income countries and middle-income East Asia, their participation in international trade of manufactured goods increased from 9.5% in 2000 to 16% in 2008.136

INVESTMENT EVOLUTION IN SUB-SAHARAN AFRICA

0

5

10

20

25

15

Gross investment/GDP Investment ra�o trend

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1991

-200

0

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CEIC / UCAN

STRUCTURE OF AFRICAN MANUFACTURING (W/ NORTHERN COUNTRIES)

Structure of African manufacturing

industry (%)Growth rate

(%)

of African

manufacturing (%)

2000 2009 2000 2009

Food/beverage 20,0 16,6 1,1 2,4 1,9

Tobacco 3,0 2,6 1,6 3,4 2,5

Wood and wood products 2,8 1,8 –1,9 1,7 1,5

Paper 3,1 3,0 2,9 1,3 1,5

5,9 6,1 3,6 2,0 2,1

2,7 2,9 4,1 1,0 1,1

Non-metallic mineral glass 6,8 10,1 7,9 2,2 3,3

Basic metals 7,3 5,6 0,4 1,7 1,0

Manufacture based on Resources 51,6 48,8 2,6 2,0 1,8

6,8 4,7 –0,9 3,1 2,3

4,7 4,3 2,3 3,0 3,3

Footware and leather 1,5 1,2 0,8 2,7 2,3

2,9 2,7 2,7 0,8 1,0

Metal products 5,2 5,1 3,0 1,1 1,3

Furniture and other IT 1,8 1,8 3,2 0,7 0,7

Low technology industry 22,9 19,9 1,6 1,5 1,5

Chemicals 12,4 19,2 8,4 1,6 2,2

Machinery and equipments 3,7 3,6 2,9 0,6 0,6

0,3 0,3 3,9 0,1 0,1

Electrical machines 2,0 2,5 5,9 0,6 0,6

0,9 0,8 2,0 0,1 0,0

0,3 0,3 3,0 0,1 0,1

Engines 4,9 3,8 0,4 0,9 0,7

Transport equipment 1,0 0,9 1,8 0,5 0,4

High / med. tech. manufacturing 25,5 31,4 5,7 0,6 0,6

MANUFACTURING INDUSTRY 100,0 100,0 3,2 1,2 1,1

SOURCE: UNCTAD/UNIDO.

categories, depending on their complexity and technological intensity, and it shows that it is in the class of goods with simpler processing and related to natural resources that SSA bases its industrial structure. Despite the decline in its relative share in the manufacturing industry, the industries of direct

| 167


137.

An interesting sign should, however, of structural change related to the

of GDP in the manufacturing industry, with emphasis on the chemical industries, with an increase of nearly 7 percentage points equivalent to a growth rate of

The average annual rate of growth in manufacturing in Africa, during the

138.

Other notes provided by the table above are also relevant:

processes, one would expect that the classes of products with low technologic coefficient and high technological intensity of skilled labour (such as

goods showed no signs of any changes, and their relative share in the

consistent, permanent and sustainable process of structural changes139.

137 Annual Economic Report 2011 – CEIC / UCAN.138

139 Despite occasional positive records in some African countries, the American initiative

extensity to a greater number of African countries.

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CEIC / UCAN

changes during the period in reference for the same value occurred in 2000140.

of the informal sector, although not expressed in the above table. Informal

141. Furthermore, its dynamic growth has been higher than the formal manufacturing sector. For the period 1998/2002, the growth rate of GDP transforming the informal sector has

142.

The existence of sectors of informal industrial processing is an important

have characteristics inconsistent with the profound changes in the production

or almost-handmade craft, without incorporating technology, with low quality

and low correlation relationship with formal companies143. In such contexts,

to define the correct interventions, designed to accelerate the structural transformation of the industrial system – and the low density of inter-firms

There are several reasons for the appearance of informal sectors144:

They provide livelihood and systems of economic survival and social solidarity. Most African countries do not have systems of welfare and social security, the informal working as a cushion in case of illness, poverty and social exclusion.

The informal sectors tend to have a large dimension, whenever the formal markets present themselves filled with demands, bureaucracies

140

141

Development Policy Review. 22 (6): 701-715.142

143

16821.144 National Bank of Angola / CEIC / UCAN: A study of the informal sector in the province

| 169


labour market holds a huge capacity to create / destruct employment (the

These are the areas of refuge for migrants from the agricultural sector, and

caused by civil war during 27 years.

the performance of the manufacturing sector – such as gross added value per capita (which expresses in value to the amount of manufactured goods consumed and exported), its annual average rate of change and the breakdown of VAT in groups of products of high technology, low technology and natural resources –

An important note relates to the low rate of rentability of the capital in the

of the agricultural sector145 146

It is a fact that investments have increased in Sub-Saharan Africa and throughout Africa, but its focus has been the preferred areas of exploitation of natural resources (renewable and non-renewable) where the internal aggregate value is minimum147.

145 See in the introductory chapter the comparison chart of agricultural productivity in Africa and Asia.146

147 Exports of oil, other commodities and agricultural raw materials will feed the transformation systems of developed countries and some emerging markets, such as China, India and Brazil.

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CEIC / UCAN

facilitation – loans and donations – of public investments of the different

Angola can be considered, in this respect, a paradigmatic case, the State having invested in upgrading the physical, economic and social infrastructure, over 47 billion dollars between 2002 and 2011148.

MANUFACTURING INDUSTRY – GROSS ADDED VALUE (VAT)VAT per capita (dollars) Growth rate Percentage breakdown of VAT 2009

1990 2010 1990/2010 BR LT MHTSouth Africa 551 581 0,3 52 17 31

Nigeria 15 24 2,4 26 53 21Angola 26 66 4,8 46 41 12Kenya 49 47 -0,3 68 19 13

Cameroon 126 148 0,8 75 24 2Ivory Coast 112 99 -0,6 70 13 17

Tanzania 19 29 2,2 68 6 26Botswana 124 171 1,6

Zambia 36 44 1,1 74 11 15Gabon 163 200 1,0 76 16 8

DRC 16 5 -5,7Namibia 92 348 6,9

522 801 2,2 35 48 16Congo 62 83 1,5 81 6 13Tchad 22 15 -1,8

Rwanda 56 17 -5,9Mozambique 15 52 6,2

SOURCE: UNCTAD, Africa Report, 2011.

NOTAS:

148

Projects: Fortifying the Barriers Against Corruption, Working Paper, December 2012.

INVESTMENT EVOLUTION IN SUB-SAHARAN AFRICA

0

5

10

20

25

15

Gross investment/GDP Investment ra�o trend

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1991

-200

0

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between 3 0000 and 4 000 dollars in the developed and industrialized countries. As per the analysis of the previous frame, which contains the 16 largest economies in

2010 the VAT per capita in the best country did not reach one thousand dólares149.

follows it can be concluded that:

between 1990 and 2010: Kenya, Ivory Coast, DRC, Chad and Rwanda.

dollars per inhabitant, then among the countries of the sample only four in

149 countries for which data is available had MVA per capita of at least $200, and in 2010 there were only 9 countries with an MVA per capita of at least $200. In terms of manufacturing growth, 23 African countries had negative MVA per capita growth over the period 1990-2010 and 5 countries had an MVA per capita growth above 4 per cent. “

CASES OF ACCENTUATED LOSS OF DYNAMICS IN INDUSTRIAL TRANSFORMATIONBETWEEN 1990 AND 2010

-5,9

-1,8

-0,6

Ivory CoastKenya DRC Chad Rwanda

-0,3

-5,7

COUNTRIES WITH THE HIGHEST VAT PER CAPITA (USD)

South Africa Gabon Namibia0

800

1000

600

400

200

1990 2010

Mauritius

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The above sample containing interesting countries with a dynamic

The less industrialized countries (VAT per capita <$ 200) are: Angola, Nigeria, Cameroon, Kenya, Ivory Coast, Tanzania, Botswana, Zambia, DRC

Congo, Chad, Mozambique and Rwanda. That is, among the 17 countries sample with GNI above 5 billion, 13-sectors have presented rudimentary

(the so called Resource Based Manufacturing).

was incorporated in 2010 by industries of medium and high technology).

Tanzania shows encouraging signs towards an increased use of medium and high technologies in industrial processing.

Nigeria can be a particular case of industrialization centered in slight technologies, probably linked to the oil sector.

VARIATION RATE OF VAT PER CAPITA

COUNTRIES WITH LESS THAN 200 USD PER CAPITA OF VAT IN 2010

6647

148

99

29

171

44

5

83

15 17

52

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

st

Tanz

ania

Bots

wan

a

Zam

bia

DRC

Cong

o

Tcha

d

Rwan

daM

ozam

biqu

e

2,4

4,8

6,9

2,2

6,2Ni

geria

Ang

ola

Nam

ibia

Mau

ritiu

s

Moz

ambi

que

| 173


4.2.3 Agriculture

The agricultural sector in Sub-Saharan Africa remains the largest employer in

Some scholars of the African agricultural economy argue that recent data shows that internal structural changes, including greater political stability,

annum150

invest in sectors which increase the productivity of investment, such as the

Nevertheless, one aspect common to sub-Saharan countries is the low

last three decades, Sub-Saharan Africa presented a very slow average growth in

during this period. When comparing the productivity of agricultural labour with the averages of Southeast Asia – a good benchmark for Africa – there are

index in that geographal space was 220, while in the SSA was less than 100. It is

was 100 for SSA, South Asia and Southeast Asia in 2011, and the discordance is

standards of living and structural economic change.

150

AVERAGE PRODUCTIVITY OF LABOUR IN AGRICULTURE (INDEX)

1985 1987 1989 1991 1995 1999 2003 2007 20110

100

50

150

200

250

1993 1997 2001 2005 2009

Southeast Asia Southern Asia Sub-Saharan

Inde

x of

pro

duct

ivity


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CEIC / UCAN

STRUCTURAL TRANSFORMATIONS IN THE AGRICULTURE OF THE 17 SUB-SAHARAN COUNTRIES OF THE SAMPLE, 1995-2010

Countries GDP real growth rate per capita

Real growth rate of labour gross percentage

of weight of agriculture in GDP

Growth rate of agricultural labour

South Africa 1,58 0,80 –1,16 7,10 (2000/2009)

Nigeria 2,72 2,70 –0,41 2,30

Angola 6,04 6,11 –2,07 4,50

Kenya 0,80 0,83 –1,70 1,10

Cameroon 1,46 0,85 –0,14 –1,60 (1995/2007)

Ivory Coast –0,23 -0,51 0,68 1,90

Tanzania 3,20 3,10 –2,07 2,90 (2000/2009)

Botswana 3,49 2,32 –3,56 2,20 (2001/2010)

Zambia 2,08 2,28 –2,66 4,70 (1998/2010)

Gabon –0,59 –1,12 –1,65 2,70

DRC –0,82 –0,98 –2,85 –2,00

Namibia 2,02 0,52 –2,83 0,50

3,46 2,98 –3,34 1,20 (1995/2009)

Congo 1,21 0,66 –0,90 3,00

Tchad 3,63 3,60 0,31 0,80

Rwanda 3,77 3,19 –0,94 3,40 (1996/2005)

Mozambique 4,83 4,75 –2,45 4,10 (2003/2009)

SOURCE:

In general, the signs of structural changes in Sub-Saharan Africa are not very

Some of hardships weighing on the African agricultural sector – highlighted in previous paragraphs – are common to most countries and act to block the

| 175


However, in Angola and according to a World Bank report, there is the

genuine priority of the Government. The Government seems to please large agriculture projects. It is a myth to say that Angola has a great agricultural potential because actually Angola’s land is of poor quality and needs a lot of investments to grow crops. The lack of adequate farming skills is a major

particularly those normally performed by extensionists are badly needed.

151.

The remaining oil producing countries show similar performances.

in GDP declines in favour of manufacturing and services, the signs of structural

South Africa is the most consistent example of structural economic changes

an increase in the unemployment rate, when the manufacturing and the services

gains of the labour-factor.

with Botswana, is the highest in the sample set under discussion.

countries where major structural changes occurred.

Mozambique shows a positive trend in their economic transformation,

to change in this sector, in fact common to most African countries, where the

151 World Bank Group – 2013-2016 Country Partnership Strategy for the Republic of Angola, June 2012.

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The more complicated cases – and even to some extent in a process of

depicted in the following table.

INDICATORS OF AGRICULTURAL PRODUCTIVITY

COUNTRIESGROSS DOMESTIC PRODUCT AGRICULTURAL PRODUCTIVITY

OF LABOUR (USD) WEIGHT OF AGRICULTURE IN

GDP (%) 2009Million usd 2010

Growth rate2000/2010 1990 -1992 2005 -2007

South Africa 363704 3,9 2149 3149 3

Nigeria 193669 6,7 … … 33

Angola 84391 12,9 176 222 10

Kenya 31409 4,3 379 367 23

Cameroon 22394 3,2 409 703 19

Ivory Coast 22780 1,1 652 875 25

Tanzania 23057 7,1 219 271 29

Botswana … … … .. …

Zambia 16193 5,6 189 227 22

Gabon … … … … …

DRC 13145 5,3 209 162 43

Namibia … … … … …

… … … … …

Congo 11898 4,3 … … 5

Tchad 7588 9,0 209 212 14

Rwanda 5628 7,6 193 187 34

Mozambique 9586 7,8 117 174 31

SOURCE: World Bank – World Development Report 2012

In developed countries, the process of structural transformation of the agriculture is completed and this sector does not represent, on average, more

is very high and achieved through the decrease in volume of skilled labour, the

the purpose of benchmark (2005/2007)152

152 World Bank – World Development Report 2012.

| 177


productivity, the values are lower, but also very different from each other

economies and economies in transition in agricultural productivity – the

period 1970-2008153

153 Global Financial Integrity, 2010.

COMPETITIVENESS FOR AGRICULTURAL PRODUCTIVITY 2005/2007 (INDEXES)

100,0

7,011,7

22,327,8

8,6 7,2 5,1 6,6 6,1 5,5 10,0

Sout

h Af

rica

Ango

la

Keny

a

Cam

eroo

n

Ivor

y Coa

st

Tanz

ania

Zam

bia

DRC

Tcha

d

Rwan

da

Moz

ambi

que

SSA

SOURCE: Graph prepared based on the data of the previous frame.

178 |

CEIC / UCAN

In the past, some authors have stated that no public or private investment

distorted currency markets – illustrated by the high premiums of the black market 154

authors also suggested that the level of investment in Africa was too high and

155. Do the

Even though the low return on investment has penalized the economic

The agricultural sector in Angola has benefited very little from economic

between petrol and agriculture are being very faint.

Compared to South Africa it is clear that in a situation of the economic opening, the Angolan agriculture will be absolutely devastated. Agricultural

The Republic of Congo is a case of paralysis in the process of structural

relative importance of agriculture in the GDP of a country with very high

154

Macro and Micro Evidence. “Journal of African Economies, 10, 81-108, 2001.155

Macro and Micro Evidence. “Journal of African Economies, 10, 81-108, 2001.

| 179


among the sample countries have been processed, noting that the direction is correct, namely the reduction of the burden of agricultural GVA in GDP,

Another angle of analysis relates to the speed of these changes, approximately given by the annual rate of change of the weight of agriculture in GDP.

STRUCTURAL CHANGES IN AGRICULTURE BETWEEN 1995 AND 2010(% CHANGE OF THE WEIGHT OF AGRICULTURE IN GDP)

0

10

20

30

40

50

60

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ríitiu

s

Cong

o

Tcha

d

Rwan

daM

ozam

biqu

e

1995 2010


INTENSITY OF STRUCTURAL CHANGES IN AGRICULTURE(RATE OF CHANGE OF ITS WEIGHT IN GDP BETWEEN 1995 AND 2010)

-4-3,5

3-2,5

-2-1,5

-1-0,5

00,5

1

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

s

Cong

o

Tcha

d

Rwan

daM

ozam

biqu

e


180 |

CEIC / UCAN

4.2.4

exports and imports.

GROSS ADDED VALUE BY SECTOR (billion dollars)

COUNTRIESAGRICULTURE INDUSTRY MANUFACTURING SERVICES

2000 2010 2000 2010 2000 2010 2000 2010

South Africa 4,0 10,9 42,5 112,7 25,3 54,6 86,4 240,0

Nigeria 22,5 87,2 14,3 46,5 1,4 13,6 9,7 60,0

Angola 0,5 8,4 6,6 53,2 0,3 5,1 2,0 22,8

Kenya 4,1 6,0 2,2 4,4 1,5 2,5 6,5 21,0

Cameroon 2,2 4,5 3,6 6,7 2,1 4,9 4,2 11,2

Ivory Coast 2,5 5,2 2,6 6,2 2,3 4,3 5,3 11,4

Tanzânia 3,4 6,5 1,9 5,8 0,9 2,3 4,8 10,9

Botswana 0,2 0,4 3,0 6,7 0,3 0,4 2,5 7,7

Zambia 0,7 1,5 0,8 6,0 0,4 1,5 1,7 8,7

Gabon 0,3 0,5 2,9 7,0 0,2 0,5 1,9 5,5

DRC 2,2 5,6 0,9 3,1 0,2 0,7 1,3 4,3

Namibia 0,5 1,0 1,1 2,4 0,5 1,0 2,3 8,9

0,3 0,4 1,4 2,8 1,1 1,8 2,9 6,5

Congo 0,2 0,5 2,3 9,5 0,1 0,5 0,7 1,9

Tchad 0,6 1,1 0,2 3,7 0,1 0,5 0,6 2,9

Rwanda 0,6 1,9 0,2 0,8 0,1 0,3 0,8 2,9

Mozambique 1,0 3,1 1,1 2,2 0,5 1,2 2,1 4,3

Sample 45,7 144,6 87,4 279,8 37,2 95,8 135,8 431,1

SOURCE: World Bank – World Development Indicators, 2012.

structural change – was the one that introduced less dynamics in the process of structural transformation. The agricultural sector in the countries of the

| 181


which, in fact, was the most transformed sector between 2000 and 2010.

which should mainly be explained by the weak departing situation, after 27

severe macroeconomic insufficiencies and instability, and economic policies

The data in the table on the next page corroborate some conclusions about the

0

15,0

25,0

DYNAMICS OF STRUCTURAL TRANSFORMATION 2000-2010

20,0

10,0

5,0

Agriculture Industry Manufacturing Services

SOURCE: World Bank, World Development Indicators, 2012.

Sout

h Af

rica

Nige

riaAn

gola

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

sCo

ngo

Tcha

dRw

anda

Moz

ambi

que

Sam

ple

SSA

0

25,0

45,0

ANNUAL NOMINAL GROWTH RATES OF SECTORAL VAB

35,0

15,020,0

40,0

30,0

10,05,0

Sout

h Af

rica

Nige

riaAn

gola

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

sCo

ngo

Tcha

dRw

anda

Moz

ambi

que

Sam

ple

SSA

Agriculture Industry Manufacturing Services


182 |

CEIC / UCAN

ECONOMIC STRUCTURE OF THE SAMPLE COUNTRIES (VALUES IN %)

COUNTRIESAGRICULTURE INDUSTRY MANUFACTURING SERVICES

2000 2010 2000 2010 2000 2010 2000 2010

South Africa 3 3 32 31 19 15 65 66

Nigeria 49 45 31 24 3 7 21 31

Angola 6 10 72 63 3 6 22 27

Kenya 32 19 17 14 12 8 51 67

Cameroon 22 20 36 30 21 22 42 50

Ivory Coast 24 23 25 27 22 19 51 50

Tanzânia 33 28 19 25 9 10 47 47

Botswana 3 3 53 45 5 3 45 52

Zambia 22 9 25 37 11 9 52 54

Gabon 6 4 56 54 4 4 38 42

DRC 50 43 20 24 5 5 30 33

Namibia 12 8 28 20 13 8 60 73

7 4 31 29 23 19 62 67

Congo 5 4 72 80 3 4 23 16

Tchad 42 14 11 49 9 7 46 38

Rwanda 37 34 14 14 7 6 49 52

Mozambique 24 32 25 23 12 13 51 45

Sample 17,0 16,9 32,5 32,7 13,9 11,2 50,6 50,4


process of economic growth. The share of agriculture in GDP in all the countries of the Sample did not change from 2000 to 2010, the same happening to the industrial sector in a broad sense, encompassing the extraction of minerals.

to the strategies of structural changes.

In Chad there seems to have been a radical break with the agricultural sector in favour of drilling for oil. It became part of African oil producers since 2001, when its proved reserves were estimated at 900 million barrels156. In 2010 and 2011 proved reserves increased to 1.5 billion barrels157. Although it is an average daily production of about 120,000

156 BP Statistical Review of World Energy, June 2012.157 BP Statistical Review of World Energy, June 2012.

| 183


signs towards structural changes: the share of agriculture and industry decreased and the manufacturing and services in general, increased. In fact, some studies on the African economy have highlighted Nigeria, in the set of African oil producers, as a case of successful structural changes in the

industry, if not contradictory to this trend with strong policies to boost manufacturing.

In Angola it seems clear the emergence of a movement for change in the

weight of the industry (with mining) and the increase in manufacturing and

widely from country to country158.

158

arithmetic average of the sum, in module, of the differences between the sectoral shares in GDP in the base year and the target year.

INDEXES OF TRANSFORMATION OF ECONOMIC STRUCTURES

02,004,006,008,00

10,0012,0014,0016,0018,0020,00

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

s

Cong

o

Tcha

d

Rwan

daM

ozam

biqu

e

2000/2010

SOURCE: Calculations based on the �ile Structural Transformations in Africa, CEIC.

184 |

CEIC / UCAN

and clothing, machinery and transport equipment, chemical industry and other manufacturing.

As it was not possible to obtain relevant and transversal information on

intensity of change in the industrial structures of the sample African countries.

The following graph shows that Angola159

experienced a process of sectoral adjustments with some relevance.

The point of relevance in the process of structural changes in the Angolan manufacturing industry is the loss of relative importance of the beverages

As noted in the chapter on methodology, the analysis of employment would

159 Information for Angola originates in some public institutions and CEIC estimates.

INDEXES OF TRANSFORMATION IN MANUFACTURING

0

2

4

6

8

10

12

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

s

Cong

o

Tcha

d

Rwan

daM

ozam

biqu

e

2000/2008


| 185


in particular the most members of the Sample. Surely this failure is due to the countries: either because national statistics of employment do not exist or are lacunar, or because it is not politically convenient to disclosure them

for analysis, the employment variable was removed from the study of structural

force labour between sectors of the economies under study.

STRUCTURE OF EXPORTS (%)

COUNTRIESFood

productsAgricultural raw

materialsPetrol and Various

mineralsManufactured

products

2000 2010 2000 2010 2000 2010 2000 2010 2000 2010

South Africa 8 9 3 2 10 10 11 33 54 47

Nigeria 0 3 0 2 100 87 0 1 0 7

Angola 99 97 2 1 1

Kenya 59 48 9 11 8 4 3 2 21 35

Cameroon 15 24 9 15 67 50 6 3 3 8

Ivory Coast 51 50 14 10 21 24 0 0 14 16

Tanzânia 66 32 13 7 0 3 1 34 20 24

Botswana 3 5 0 0 0 0 7 15 90 80

Zambia 9 6 4 1 1 1 74 86 11 6

Gabon 1 1 12 9 83 83 2 3 2 4

DRC

Namibia 29 23 1 0 2 0 11 31 56 45

18 37 1 1 0 0 0 0 81 62

Congo

Tchad

Rwanda 57 52 3 3 0 0 37 37 3 8

Mozambique 42 16 11 4 21 20 17 54 7 2


Among the 17 countries of the Sample, South Africa, Nigeria and Angola (in both cases with a high share of oil) were the economies that most exported in

186 |

CEIC / UCAN

Nigeria, Angola and Gabon have their exports concentrated in a single

are low.

Looking at the groups of product included in the structure of exports –

concluded that only five countries were organized towards an improvement in the index of export diversification. All others remained dependent on the

2000 2010

24,6

32,124,7

22,1 16,18,5

65,3

63,0

Sout

h

Afri

ca

Nige

ria

Ango

la

Thre

e

coun

tries

PERCENTAGE DISTRIBUTION OF EXPORTS OF SSA


THE ECONOMIES WITH MOST EXPORTS IN SSA (BILLION DOLLARS)

30,0

81,8

Sout

h

Afric

a

Nige

ria

Ango

la

Keny

a

Ivor

y

Coas

t

Gabo

n2000 2010

21,0

82,0

7,9

53,5

1,7 5,2 3,910,3

2,69,4

Source: Calculations based on the �ile Structural Transformations in Africa, CEIC.

COEFFICIENT OF THE STRUCTURAL TRANSFORMATION OF EXPORTS

16

Sout

h Af

rica

Nige

riaAn

gola

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

nRD

CNa

mib

iaM

aurit

ius

Cong

oTc

had

Rwan

daM

ozam

biqu

e

2000/2010

0

7,68

01,2

4,644,2

85,6

0,8

5,26,2

15,2

20


| 187


exploitation and export of products in the range of non renewable natural resources. The most extreme cases are Nigeria, Angola, Gabon and Mozambique

THE COUNTRIES THAT BEST DIVERSIFIED THEIR EXPORTS (% of total exports)

COUNTRIESFOOD PRODUCTS MANUFACTURED PRODUCTS

2000 2010 2000 2010South Africa 8 9 54 47Kenya 59 48 21 35Ivory Coast 51 50 14 16Tanzania 66 32 20 24

18 37 81 62

SOURCE: Calculations based on the file , CEIC

As pointed out, the study of structural economic change must also take due

advantages of the countries.

The 17 countries of the sample imported, in 2010, a total of 232 billion dollars

PETROL AND DERIVATIVES STRUCTURE OF IMPORTS (%)

COUNTRIESFood

productsAgricultural raw

materialsPetrol and Various

mineralsManufactured

products2000 2010 2000 2010 2000 2010 2000 2010 2000 2010

South Africa 5 6 1 1 14 20 2 2 69 65Nigeria 20 10 1 1 2 1 2 1 75 86AngolaKenya 14 12 2 2 22 22 1 2 60 63Cameroon 18 18 2 2 23 27 1 1 56 52Ivory Coast 17 19 1 1 34 24 1 1 46 55Tanzania 15 10 3 1 19 28 1 1 63 60Botswana 14 12 1 1 5 15 2 2 75 68Zambia 8 5 3 1 12 12 3 21 73 62Gabon 18 17 1 0 4 7 1 1 76 74DRCNamibia 17 14 1 1 3 14 1 1 78 70

14 21 2 2 12 19 1 1 70 56CongoTchadRwanda 21 13 3 2 14 8 2 1 60 76Mozambique 14 12 1 1 13 20 1 1 68 50


188 |

CEIC / UCAN

The two major product groups which concentrate imports of these Sub-Saharan countries are artifacts – with a focus on machines, industrial and

weaknesses of African economies in the manufacture of high technology goods –

more structural elements in their economies, with a transfer of imports of food

The largest importers of goods in 2010 were South Africa, Nigeria, Angola and

COEFFICIENTS OF STRUCTURAL TRANSFORMATION OF IMPORTED GOODS

3,8

Sout

h Af

rica

Nige

ria

Ango

la

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

DRC

Nam

ibia

Mau

ritiu

s

Cong

o

Tcha

d

Rwan

daM

ozam

biqu

e

2000/2010

0

5,6

4,4

0

1,4

6,8

3,84,2

1,61,2

0

4,6

2,2

5,4

6,4

0


THE LARGEST IMPORTERS IN THE SSA (BILLION DOLLARS)

0

20000

40000

60000

80000

100000

Sout

h Af

rica

Nige

ria

Ango

la

Keny

a

Cam

eroo

n

Ivor

y Coa

st

Tanz

ania

2000 2010


| 189


The degree of exposure of the Sample economies – measured by weight of

The countries most exposed to external shocks and more dependent on a reduced number of export products are Angola, Gabon and Congo, all oil producers.

Nigeria, curiously and surprisingly, is not in this group of countries with a higher risk of exposure to the exterior, which is consistent with the decrease

INDICATORS OF EXTERNAL TRADE

COUNTRIESGoods Exported (billion dollars)

Goods Imported (billion dollars)

Degree of Openness (%)

Apparent

2000 2010 2000 2010 2000 2010 2000 2010

South Africa 29983 81821 29695 94040 22,6 22,5 99,8 103,4

Nigeria 20975 82000 8721 44235 45,6 42,3 73,4 80,5

Angola 7921 53500 3040 21500 87,0 63,4 46,4 62,1

Kenya 1734 5151 3105 12090 13,7 16,4 110,8 122,1

Cameroon 1833 4000 1489 4850 18,1 17,9 96,6 103,8

Ivory Coast 3888 10320 2482 7830 37,4 45,3 86,5 89,1

Tanzania 734 3687 1524 7830 7,2 16,0 107,7 117,9

Botswana 2675 4693 2081 5657 47,8 31,5 89,4 106,5

Zambia 892 7200 888 5321 27,9 44,4 99,9 88,4

Gabon 2598 9371 950 2983 50,9 72,1 67,7 50,9

DRC 807 5300 683 4500 18,8 40,5 97,1 93,9

Namibia 1320 4052 1550 5360 33,8 33,2 105,9 110,7

1557 2239 2093 4402 33,8 23,1 111,7 122,3

Congo 2489 8200 465 2900 77,8 68,9 36,8 55,5

Tchad 183 3450 317 2600 13,1 45,4 109,6 88,8

Rwanda 52 297 211 1431 3,1 5,3 109,4 120,3

Mozambique 364 3200 1158 4500 8,7 33,3 118,9 113,5

Sample 80005 288481 60452 232029 29,8 33,7 92,7 93,4


From the group of countries most dependent on oil exports, Angola is the one

which is also in line with the structural changes to the economy that have been registered.

190 |

CEIC / UCAN

South Africa, Namibia, Cameroon, Kenya and Rwanda are examples of great stability in their exposure to the outside, explained, apparently, by a increase

market, as a factor of economic growth. Mauritius stands out for being the economy in the largest relative value of the internal market: the domestic

0

60,0

100,0

ECONOMIC EXPOSURE OF THE COUNTRIES IN SAMPLE

80,0

40,0

20,0

Degree of openness (%) 2000Degree of openness (%) 2010

Degree of internationalization (%) 2000Degree of internationalization (%) 2010


Sout

h Af

rica

Nige

riaAn

gola

Keny

aCa

mer

oon

Ivor

y Coa

stTa

nzan

iaBo

tsw

ana

Zam

bia

Gabo

n

RDC

Nam

ibia

Mau

ritiu

sCo

ngo

Tcha

dRw

anda

Moz

ambi

que

Sam

ple

SSA

| 191


5. EMPLOYMENT AND PRODUCTIVITY

Employment worldwide encompasses over 3 billion people, slightly less

the resources involved, in terms of investments and use of raw materials and commodities in production processes. But these jobs are not homogeneous among themselves. According to international statistics, 1.65 billion people

labour force is the basis of the performance of one of the most important

received.

The remaining 1,4 billion employees (or occupied) play carry out their productive activity in agriculture, in small family units of production and seasonal performances, all income being uncertain, irregular and of low value

employment. This is the type of pre-employment that prevails in developing

of employment into permanent and regular employment would represent on the demand and world trade. A group of more than 200 million people, mostly youths, are unemployed and desperate for paid work.

The challenges for job creation in the world are multifaceted, from the improvement of the capacity of the workers involved, through the movement of

supply of labour for those who want work (respecting the universal right to work).

The labour force in Sub-Saharan Africa has increased at an average annual rate of 8 million people, while in South Asia the increase is 1 million people each month.

192 |

CEIC / UCAN

aged over 65 years.

The structural economic and technological change are increasingly dragging workers from low to high productivity activities, i.e., from rural areas to the

economies – including emerging – reside in cities, turning them into mega-metropolis, pollutants and unmanageable in terms of basic civility. These

countries’ inlands increasingly deserted in the human point of view. The rural-

from agriculture to industry, a move that can improve the standard of living of

requirement.

Despite obvious gains in the workers education, still prevails a lack of

competition. And this mismatch is particularly seen in Sub-Saharan Africa, where the high number of expatriates. It is also in this part of the world that

those who need to work. It was in South Africa that in 2011 this kind of work

a week, with the right to payment of holiday allowance starts to be rare throughout the world and has not been the norm in developing economies160.

hours a week, referring them to the category of precarious and temporary. These are elements that greatly complicate the characterization of being employed or unemployed.

160 For a long time it was an acquisition of the European social model, now in full unbundling.

| 193


Unemployment rates161 vary along the years, in accordance with the business

162.

One of the most relevant aspects of labour economics is the distinction

people, above a certain income level, prefer leisure activities, while others

Employment is the way to obtain income. A good salary is the way to improve

not help to get out of poverty, however, a job is being performed according to some

mechanical, but without growth nothing else can happen. Good wages, needed to overcome the vicious circle of poverty, depend on the skill levels of the workforce,

163.

1.2 million new jobs were created in the country, as contained in the Government

161

subjected to the rules of supply and demand.162 Spain, Greece, Portugal and Cyprus are the economies of the euro where the unemployment rate, at this particular stage of their economic cycles, is higher, with values above 17%.163

of the population of the developing world living on less than U.S. $1.25 a day (in purchas-ing power parity, or PPP) fell from 52 percent in 1981 to 22 percent in 2008, or from

creation of millions of new, more productive jobs, mostly in Asia but also in other parts of the developing world, has been the main driving force “– World Development Report 2013, World Bank.

194 |

CEIC / UCAN

therefore, that – to the extent that ECCI is unable to measure national employment – the only way to settle the balance equations would be the

value. We just have to compare the rates of GDP growth and the employment to establish the existence of a close relationship between the two, without confirming that economic growth cannot create jobs. Economic growth is a necessary condition to generate jobs, although we always have to bear in

CONDITIONS TO MEET THE GOAL OF CREATING 1 200 000 NEW JOBS FROM 2009 TO 2012

GDP growth rate (%)

Jobs needed

Jobs created

Employment Excedent

GDP growth needed

Growth rate of

employment

Growth rate of Jobs to

create

2009 2,7 300000 384368 84368 5,7 –25,5

2010 2,4 300000 82085 –217915 1,2 23,1

2011 3,1 300000 104927 –195073 1,5 18,7

2012 9,8 300000 –300000 16,8 8,7 7,5 628620

–628620

new jobs in four years.

economy was not able to create in four years over 623,000 new jobs.

| 195


GDP growth rate (%) Jobs needed Jobs created Employment

2009 2,4 300000 384368 84368

2010 3,5 300000 23881 –276119

2011 3,9 300000 110391 –189609

2012 7,4 300000 104848 –195152

623488 –576512

amount of employment in agriculture to 5,888,135. If this is not done, then there

Thus, between 2009 and 2012 623,488 new jobs were created, according to

agenda of the Government.

The CEIC has proceeded annually to estimate unemployment in Angola,

Despite a downward trend, the unemployment rate remains very high in

164.

The rate of unemployment has been declining since 2002, as a conjugated

of private investment – even in very concentrated sectors of state of the art technology and intensive in capital – the employment policies pursued by the Government, through the MAPESS, and the very strong public investment in the

of the country (the State applied in these areas almost 77 000 billion dollars

165

164 In terms of a natural unemployment rate of 4%, and productivity of about $20,000, the potential product may exceed 191 billion dollars (the potential product corresponds to the

165 Balance Reports of Government Programs and Budget Execution Reports.

196 |

CEIC / UCAN

cycle in these two variables: when the economy grows less it creates more jobs

If the 1.2 million new jobs had been created – annual average pace of 300,000

Term Development Plan for 2013-2017.

the same value as that calculated for 2010. It seems that the ability of the formal economy to create jobs at a rate higher than the growth of the economically

166

166 A study by the Ethics Committee for the National Bank of Angola on the informal sector in Luanda revealed that the ability to create jobs in the submerged economy grew from 5% in 2000 to over 15% in 2010.

PERFORMANCE OF UNEMPLOYMENT RATE

0

20,015,010,0

50

25,030,035,040,045,0

2000 4 8 122 6 20103 7 111 5 9

Perc

enta

ge

SOURCE: CEIC – Study �iles on productivity and employment.

| 197


Using another instrument scientific analysis of the unemployment rate,

(geometric average of annual growth rates of GDP between 2000 and 2012167)

In conclusion, whatever the methodology prism of the analysis, performance

that causes poverty, indigence and exclusion. But not just that.

167 Calculated based on information taken from the IMF’s reports on the World Economic

INDEX OF UNEMPLOYMENT BASE 100 IN 2000

0

500,0

1000,0

1500,0

2000,0

2500,0

3000,0

20

00

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

SOURCE: CEIC – Study �iles on the Okun Law

20120

15,0

25,0

10,0

35,0

40,0

5,0

20,0

30,0

2000 2003 2005 2007 2009 20112001 2002 2004 2006 2008 2010

SOURCE: CEIC – Study �iles on the Okun Law.

Unemployment rate, Okun Law

Perc

enta

ge

198 |

CEIC / UCAN

168.

The previous graph attempts to show the correlation between economic

variation, the largest amount of jobs should be created. However, empirical international evidence does not confirm the positive relationship between employment and growth.

technology.

It is a fact that in the years of higher real GDP growth the unemployment rate decreased. This phenomenon is visible up 2008. Of course the paradox 2009 – perhaps the year when more jobs were created – one which cohabitate

168

internal market, passing by the level of remuneration of the factors of national production, in particular the Angolan workforce. It should be recognized that the average monthly wages practiced by the Angolan and foreign private sector, to some professions (in some cases below the legally stipulated minimum wage) are in some cases real situations of exploitation, inconsistent with the constitutional principles and the rules of ethics and social solidarity.

COMPARED EVOLUTION BETWEEN GDP AND UNEMPLOYMENT

20120

15,0

25,0

10,0

35,0

45,0

5,0

20,0

30,0

40,0

2000 2003 2005 2007 2009 20112001 2002 2004 2006 2008 2010

SOURCE: CEIC, Study �iles on Employment and Produtivity.

Unemployment rate GDP growth rate

| 199


In the 60s, 70s and part of 80s of last century, the empirical evidences were different, and more than proportionate correlations are identified between economic growth and increased employment. The most known cases relate

growth determined the exhaustion of the domestic supply of skilled labour,

it is not only employment that the economic systems need to be transformed, modernize and progress. One of the most important elements of these structural

The employment sectoral performance in 2012, using the official data, is 169.

ESTIMATES OF EMPLOYMENT BEHAVIOUR IN ANGOLA 2005-2012 (thousands of workers)

2005 2006 2007 2008 2009 2010 2011 20124740,7 4827,8 5445,1 5655,7 5806,6 5652,6 5673,7 5866,5

12,3 12,8 12,9 12,9 12,6 14,6 15,9 15,9

Diamonds and others 39,8 41,8 42,6 43,5 43,7 23,6 24,6 24,6

Manufacturing industry 32,5 37,3 40,1 42,5 45,2 48,6 52,2 45,1

Electricity and water 0,0 0,0 2,5 2,5 8,7 13,8 18,3 18,3

54,8 206,7 214,0 240,4 303,9 323,4 330,5 342,4

Trade, Banks, Insurance, Services 152,9 202,0 276,4 334,8 459,8 477,0 506,5 558,3

Others 256,6 314,2 348,2 360,6 396,6 352,5 389,0 412,3

TOTAL 5289,6 5642,6 6381,7 6692,9 7077,2 7101,1 7211,5 7316,3

CEIC Estimates.

the diamond sector and other minerals, because we did not have access to their

169

unemployment rate.

200 |

CEIC / UCAN

As already pointed out, public investment has been one of the key levers of

of the economy.

diversification and income distribution. Despite a very favourable trend since

SECTORAL EMPLOYMENT OUTSIDE THE AGRICULTURAL SECTOR

0

200000

400000

600000

Oil and refined

Manufacturing industry

Public works and construc�on

Other

Diamonds and others

Electricity and water

Trade, Banks, Insurance, Services

SOURCE: CEIC, Study �iles on Employment and Productivity.

2005 2006 2007 2008 2009 2010 2011 2012

PERFORMANCE OF LABOUR PRODUCTIVITY

20120

4000,0

8000,0

2000,0

12000,0

16000,0

6000,0

10000,0

14000,0

2005 2006 2007 2008 2009 2010 2011

Valu

es in

USD

SOUCE: CEIC, Study �iles on Employment and Productivity.

| 201


It remains, however, a significant distance to some SADC countries – the standard reference Angola – as South Africa (where the value was around $

gross in the neighbourhood of $ 45,000, and for the European Union, where the

170. Within

and agriculture). Here also appears an evident asymmetric sectoral growth of the

170

are therefore very strong and the difference in the oil sector has not yet functioned as a factor in the spread, seizure and framework of good corporate governance practices and current strategic, hallmark of these leading industries.

GDP, EMPLOYMENT AND PRODUCTIVITY

20120

5,0

25,0

10,0

15,0

20,0

2005 2007 2009 20112006 2008 2010

SOURCE: CEIC, Studies on Employment and Productivity.

Employment growth rate (%)GDP growth rate (%)

202 |

CEIC / UCAN

– agriculture and manufacturing industry – have not been designed with the

lagging behind in this item, namely by irradiation of haulage effects (Poles Development Theory, François Perroux).

SECTORAL PRODUCTIVITY IN DOLLARS

2005 2006 2007 2008 2009 2010 2011 2012

Agriculture 549 770 875 1010 1177 1425 1655 1748

Manufacture 38141 61029 78770 96913 89986 103113 115759 172400

Diamonds 22228 27577 24788 21229 13748 32603 37470 68803

22639 10003 13701 18178 16547 20091 37470 68803

Services 29502 39245 36370 44919 30164 35205 38678 49863

Other 10614 12781 12245 14216 12805 16796 16285 18859

Average 5723 8496 9315 12395 9235 11789 13992 14406

Oil 1384151 2081764 2581580 3696171 2361729 2628840 3023078 3113775

of the oil sector and that of agriculture. These are two different worlds and

of the economy, and at low cost.

of the Angolan economy. Even within the non-oil economy, imbalances are enormous, appearing in the primary sector (agriculture, livestock, forestry and

resources made available.

| 203


When graphally inserting the oil sector, we lose the comparing notion

The following graph is an illustration of these profound asymmetries in the sectoral distribution productivity gains and spaces to be occupied and

VALUES OF APPARENT GROSS PRODUCTIVITY IN NON OIL SECTOR(DOLLARS PER WORKER)

Agric

ultu

re

Man

ufac

ture

Diam

onds

Serv

ices

Othe

rs

Aver

age

0,0

50000,0

100000,0

150000,0

200000,0

2005 2006 2007 2008 2009 2010 2011 2012

SOURCE: CEIC, Study Files on Employment and Productivity

SOURCE: CEIC, Study Files on Employment and Productivity.

VALUES OF SECTORAL PRODUCTIVITY (USD)

Agric

ultu

re

Man

ufac

ture

Diam

onds

Serv

ices

Oil

Othe

r

Aver

age

0,0

1000000,0

500000,0

1500000,0

2000000,0

2500000,0

3000000,0

3500000,0

4000000,0

2005 2006 2007 2008 2009 2010 2011 2012

204 |

CEIC / UCAN

of sectoral productivity are actually disproportionate, even considerable improvements situations are noticed, such as in manufacturing and tertiary

as already emphasized. In some years, productivity and employment grows

since 2002, registering significant losses in economic efficiency, weighing

prices and improve the quality of life of the families of workers.

performance of the economy was not conducive to a remarkable recovery in

of oil, diamonds and electricity. Agriculture and market services were the only

COMPARISON BETWEEN EMPLOYMENT AND PRODUCTIVITY

2012-30

-10

10

-20

30

6050

0

20

40

2005 2007 2009 20112006 2008 2010


| 205


depends on the very process of economic growth and the transfer of part of their

An economy in transition to the diversification of exports must present

countries and values of this indicator. If employment varies an annual average

171

171 As no reliable and trustworthy data on employment in Angola is available, and despite the mention further back of an estimated unemployment rate of 26.5% in 2012, it is always reasonable to place it within a range that covers the uncertainties associated with its behaviour.


SECTOR PRODUCTIVITY GAINS

Agric

ultu

re,

fore

stry

,...

Oil

Diam

onds

an

d ot

hers

Man

ufac

turin

g

indu

stry

El

ectri

c ene

rgy

and

wat

erPu

blic

Wor

ks an

d ...

Com

mer

ce, B

anks

Insu

ranc

e

Othe

rs

Aver

age

-80

0

-40-60

-20

20406080

100

2005 2006 2007 2008 2009 2010 2011 2012

206 |

CEIC / UCAN

prices (thus controlling inflation in narrow limits, economically and socially

172.

or reducing unemployment. What the Economic Theory and empirical evidence

And this is what makes the issue of employment very complicated, uncertain

increasing intensity of technology and capital investments.

There are several instruments of Economic Theory useful to relate employment and economic growth. The CEIC resorted to a project to try to project up to the end of the new legislature, which began on 31 August last, the amount of

173, based

174.

172 Redistributive policies by means of subsidies and transfers from the state to the economy and families can also be used to improve the purchasing power of labour remuneration. However, problems arise with budgetary balances and the cost of the opportunity associated to the respective amounts.173 IMF – Angola, 2012 Article IV Consultation and Post Program Monitoring.174 It is still not believed that in 2009 384 368 new jobs were created – corresponding to a real rate of variation of 5.7% – when GDP increased by merely 2.4%.

| 207


Despite the high economic growth – albeit marred by crisis of 2008/2009,

in time. Employment is one of the pathways to promote improvements in the functional distribution of income – the one that is established between the factors of production involved in the generation of annual aggregate

other approaches, policies and measures and depend on the state and the

on the part of political and economic elites are opaque and dominated by

to transfer part of this wealth to other classes and social groups. All this is aggravated when economic growth rates are reduced.

PROSPECTS OF JOB CREATION UP TO 2017

GDP growth rate

Employment growth growth rate

Jobs to create

Volume of employment

Rate of unemployment

(%)

2012 6,83 1,26 5,50 104848 7316346 26,5

2013 5,05 –0,43 5,50 –31430 7284916 28,7

2014 5,11 –0,37 5,50 –26644 7258272 30,8

2015 5,29 –0,20 5,50 –14519 7243753 32,8

2016 5,19 –0,30 5,50 –21610 7222143 34,8

2017 5,30 –0,19 5,50 –13527 7208616 36,6

SOURCES: IMF – Angola, 2012 Article IV Consultation and Post Program Monitoring, CEIC (Departament of Economic Studies): Studies on Employment and Productivity.

integrated in the SADC region and the world economy (annual growth rate

given the predictable – though uncertain – limits impending on national economic growth capability175. In this case, one would arrive at the end of new

not have been possible to create net employment and consequently distribute

175 IMF – Angola, 2012 Article IV Consultation and Post Program Monitoring. See also

mimeo (can be found at www.ceicucan.org).

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CEIC / UCAN

Sacrificing productivity and competitiveness – with consequences on the nature of the process of diversification of the productive structure and the

PERSPECTIVES OF JOB CREATION UP TO 2017 (hypothesis 2)

GDP growth rate

Employment growth rate growth rate

Jobs to create


Unemployment rate (%)

2012 6,83 3,47 3,25 104848 7316346 26,5

2013 5,05 1,74 3,25 127321 7443667 27,2

2014 5,11 1,81 3,25 134393 7578060 27,8

2015 5,29 1,97 3,25 149650 7727711 28,3

2016 5,19 1,87 3,25 144844 7872555 28,9

2017 5,30 1,99 3,25 156490 8029045 29,4

BEHAVIOUR OF UNEMPLOYMENT RATE

0

20,015,010,0

50

25,030,035,040,045,0

2000 4 8 12 16 172 6 2010 143 7 11 151 5 9 13

Perc

enta

ge


UNEMPLOYMENT INDEX BASE 100 IN 2000

0

2000,0

4000,0

6000,0

8000,0

10000,0

12000,0

2000 4 8 12 16 172 6 2010 143 7 11 151 5 9 13


| 209


In this case, the accumulated volume of employment at the end of 2017 could be of 712,699 new jobs (between 2013 and 2017 the sum of the values of the

Monetary Fund. Even so, the unemployment rate would rise in face of 2012, and

The Government projects, up to 2017, an economic growth in average more optimistic than the International Monetary Fund. In fact, the National

rate may have the following evolution, considering a trade off in favour of

PERSPECTIVES OF JOB CREATION UP TO 2017 (Gouvernment hypothesis)

GDP growth rate

Employment growth rate growth rate

Jobs to create


Unemployment rate (%)

2013 7,1 3,7 3,25 272813 7589159 25,7

2014 8,0 4,6 3,25 349138 7938297 24,4

2015 8,8 5,4 3,25 426707 8365004 22,4

2016 7,5 4,1 3,25 344322 8709326 21,3

2017 4,3 1,0 3,25 88569 8797896 22,6

EVOLUTION OF UNEMPLOYMENT RATE SACRIFICING PRODUCTIVITY

0

20,015,010,0

50

25,030,035,040,045,0

2000 4 8 12 16 172 6 2010 143 7 11 151 5 9 13

Valu

es in

%


210 |

CEIC / UCAN

An overall 2013-2017 quantitative of 1481550 new jobs may be created by 2017, if the average annual rates of growth are those admitted by the

the growth rates of GDP that Government originate fewer jobs. In this case, the

of new jobs would be 582558 between 2013 and 2017.

markets, but the other can be managed internally, referred, in particular, to the agriculture and manufacturing. However, public policies that have been

176.

growth and household spending – the internal effects are intense and new models, strategies and policies need to be tested.

It is apparent, therefore, that employment is a very sensitive economic

order to avoid excessive promises.

176 See Economic Report of Angola – 2011, CEIC / UCAN, released in CEIC/UCAN, June 2012, in particular the approaches on agriculture and manufacturing in the internal

| 211


6. GROWTH PERSPECTIVES

6.1 The world economy and Angola’s main economic partners

177

good news for the world economy and African partners from European countries.

During the last two or three years we have seen the performance of the world economy at two speeds: that of developing countries (especially emerging

economic crisis of 2008/2009 – was higher than the second, especially China, India and sub-Saharan Africa.

The United States seems to have entered a route against the crisis, one of the indicators of this possible new trend being the unemployment rate, which has been decreasing178 thanks to improved expectations of consumers and

PERFORMANCE OF ADVANCED ECONOMIES (GDP growth rate in %)

2011 2012 2013 2014WORLD 4,0 3,2 3,3 4,0

Developed Economies 1,6 1,2 1,2 2,2

United States of America 1,8 2,2 1,9 3,0

Euro 1,4 –0,6 –0,3 1,1

Germany 3,1 0,9 0,6 1,5

France 1,7 0,0 –0,1 0,9

Italy 0,4 –2,4 –1,5 0,5

Spain 0,4 –1,4 –1,6 0,7

Japan –0,6 2,0 1,6 1,4

SOURCE: .

177

178

212 |

CEIC / UCAN

that, between 2009 and 2011, grew at a slower speed. I.e. 2013 and 2014 may

economies but weaker in advanced economies, is becoming a three-speed

our forecasts. Growth in emerging market and developing economies is forecast to reach 5.3 percent in 2013 and 5.7 percent in 2014. Growth in the United States is forecast to be 1.9 percent in 2013 and 3.0 percent in 2014. In contrast, growth in the euro area is forecast to be –0.3 percent in 2013 and 1.1 percent in 2014. The

179.

percent growth for 2013. Given the high level of public debt, however, embarking

180.

As for the main partners of Angola – Sub-Saharan Africa, South Africa, China, Brazil and Portugal – the growth prospects through 2014 are listed in the table that follows.

179

180

| 213


PERFORMANCE OF ADVANCED ECONOMIES (GDP growth rate in %)

2011 2012 2013 2014Sub-Saharan Africa 5,3 4,8 5,6 6,1

China 9,3 7,8 8,0 8,2

Brazil 2,7 0,9 3,0 4,0

South Africa 3,5 2,5 2,8 3,0

Portugal –3,2 –2,3 0,6 2,8

SOURCE:

projected $ 102.6 per barrel in 2013 and $ 97.58 in 2014 (these prices are a simple average of the market prices of UK Brent, Dubai Fateh, and West Texas Intermediate.)

6.2 The Angolan economy

6.2.1

overcome the Nigerian and South African up to 2016181

dynamics of growth revealed by Angola since the civil war ceased to harass the

in terms of absolute GDP value (billions of dollars): Nigeria/Angola – 2.7 and South Africa / Angola – 4.1182. To reverse this gap in seven years requires an

to overtake Nigeria183

Angola in 2017 – 153.5 billion dólares184 – is lower than Nigeria’s (184,700 million dollars) and South Africa (284 billion dollars) in 2009185.

181 Surely these positions can lead to certain political opportunism and therefore, as is

view of an economic analysis.182 World Bank – World Development Indicators, 2011.183 Assuming zero growth for South Africa and Nigeria during this period.184 International Monetary Fund – Angola 2012 Article IV Consultation and Post Program Monitoring, August 2012.185 World Bank – World Development Indicators, 2011.

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CEIC / UCAN

importantly, will there be conditions to finance such a high growth sector

186

Internal conditions for such growth can be discussed by analyzing them:

within the meaning of Robert Solow and the return on public investment.

6.2.2 The Mini-Golden Age of Angola’s growth

The period between 2002 and 2008 was the one with the highest rates of real GDP growth in the country. The internal surrounding atmosphere facilitated this, and the external framework was the best since independence:

in Africa).

beginning of the new recovery policy of fundamental macroeconomic

encouraged and aided by the excellent conjuncture of tax revenues (4.5 billion dollars in 2002 and 42.4 billion in 2008).

The world economy was in a phase of rapid growth, not only on the side of more developed economies, but also, especially, the emerging economies like China, India, Brazil, Korea, Russia and India.

186

| 215


presented a performance always upward over the period, reaching, in 2008, the amount of 93.7 dollars per barrel. The average price between 2002 and 2008 was $ 52.6 per barrel.

Although the Government’s actions have been consistent with the new political conditions and economic and social demands, it seems that growth naturally had to happen. The military instability has always been the worst scenario for the growth of savings, because it increases uncertainty and the risk of public and private investment, constrains the free movement of

investment projects and encourage private investment.

potential afforded by oil revenues was actually used for the benefit of the economic system and the system social187.

investment.

187 By what processes the political elite has accumulated extraordinary wealth and what were the sources used for this.

GDP PERFORMANCE

0

2,0

4,0

6,0

8,0

10,0

1,0

3,0

5,0

7,0

9,0

Emerging and developing economiesAdvanced economies

World economy

2005

2004

1994

-200

3

2006

2007

2008

Rate

s in

%

SOURCE: IMF, World Economic Outlook, April 2012.

216 |

CEIC / UCAN

Between 2002 and 2008 the average annual rate of GDP cariousness was

188.

The extraordinary atmosphere encircling the new economy in Angola led to

On the other hand, the average share of government revenues in the general

188

of GDP.

MINI-GOLDEN AGE OF ANGOLAN ECONOMICS

0

5,0

10,0

15,0

20,0

25,0

Real GDP growth rate (%)

2002 2003 2004 2005 2006 2007 2008

Valu

es in

%

SOURCE: Balance of Government Programs and CEIC Economic Reports.

GOVERNMENT REVENUE IN MINI-GOLDEN AGEOF ANGOLAN ECONOMICS

0

10,0

20,0

30,0

40,0

50,0

60,0

TotaL revenue (% GDP) Mobile annual average

2002 2003 2004 2005 2006 2007 2008

SOURCE: International Monetary Fund, Angola 2012 Article IV Consultation and Post Program Monitoring, August 2012.

| 217


In 2008 there was an unusual increase in public spending, away from the

It was thanks to these budget gaps that the major program of the country’s

28.6 billion dollars.

The intensity of economic growth, the relative fiscal consolidation and

the external image of a country that required 27 years in order to end the waste of resources caused by the civil war. The consequence, natural and almost

funding, conveyed by lines of credit.

BALANCE (IN AND OUT) OF FOREIGN DIRECT INVESTMENT FLOWS IN ANGOLA

2002 2003 2004 2005 2006 2007 2008Million dollars 1672 3505 1449 –1304 –38 –893 1679

SOURCE: .

the problems created by an intensive GDP growth – beyond the realistically

PUBLIC EXPENDITURE IN MINI-GOLDEN AGEOF ANGOLAN ECONOMICS

0

10,0

20,0

30,0

40,0

50,0

60,0

Total expenditure (% GDP) Mobile annual average

2002 2003 2004 2005 2006 2007 2008


218 |

CEIC / UCAN

expected (corresponding to the liberation of some energies, suppressed by

existing management ability – where the quantity of development prevailed 189,

workforce – both in absolute terms and especially when compared to the salaries of expatriate Chinese, Portuguese and Brazilian – have been the subject of strikes and protests and can curb internal demand growth, that it is necessary to

190.

The increases of business costs inherent to this measure would have to be

processes and reduction of collateral costs, mainly energy, water, urban

Productivity, wages and employment should be treated with their own

6.2.3 Future challenges and sustained growth in Angola (2012/2017)

Growth has always been one of the most compelling research topics of economic sciences. This fascination comes from various social expectations projected in this concept. I.e. without growth apparently nothing can happen: no

189 See the results of IBEP 2008/2009.190 “Angola growing more and distributing better” may be nothing more than a mere

given the poverty levels (about two thirds of the population lives on less than two dollars a day – Louise Redvers, Infrastructure in Angola: Winners and Losers, China Economic

passport to concrete improvement, real and sustainable living conditions, then place the

middle class is a serious and strategic challenge.

| 219


of produção191

natural cycle of good and bad harvests.

of production. However, other indicators are now much more expressive in

development – much wider than growth – to include not only aspects related to

of values.

to feed a growing process. On the one hand, to insist on capital investment, while the other would be to emphasize the importance of innovation and

amount of capital per worker, assuming, as a result, that the production becomes increasingly capital intensive. I.e., the reserve capital grows faster

worker (Q / L) and the amount of capital per worker (K / L), leveraging the growth. The technological progress exists when, using the same amount of K /

Sustained growth is related to the growth given in previous perspective

generations what you have received from previous, withdrawing present

192. China for more than three decades has been growing

191

192

Boeck, 2011).

220 |

CEIC / UCAN

(doubling of GDP every 9 years)193.

inequality in the United States194

more extensive (involving more sectors and regions) and more inclusive (covering

195.

193

Economiques, Groupe De Boeck, 2011.194 Kuznets, Simon – Economic Growth and Income Inequality, American Economic Review, nr. 49, 1955.195

Kuznets curve. However, those most critical of the relationship between economic growth

Sustainable Development, Institute Piaget, 2005).

KUZNETS CURVE OF SOCIAL DISPARITIES

0 4000 10000 14000 160000

0,2

0,4

0,6

0,8

0,3

0,5

0,7

0,9

0,1

6000 8000 120002000

GDP per capita

| 221


even with the rising of income per capita provided by economic growth. Cape Verde and Botswana are real case studies in this area of reduction of social

between 0.39 and 0.42 for Botswana, and the democracy index is 7.92 and 7.63 196 197

and good leadership198

by high unemployment rates in all age groups.

How does one raise the question of economic growth sustainability in

The basis for the analysis of the national economy, this view of the sustainability of its growth, is supported by the statistical report of the

between 2000 and 2017

6.2.4

2012 to 2017, it can be seen that the line of long-term trend is established around

196 Democracy Index 2011 , the Economist Intelligence Unit.197 UNDP – Human Development Report 2012 Africa Angola, on average for 2000 to 2010, had a Gini index of 0.59.198

of social inequality (0.26) and high indicators of transparency and good governance.

222 |

CEIC / UCAN

following chart is explanatory.

the capacity for long-term growth is evident in the 2009/2011 sub-period. However,

GROWTH TRENDS IN ANGOLA

2000 2 3 4 6 8 2010 12 16 170

10,00

15,00

20,00

25,00

5,00

5 7 9 11 14 15131

GDP growth rate Mobile annual average

Valu

es in

%

SOURCE: International Monetary Fund, Angola 2012 Article IV Consultation and Post Program Monitoring, August 2012

STEPS OF SUSTAINABILITY

0

5,00

10,00

20,00

25,00

15,00

GDP growth rate Mobile annual average

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

Valu

es in

%


| 223


where are the limits of growth sustainability. Unfolding the economy into the two

the revenue it generates.

trend of non-oil GDP. New gaps and capacity for growth must to be found in agriculture and manufacturing.

2000 1 32 4 6 8 2010 12 16 17-10,00

5,00

15,00

0

25,00

30,00

-5,00

10,00

20,00

Oil GDP growth rates

5 7 9 11 14 1513

2000 1 32 4 6 8 2010 12 16 170

5,00

15,00

25,00

30,00

10,00

20,00

5 7 9 11 14 1513

REAL GROWTH RATES OF NON OIL SECTORS


224 |

CEIC / UCAN

hence it is in tradable non-oil exports that must be found the basis to reduce

context, the quality of products for export and a network of companies with

external customers.

6.2.5 The tendency behaviour of GDP per inhabitant

used in this my reflection is the GDP per capita, in the absence of the Gini

-8,00

12,00

-6,00

-2,00

2,00

6,00

10,00

-4,00

0

4,00

8,00

Real oil growth rateReal non oil growth rate

2011 2012 2013 2014 2015 2016 2017

Rate

s in

perc

enta

ge


| 225


and

elites (political and business) in the access to opportunities and sources of enrichment. To distribute best depends not only on economic growth, because, as was pointed out, development and social progress have other ingredients that

Nevertheless, the annual increments recorded in trend line of GDP growth

between 2011 and 2017 by the reduced economic growth, to a more or less

ANNUAL AND TREND PERFORMANCE OF GDP PER CAPITA (%)

-20,00

0

-10,00

10,00

20,00

30,00

40,00

50,00

2001 4 8 12 16 172 6 2010 143 7 11 155 9 13

SOURCE: International Monetary Fund, op. cit.

226 |

CEIC / UCAN

A better distribution of national income, although it can happen – even though current inequalities are so deep that only a few decades may help

through almost negligible marginal increments in the improvement of living

not being changed – as long as they exist in the present dimension – it may be

Moreover, up to 2017 it will not be possible to reduce the structural dependency of the average oil revenue income per capita, given the weak muscle strength of the non-oil sector, as shown above. I.e. the expectative of GDP growth per capita between 2011 and 2017 is weak and, consequently, lowers the economy’s capacity to distribute more.

TREND LINE OF GDP ANNUAL INCREMENTSPC

2002 3 4 6 8 2010 12 16 17-10,00

5,00

10,00

0

15,00

20,00

-5,00

5 7 9 11 14 1513

DEPENDENCE OF GDP PER CAPITA IN OIL ECONOMY

-40,00

0

-20,00

20,00

40,00

60,00

2001 4 8 12 16 172 6 2010 143 7 11 155 9 13

| 227


only be around $ 200 per year.

But the issue is not merely in the dwindling income to distribute. The current

of knowledge and influences hard to penetrate199. There aren’t, therefore, guarantees that the largest share of the annual increase of $ 200 is not captured by the fringe of the richest.

6.2.6

in the process of economic growth200. The steady state corresponds to the point where the amount of capital per worker remains constant. This point corresponds

per worker. To the right of that point, the investment amount supplied by the

201.

Explained another way: steady-state or long-run equilibrium, product, capital and population grow at equal rates, where does not occur economic development measured by the growth rate of average income per capita202.

199 Although there are no estimates and studies on the real dimension of their spill-over effect, its relative expression can be presumed, precisely because of the nature of the national distribution and redistribution of national income.200

Economics, February 70, 1956.201 Jones, Charles I. – Introduction to Economic Growth, WW Norton & Company, 1998.202 Grace Job – Development Economics (Sebenta das Lições, UCAN), INIC, 2012.

228 |

CEIC / UCAN

the investment rate and the savings rate – the probability of a steady state in Angola can be seen in the following graph203.

physical assets and people, and keep the economy on a suitable route for improvement of the average per capita income.

which the industrial centres and regional and special economic zones can be an

6.2.7

Apparently, public investments have functioned as one of the levers of the country’s economic growth, having invested between 2000 and 2011 the

evaluated.

203

to a population growth rate of 4.4% in 2017.

PERFORMANCE OF POPULATION AND GDP

2001 2 3 4 6 8 2010 12 16 170

10,0

15,0

20,0

25,0

5,0

5 7 9 11 14 1513

Perc

enta

ge


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204 is low, probably due to:

Weak supervision.

Absence of feasibility studies.

Failure to meet the legal requirements of public procurement.

economic counterpart).

remaining shall not carry on yields much higher than the investment of the State,

surprising.

204

MARGINAL COEFFICENT OF PUBLIC CAPITAL (RETURNS)

-2,85

0,220,61

0,18 0,18 0,4 0,37 0,5

-1,08

1,15

0,41

2001 2003 2005 2007 2009 20112002 2004 2006 2008 2010


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CEIC / UCAN

Thanks to the re-infra-structuring program carried out by the Government, the capitation of public investment fell from $ 39 in 2000 to $ 460 in 2011. Aside from the quality of the works and their durability – usually a public work,

maintaining, it cannot last less than 20 years, to ensure macroeconomic return

2017, the State will invest 84,700 million, in an accumulated from 2000 to 2017 of 140 800 billion dollars. I.e., will invest more in fewer years (average annual investment of 4.7 billion for 2000/2011 and 14.1 billion for 2012/2017).

Final Notes

country’s growth capacity.

PUBLIC INVESTIMENT PER CAPITA (USD)

2000 2 3 4 6 8 2010 12 16 170

500,0

600,0

300,0

700,0

800,0

400,0

200,0

100,0

5 7 9 11 14 15131


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The annual GDP increases in per capita between 2012 and 2017 will be

not good for the improvement of the average income of the majority of the

We may be approaching the steady state of the national economy, in

will to reverse the current schemes of access to income.

growth will not have the convenient dimension.

of the economy – will be reduced to an average annual rate of about

the weight of the oil.

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7. REVIEW OF THE MAJOR ECONOMIC EVENTS OF 2012

January

2It was a hesitant birthday for the euro, a currency imposed for ten years in the pockets of millions of Europeans, and now, in face of the European

the single European currency erupted on January 1, 2002 in the lives of twelve countries of the Economic and Monetary Union, who had to say goodbye forever to the Spanish peseta, the French franc, the Italian lira and the German mark, among others. Currently, the Euro Zone encompasses 332 million people in 17 countries. In mid-2011, 14.2 billion notes and 95.6 billion coins circulated, with a value of about 870 billion euro, according to

European Commission.

5Sonangol, Maersk Oil Angola and other partners announced, on 4 January

waters of Block 23 in the Kwanza Basin. According to state oil company, the

to a total depth of 5 thousand 334 meters.

12

posts in perfect working order, of which 419 belong to Sonangol, as

Botelho de Vasconcelos said that The Ministry of Petroleum has increased

Sector.

13 Angola sold in 2011 approximately 8.32 million carats of diamonds, obtaining a revenue of 1.16 billion U.S. dollars, which represents an increase

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concessionary, Endiama-EP, sold 8.36 million dollars. A source close to

experience in recent years.

16The last IMF monitoring mission ended in what is the last planned review under the stand-by agreement. The team was headed by the director of

of the Ministries of Economy, Finance and Planning. The IMF mission also maintained contacts with the BNA, financial sector representatives, the

Mining and Industry, Joaquim David, and Secretary of State for Economic

21The State-owned agricultural mechanization company Mecanagro has

Chairman of the Board of Directors of that company. Carlos Alberto Jaime Pinto, who spoke at a press conference alluding to eleven years existence

27The Luanda Railways (CFL) collected more than 170 million kwanza over the past year, as a result of carrying a total of 2.86 million passengers in the system and suburban routes Luanda Luanda / Dondo / Luanda and Luanda /

money earned the CFL, adding to 121 million kwanza.

28The Minister of Finance, Carlos Alberto Lopes, said that between 2003 and 2010 Angola paid debts to its internal and external creditors to the amount of 2653 million dollars. According to the minister, only in 2003 State suppliers were paid $ 380 million. The following year, the State paid 271 million, in 2005, 354 million, and, in 2006, reimbursed 363 million dollars.

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million in 2009, and in 2010 it stood at 69 million.

28Sonangol Starfish, a subsidiary of the Sonangol Group, made its first discovery of traces of oil in the sea, in the Campos Basin, a block it had previously unsuccessfully drilled, the company said in a statement sent

discovery occurred in the pre-salt block, where traces of oil were found in

Agency, with 832 barrels per day and 1.6 million cubic meters of natural gas.

28

Minister. Gourgel Abraham, speaking at a dinner conference for Portuguese businessmen, sponsored by the Chamber of Commerce and Industry

February

3The International Monetary Fund (IMF) announced in Washington, the approval of a five weeks extension of the Stand-By Arrangement with

stand-by agreement of Angola with the IMF contemplated aid granted in

Trade between Brazil and the remaining seven states of the Community

approximately 4540 million dollars. Within the CPLP, Brazil is the assumed economic leader. In 2011, the Brazilian market exported 3.25 billion dollars

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4

the incoming and outgoing of currency. The document establishes at 50,000 kwanza the maximum amount that singular foreign residents and other can take out of Angola when travelling, this being the main novelty of that document.

9The National Service of Customs of Angola (SNA) has raised 5.2 billion

revenue has gradually increased, so that, in 2000, SNA collected 215.450 million dollars, even in the pre-reform stage. Among the main results of this process, stands out the broadening of the tax basis, the increment of new

18

was intended to confer the degree of implementation of policies and

supervision.

23

and was the source of 147 million euros in 2011, according to data released by the Bank of Portugal (BoP). In a year in which the total remittances by migrants remained almost equal to 2010, the amount sent by the

by the Portuguese in Angola were in 2011 already well above those received

States (130 million), Germany (113 million), Luxembourg (68 million) and Canada (40 million).

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24The National Statistics Institute (INE) collects about 14,500 per month, prices of about 240 products, including basic food, synthesized in the quarterly brochure of the institution, said the director, Camilo Ceita.

comparison of the main products sold in the country over a quarter. The 240 products are divided into 10 classes, including food, alcoholic beverages,

24

of 2,175 million tons of various products derived from hydrocarbons. This

Bela Fonseca, during a press conference.

24Angola was re-elected member of the Board of Directors of the Inter-Fund

of Governors of this UN agency, which ran from 22-23 February in Rome. In

26Angola has a total installed capacity of 120 thousand tons per year in the processing of scrap metal, said in Luanda the secretary of State for Industry, speaking on the sidelines of the Sounding Board on Scraps. Over the past

was to obtain a license to export scrap.

28The I Fair of Banana of National Production, that was attended by 120 producers from eight provinces, ended in Caxito, in an atmosphere of

ensured that all banana consumed in the country is produced locally.

March

1

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Last year Taiwan imported about 30 million barrels per day of Iranian oil, equivalent to about one million barrels per month. An agreement signed a

that Sonangol sold two million barrels of Nemba oil and a million barrels of Palanca oil the Chinese company Unipec, a subsidiary of Sinopec, also sold a

Cabinda to the U.S. company Conoco.

1

of bread, which led to adopt, last year, a program on the row of wheat,

for Industry. The program envisages the construction of bakeries, pasta

this, it is intended to create a value chain that, consequently, leads to the

6Angola in January figured second in the trade between China and the Community of Portuguese Language Countries, after Brazil, but before Portugal, according to figures from the Customs Service of the Asian country published in Macau. The numbers indicate that the volume of trade between Angola and China during the month of January was 279.171 million U.S. dollars, while that of Brazil was 633,859,000 dollars, and Portugal 32,751,000. The trade between China and the CPLP countries reached 9,262

and CPLP countries in 2011 amounted to 117,230 million dollars within the frame of this same trend.

6The capacity of production and distribution of electricity in Angola will grow in the next four years, thanks to an investment of 16.5 billion U.S. dollars, to accompany the expansion of the industrial and residential demand. The investment was announced by The Minister of Energy and Water, João Baptista Borges, who also mentioned plans to increase the

Economist Intelligence Unit (EIU).

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9Sonangol and Caixa Geral de Depósitos (CGD) investment bank will open this year, according to statements by the President of the Board of

Portugal.

12Angola is among the priorities of the injection of investments located between billion and 1.2 billion euros per year that the Portuguese oil company Galp Energia want to implement between 2012 and 2016, as announced by the company’s president. Manuel Ferreira de Oliveira said that, alongside with Angola, other priorities of the company are Mozambique and Brazil, and that the main target of such amounts (from

12The works of the Gobabis International Logistics Park, an infrastructure

Cubango and Cunene, under a program that aims to create direct economic

the Community for the Development of Southern Africa (SADC), it is the initiative of the Namibia Angola Housing Initiative (Naahi) and has the participation of other international companies, such as NAIS (Namibia), GEOPLAN (Germany), ESG (United Kingdom), TECTUS SERIES (Finland), BVI (South Africa), EMCON (Namibia) and SPC (Namibia).

12

of the monetary law, framed in the Exchange Law 5/97 of 27 June, and of

authorized to perform the control of input and output currency in their

14The final report of the research unit of British Economist Intelligence Unit (EIU) considers that the potential of Angolan pre-salt, where were

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operating in Angola and the Executive, since the findings may mean an

14

the management of major Portuguese groups. The Angolan oil company is

GALP.

15The World Bank (WB) has urged African countries to abolish commercial barriers with neighbouring countries to fulfil economic integration and increase commercial revenue. A report by the World Bank, referred by

the continent of new sources of economic growth and new jobs, and

16Angola will have in 2012, nine more airports recovered and modernized,

Uige, Saurimo, Menongue, Luena, Cuito Cuanavale, Cuito and Namibe,

21The Ministry of Agriculture, Rural Development and Fisheries will hold in the next year a census in the farming sector, in partnership with the United

data on agriculture and livestock in the country.

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21The State intends to take, progressively, the informal economy to the formal

such as the Law of Micro, Small and Medium Enterprises, the program to support small businesses, the readjustment of the legal regime of the

Luanda by The Minister of Finance, Carlos Alberto Lopes

23The Ministry of Energy and Water, in an allusion to the World Water

23Economic growth in Africa has seen a significant slowdown in 2011,

Commission for Africa (ECA/UN) and the African Union Commission (AUC).

27The Kingdom of Spain has available 500 million euros for entrepreneurs

Spanish Embassy Counsellor in Luanda, Manuel Sanchez Melero. The

the Kingdom of Spain, in 2011, amounted to one billion euros.

28The modernization and expansion of the Commercial Port of Lobito,

dollars, according to the chairman of the board of directors of the port company, Anapaz, of Jesus Neto. The manager, who was speaking at the

th anniversary of the company, said that the funds are

of ores, built on the right bank of Lobito Bay. The expansion of the bridge pier will allow in the near future the simultaneous berthing of 12 ships, against the current eight, and is part of the investments that are being

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unloading of containerized goods and for other port services. The port unit will handle, on average, 11 million tons per year. As for containerized cargo,

000 containers per year.

27

lines were rebuilt along the last ten years, with thousands of kilometres of

by the in its latest report on Angola. Now, writes

merging of Benguela Railways (CFB), Luanda Railways (CFL) and Moçâmedes Railways (CFM).

29The Angolan airline TAAG signed with a contract for the acquisition of three Boeing 777-300ER, with which will reduce significantly the average utilization of existing devices on intercontinental routes, as stated by the President of the Board of

at 600 million dollars, in the routes of Central Europe, United States and, eventually, in the strengthening of other frequencies already established.

30The Dutch airline KLM started to operate direct links between the International Airport 4th of February (Luanda) and Schipol airport in

frequencies.

31The Incentive Plan to Trade in the Rural Community, established in 2010 under the Programme to Combat Hunger and Poverty, plans to

shortages of funding and long-term capital. According to a document from the executive commission of the program, called Comprehensive Plan for Trade Development and Rural Entrepreneurship (PLAIDENCOR), the

production, consisting in the creation of micro, small and medium-size

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businesses in the whole country. To guarantee its success, the Angolan

31Angola is looking to China to export Angolan ores, which could increase and

ambassador to China, João Garcia Bires. The diplomat considers possible the export of iron ore and copper, among others, receiving in return, from China, machinery and other instruments useful for pursuing the program of development of Angola.

April

2

Kwanza. Porto Amboim Shipyard (PAENAL), began to be erected in 2007 by a company enrolled by

Korea, occupies an area of 23 hectares and is seen as an asset to the country’s

3The hydroelectric dam of Calueque, Ombadja district, Cunene, built in 1974, will be renovated and expanded this year, and the consignment act to start the works was signed on the weekend in a ceremony led by The Minister of

3

energy and water over the next decade, to achieve the level of infrastructure

Bank, released in Washington. In the study , published by World Bank, the researchers Vivien

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10The Prime Minister of São Tomé, Patrice Trovoada, announced that the Sonangol Group, through its subsidiary for aviation, Sonair, participates

Speaking to Angolan journalists in São Tomé, the minister said that Sonangol

training, with the possibility to expand to other sectors.

12

in projects of infrastructure, energy and industry, said in Brasilia the

is based on a very dynamic economic component, as more than 66 Brazilian companies invest in the Angolan market, turning Brazil into an important

Brazil, that exceeded 460 million dollars, the investments of Brazilian businesses in Angola, which reached 1.4 billion dollars, and more than 66,000 Angolan citizens who travelled to Brazil for various reasons. In 2011, The Minister of Development, Industry and Foreign Trade of Brazil, Fernando Pimentel, said that his country had open a line of credit to Angola of over 5 billion dollars.

14The company Basali Ba Liseli Resources of Zambia plans to build a pipeline

informed the Zambian agency for investment promotion. Zambia, the main African producer of copper, imports all its fuel requirements from the Middle East, through the port of Dar-es-Salaam, capital of Tanzania.

14Incoming long haul shipping has been, almost exclusively in the last ten years, operated by foreign companies, said in Luanda the head of the Department of Merchant Shipping, Tiago Neto, and Angolan companies are

by sea, he referred that foreign ship owners began to dominate the Angolan

19

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CEIC / UCAN

and consumption, informed the President of that State body, Gomes Cardoso. Gomes Cardoso said that the Codex Angola intends to accelerate

20The next ATM cards to be provided by Company Interbank Service (EMIS)

said in Luanda the company administrator, José Gualberto Matos. This pretension of the company, according to the manager, is to provide the user with greater safety and prevent the card from being cloned. The Company Interbank Services (EMIS), registered in 2011, through the network

the Board of Directors of EMIS, Pedro Puna.

26Oil minister Jose Botelho de Vasconcelos, announced that the project for

that exports will target buyers in Europe and Asia, where prices are higher.

28

Henda English, revealed in Luanda that only 13 public companies presented

overdue accounts. Henda English reported that this universe of 13 public institutions includes

- The President of ISEP revealed that of the

accountability for the economic years 2009 and 2010.

28Angolan minister of Agriculture and Rural Development, Afonso Pedro,

to his Congolese colleague for Fisheries and Aquaculture, Hellot Mampoua Matson, on behalf of The Minister of Agriculture and Livestock, Rigobert Mamboundou.

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May

3The Director-General of Catoca Mining Society (SMC), Ganga Júnior, informed that the company plans to explore, in the coming years, diamonds in the Democratic Republic of Congo and in Zambia. According to the director, who spoke about the day of the miner, celebrated on 27 April, the prospect falls within the company’s program of strategic development for the next ten years.

4

sold to China, up to March, 9.5 million tons of oil, down 4.7 million from Saudi Arabia and 2.4 million more than Russia, the third largest supplier. Venezuela ranks fourth, followed by Iraq, Iran, Oman, Kuwait, UAE and Brazil.

7The Minister of Agriculture and Rural Development, Pedro Canga, revealed

9The mobile operator Movicel launches soon in the market the most

China’s ZTE. In the Angolan market since 2003, the operator invested 100 million dollars in this project, as reported by BBC News.

10

thousand barrels/day, informed The Minister of Petroleum, José Botelho de

oil/day. The minister assured that, with the establishment of the Lobito

16 percent, and will also occur an increase in added value to the sour and heavy crude produced in the country.

12The Minister of Finance, Carlos Alberto Lopes, said in Luanda that the

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Minister of Finance, who spoke at a press conference on the balance of the

2010.

June

13

companies to invest, according to the (EIU). In its

15The Minister of Agriculture, Rural Development and Fisheries, Afonso Pedro Canga, inaugurated in Luanda the Central Agro-food Laboratory, an

samples.

17Sonangol has issued a press release which states that the process for

, with 1, in Block 21, and Maersk, with Blue 1, in Block 23, the oil industry and

resources. Sonangol confirmed that, as national concessionary, in 2006 selected Maersk as operator of Block 8 and 23, in 2010 selected Cobalt for Blocks 9 and 21, and for Block 20 in 2011.

17The Ministry of Economy launches brand Made in Angola, the Talatona

aimed at boosting national entrepreneurship, informed the economic advisor to the economy minister, Licinius Contreiras, at a media conference.

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22

Alberto Lopes

23

and Dondo, in the scope of the recovery program of the country’s railways. During his speech, the minister said that, in the province of Luanda, there are still 19 stations to be inaugurated, making up 28 in total, while at

25Cargo transportation in Luanda Railways (CFL) already generates some

stated in Dondo the President of the Board of Directors, on the occasion of the inauguration of nine stations. Lobo do Nascimento said that the opposite happens with the transport of passengers, where profit isn’t

Railways are needed, compulsory and are provided within the availability of

cost 30 kwanza, inter-provincial cost 1.500 and cargo pays the market price.

25

Language (CPLP) recommended in Luanda that national governments take decisions enabling technological development in this sector. The final statement, read at the closing ceremony of the 5th CPLP Statistics Conference and the meeting of the presidents and senior directors of statistics institutes of the community, also called for the adoption of

to deserve the trust of the public.

26One pole of development of agro-livestock begins to be erected in September in the village of Senje, Chongoroi, announced the provincial governor of Benguela. Armando da Cruz Neto, who spoke to local

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(PIP) Executive, designed to stimulate production with a view to self-

29Angola will feel the impact of the entry into force of the new exchange rate regime for the oil sector in 2013, with the increase of the stock of the means

Bank of Angola (BNA), Ricardo Abreu. The new exchange rate regime, approved in late 2011 by Parliament, was established on the oil companies

this measure.

28The Community for the Development of Southern Africa (SADC) announced

the SADC, linked to the sector of regional infrastructure, that prepares the conference of ministers expected in Luanda. For the transport sector, 12 projects are forecasted, some of which ongoing, such as building of a

this year and expected to end in 2014. Projects to modernize the Huambo airport, which will facilitate the air link with other parts of the southern region of Africa. Also the Lobito Corridor, that links by road and rail Angola,

planned for 2014 and 2016. Both are valued at 440 million dollars.

29

projects, in the Lunda provinces, resume their production year, as announced in Luanda by the president of the Board of Directors (PCA) of

30The Priority Action Plan of Development of Southern African Countries

| 249


provided indicates that this sum is absorbed in expansion projects of expansion of the electricity network of member countries. The Plan of

Zimbabwe, Zambia, Botswana and Namibia.

July

9The Business Forum of the Community of Portuguese Language Countries recommended that Member States establish a strategic alliance for

leaders, experts and entrepreneurs of Portuguese speaking countries, who attended a business meeting in Luanda, considered important the development of information sectors of technology, agriculture, infrastructure, energy and tourism, as well as the establishment of

the establishment of a venture capital fund, a model that is under study, and

CPLP companies.

11

2012 between 17 and 22 July, with the presence of more than 35 countries,

of the Board of Directors of FIL, Matos Cardoso, 700 exhibitors will be an

14

the President of the Board of Directors of the Angola LNG Project, of

alternative in relation to the burning of the associated gas, this project

the city of Soyo, Zaire Province, and is a partnership between xxonMobil .

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16The U.S. ambassador in Angola, Christopher McMullen, considered in Lobito, Benguela, that the Commercial Port of Lobito is a strategic venture for the southern area of the continent, that will accelerate the rapid development of Angola and neighbouring States.

18The Minister of Geology, Mining and Industry, Joaquim David said, at the

commercial exchanges guarantee a level of sustainable development of the countries and provide stability to the economy.

19The ocean freight of containerized cargo imports reached in 2011 the equivalent to 120.5 billion kwanza, as revealed The Minister of Transport, Augusto Tomás, during the inauguration of the National Scholarship in Shipping (BNF). This value corresponds to the importation of 421,052 containers, an amount above the one imported in 2008, when 380 280 cargo containers entered the country.

21

in London. ALM’s shareholders are , with a BP

, and .

26

increases the bank’s capital from 50 to 100 million dollars. The President of AAA Assets, São Vicente, informed that the joint venture will permit the company to diversify its investments, develop the sale of its products and

26The French oil company

27The Director-General of the Catoca Mining Society (SMC), Ganga Júnior,

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mineral concessions of the company, which operates in Lunda Sul, Lunda Norte and Kwanza Sul. Ganga Júnior added that the company is working on

27

research technicians, are among the recommendations from the first

28A significant reduction of hotel prices may provide the balance in the

of the Southern African region, said in Luanda The Minister of Hotel and

Forum for tour operators, acknowledged the problems faced by customers and tourists, ensuring that the Tourism Master Plan will allow the

30

with high yield potential, and plant breeding improvement based on

by the international agreements subscribed in sphere of phytosanitary

31

boundary requires an investment of two billion dollars, said in Brazzaville the spokesman for Chevron. Katia Mounthault-Tatu claimed that the

for its operation, with proven reserves of 70 million barrels of oil, are divided equally between Angola and Congo, under an agreement signed in

31

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CEIC / UCAN

The Minister of Planning minister, Ana Dias Lourenço.

31The National Directorate of Inspection and Investigation of Economic

August

3

year, announced the Customs Services of that country, adding that bilateral trade reached 1.99 trillion kwanza (19 900 million dollars). The Customs

(16,540 million dollars). This was due to Angolan sales to that country

4

of inconsistencies observed on fiscal accounts between 2007 and 2010,

assessment of the economic performance and post-program monitoring

8The currency of Angola, the kwanza, is expected to remain stable against the dollar in the next two years, with the recent doubling of Angolan

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foreign reserves providing the Central Bank with the means to defend

reserves reached in May the maximum of the past two years – 33 billion –

EIU in its latest report on Angola.

9The oil company BP Angola held in Soyo, Zaire Province, a public

Angola LNG Project is located at a depth between 700 and 1800 meters, in an extension of 56 kilometres. The study on environmental impact was conceived by a specialized company and, at this stage, it aims to raise the

9The Minister of Economy, Gourgel, Kwanza, and the Bank of Investment

of micro, small and medium enterprises. The Economy Minister and the leader of the Company Kwanza Project Management Company, of Kwanza Investments Bank, Alvaro Jorge Mendes, signed an agreement that marked

out the provision of stable funding for long-term financing to start the expansion of Angola’s MSMEs.

15

provided in Lubango by Transport Minister Augusto da Silva Tomás. On

Augusto Tomás said that the investments consisted in the acquisition, construction, rehabilitation and modernization of railways, carriages, wagons, stations and bridges. The official stressed that the investment covered the provinces of Namibe, Huila, Kubango and other regions covered by Moçâmedes Railways.

15A total of 30 billion kwanza is being invested in the acquisition and assembling of equipment on the Bio-energy Company of Angola (BIOCOM)

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18The National Agency for Private Investment (ANIP) signed, from the beginning of July to 16 August, 16 investment contracts valued at 345 million dollars, as announced by the President of the Board of Directors, Maria Luísa Abrantes. The head of ANIP said these contracts are linked to

18The Ministry of Commerce launched in Luanda the census of existing wholesale commercial businesses in Angola, called CECAng, which points out the existence of 5,952 companies that employ 52,866 workers. The Minister of Commerce, Idalina Valente, said that the census aims to

21

trade with Angola increased from 300 million euros in 2009 to 1.7 billion in

of Angola (Huila-Expo), the diplomat reported that annually, exports of various goods from Angola to Italy have been increasing.

21

24

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31

provision of financial services across the country, through mechanisms

financial system. The law was published in the Official Gazette No 160, Series I, of 20 August 2012 and is available for review on the Internet site of

September

1Transport minister, Augusto Tomás, inaugurated the new domestic departures terminal of Luanda, which has 25 check-in counters, with the capacity to handle two million passengers per year. In peak hours, the domestic terminal can accommodate one million passengers, a number

2The Angolan government program that aims to support micro, small and medium enterprises (MSMEs), called includes bonus credit

by the Director of support to the economic development of the Ministry of Economy. According to Mara Almeida, 2.5 billion kwanza were made available for subsidized credit lines. The credit is provided with bank resources and the State subsidizes the interest paid by MSMEs. The maximum annual interest

term is seven years, with a grace period of six months.

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11

Bank of Angola. The new monetary framework introduced by the Central

13

Lopes, considered that the Angolan market recorded in the last seven years

the growth and development of the economy. André Lopes, who spoke at

stated that from 2005 to 2012 the number of banks increased from 11 to 23 and opened 1,100 branches throughout the country. Similarly, the

20The National Customs Service (SNA) raised to the category of Customs Delegation the SONILS Customs Post, located at the Port of Luanda, in

of the Angolan economy facing the oil sector. In the process framework

Maria da Conceição Matos, inaugurated the premises of the SONILS customs

together thirteen compartments built in two buildings.

21The Committee for Development Policies of the United Nations Social Council (UNCTAD) announced in Geneva that Angola became a candidate

Income. By the fact, Angola was recommended by UNCTAD to work with

taking into account the macro-economic Social progresses and social achievements.

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25The National Fuel Society of Angola (Sonangol) and Maersk Oil Angola announce the discovery of oil in Block 16, with the drilling of the well

27

in the Congolese capital. The 10-storey building with 7535.53 square meters, will be built in the center of Brazzaville. Founded in 1987 in Lagos,

and management strategies in all areas of the oil industry, to allow members

namely South Africa, Angola, Algeria, Benin, Chad, Cameroon, Congo, Côte d’Ivoire, Egypt, Gabon, Ghana, Equatorial Guinea, Libya, Mauritania, Niger, Nigeria, Republic Congo and Sudan.

27Half of the projects implemented in Angola under credit lines of 3.2 billion

, which

and Social Development has funded 65 projects for Brazilian companies in

source refers, Odebrecht counts with part of a new bank credit line in the amount of two billion dollars.

27

an increase of 193,600 barrels daily, compared to 1.655 million barrels per

the OPEC member that recorded the largest monthly increase in real terms,

2.179 million barrels per day.

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October

1

Investment (ANIP), Maria Luísa Abrantes, analyzed with businessmen and congressmen from the U.S., in Houston, investment opportunities in Angola. Speaking at the Texas/Africa Biennial Business Summit, in a panel on sustainable investment in Africa, she highlighted the sustainable development actions of the Angolan government, particularly in the construction and reconstruction of infrastructure such as roads, railway lines linking Angola neighboring countries, which will facilitate trade in the region, among other advantages.

2 The Angolan company Condis, in partnership with the Portuguese group

chain in the provinces of Luanda and Huambo. An investment contract worth ten billion kwanza was signed in Luanda by the Chairman

Condis

territory.

3More than 80,000 families will receive support for the agricultural year 2012/13 in the Cunene province, with a view to promote the activity in the region, said the local responsible for the Agrarian Development Institute (IDA). The responsible announced that were prepared for the growing season, which begins in November, seed of corn, millet, sorghum, and fertilizer and tools. He explained that these families are supported under programs of Extension and Rural Development and Agricultural Development that predict the distribution of seeds, fertilizers, hoes,

4

next 15 years, of 600 million jobs around the world, especially in Africa and

in the foreword to the WB 2013 Report on World Development, that in the current global economic crisis around 200 million people worldwide are unemployed and 75 million of them are less than 25 years old.

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4Moçâmedes Railways (CFM) predict that it will carry annually one million passengers and three million tons of goods, said to the press the president of the board of the company.

5

jointly with AfDB, UNECA and UNDP.

5

Tourism and the Luanda International Fair (FIL). The promoters of the

10

BNA Bonds will now pay a tax of ten per cent, as announced by the jurist

since low income, such as a salary of 50 000 kwanza, for example, is subject

10BP Oil plans to invest in the next ten years about ten billion dollars in Angola, said the vice president of the company, Paulo Pizarro. He said BP

projects to duplicate the amount in the next ten years, by the country’s oil reserves and due to its economic and social stability.

10The Society for the Development of the Special Economic Zone Luanda--Bengo (ZEE – EP) created, in the three years of its existence, more than

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5000 direct jobs, announced in Luanda, at a press conference, the President of the Board of Directors. António de Lemos said that in this period were

State.

11The African economies recorded a robust growth, despite the worldwide deceleration, states the World Bank (WB) report, released earlier this month. Data from the WB point to the need for countries to use the wealth from oil, gas and mineral sensibly. In addition, it forecasts a growth of sub-Saharan Africa, in 2012, of 4.8 per percent, keeping, in a broad sense,

economy.

18The Angolan banking sector recorded in 2011, an accelerated growth rate in

22

in the city of Lobito, during the opening of the first national treasury

new banknotes and will also be returning to the market metal coins to diversify small change. The BNA wants to introduce the circulation of

23The private company of the capital of Cape Verde telephone operator T Mais, PANA in the city of Praia, learned. In a statement,

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25Deposits of phosphate rocks were discovered in the province of Cabinda, which correspond to 380 million tons, said in Luanda the responsible for the company . The work in the mines will start at the Cácata deposit, 80 kilometres from the city of Cabinda, for it is a region that has the purest reserves and that allow, through simple processes, to produce

800 000 tons of phosphate rock.

26

Angola.

26The National Fuel Society of Angola (Sonangol) became the largest shareholder of Banco Comercial Portuguese (BCP), when it increased its

secondary market. Sonangol, which has authorization from the Bank of

in BCP to 2900 million shares, worth, at market prices, 235 million euros.

26Sonangol will soon open a bank of mortgage loans to facilitate the purchasing of houses by their workers. It is the the Savings and Housing

signal to open doors. According to the information released of the 9th

group, and will have the primary mission to grant housing loans to the workers of Sonangol EP and its subsidiaries and the extension of the scheme income resolvable to the real estate market.

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29The chairman of the board of directors of the Angolan Customs Warehouse-

30The creation of a fund in Angola will help reduce the exposure of the Angolan economy to fluctuations in oil prices and create conditions for

in the majority, from the sale of minerals and oil, the Fund will be managed by a board of administration with three members, chaired by Armando

31

in 2010, of the SADC ministers, that addressed the reduction in the

Communications (INACOM), Pedro Mendes de Carvalho, said that this

and economic factors, and technological developments were analyzed, and

November

1The volume of trade between Portugal and Angola reached four billion dollars, only in the non-oil sector, revealed in Caxito ambassador João da

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governor João Bernardo de Miranda, and guaranteed that there is great interest by companies in his country to invest in Angola, mainly in the areas

2

6

agricultural research center in the town of Mazozo, province of Luanda. The

of Trade, Li Jinzao, were the signatories of the agreement, which will allow

Angola.

7The Diamond Trading Company of Angola, SARL (SODIAM) will be

market of diamonds. The announcement was made by The Minister of Geology and Mines, Francisco Queiroz, during the visit to the De Beers

were produced in 2011, which yielded more than one billion dollars, with

9

in Luanda, in a ceremony presided by The Minister of Economy, Abraão Gourgel. According to a statement from the Ministry of Economy, the IFE

and administrators Nadia Eloy Cruz and Oscar Rodrigues. The is the State’s indirect organ of administration,

9The Minister of Oil, Botelho de Vasconcelos, considered important the

curriculum programs for the training of solid professionals, capable of

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said that the oil industry students, in joining schools of engineering, should study subjects such as Earth Sciences, Geology and English Language as a source of easy access to knowledge. The Ministry of Oil has supported and

10The specialist of the Executive Project for Tax Reform (PERT), Osvaldo Macaia, praised in Luanda the dynamism of Tax Courts, an action that

room, within Customs . Osvaldo Macaia stressed that the process, under

13

company Unitel, the group informed in a press release. The network will help Unitel to respond to the growing demand for broadband services and high resolution, such as HD video, Internet access at high speed, cloud

statement.

13

Commerce. The provinces of Luanda, Malanje, Benguela, Huambo, Bie,

According to the master plan of the Ministry of Commerce, it is being

funded by Spain.

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15The Assistant Secretary of State for the U.S. Treasury Department, Neal Wolin, assured in Luanda the strengthening of the technical support to

since it provided information about the creation of a Financial Unit in Angola, whose purpose is to combat money laundering and terrorist

15The Minister of Agriculture, Afonso Pedro Canga, inaugurated in the

scale, a ceremony that marked the official opening of the agricultural year in the whole country. The Longa Agro-Industrial Farm represents an investment of 7.6 billion kwanza and occupies an area of 500 hectares. It will annually produce 15,000 tons of rice. The farm has generated 1,400 new jobs, especially for youth of the Longa commune.

16

Luanda. By the third quarter, the catch of mackerel was around 300 tons, an

mackerel.

17 has announced its

oncoming entry into the Angolan market, with investments of 120 million

revealed plans to build in the coming years, in Luanda a five star hotel

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19

(PIF) begins in January 2013, as announced by the provincial governor of Cabinda, Aldina da Lomba, speaking on the sidelines of the opening of the

select the companies that will undertake the works of infrastructure and the

of the Executive that dates from 1998, budgeted at 3.6 billion kwanza,

Provincial Government of Cabinda and some private companies. Situated in the Malembo plain, 30 kilometers north of the city of Cabinda, the project occupies an area of 2,345 hectares, of which 112 hectares correspond to the

19The Angolan micro, small and medium enterprises maintain a low contribution towards the Angolan formal entrepreneurial, participating

of Economy, Abraão Gourgel. The minister was addressing a conference

21

of African Airlines (AFRAA), in the annual general meeting of the organization held in Johannesburg. According to a statement from the

Pimentel Araújo, chairman of the board of TAAG.

23The Angolan banking sector, in 2012, maintained its growth trend,

growth rate was lower than in previous years, as emphasized the study by KPMG, published in Luanda.

26

2013, to decongest the port of Luanda, said a source at the Maritime Institute and Ports of Angola (IMPA). The Commercial Port of Barra do Dande will have nine specialized terminals – fishing, multipurpose and general cargo, storage, cement and containers, dry and liquid bulk and

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motor vehicle terminal will receive 104 units, and the containers terminal, with 20 feet, has an annual capacity of between 300 and 850. The source of

depth, can be extended in the future.

27The amount necessary to recover and build the national rail network

. Teresa Muro said that the money is destined to the execution of 10,600 miles

the port of Barra do Dande and the future airport of Luanda .

29Angola ends its term as Executive Secretary of the Inter-African Coffee

more than 13 years ago, announced in Luanda a government source.

30

similar to the primary roads, to improve the binding of provincial capitals

clay and stop-gaps), being carried out normally by small local companies with expertise, in order to foster employment to the population. The

approach, with support of provincial road departments.

December

1The Ministry of Transport closed, in the city of Lobito, province of Benguela,

and strengthening of the economy in Southern Africa. The conference was

and experts from Angola, the Democratic Republic of Congo (DRC) and

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Zambia, interconnected to Benguela Railways, which, with other transport systems, integrate the Lobito Corridor. During two days several topics were

Airport and the logistic platforms, as well as the environment and the

5The Secretary of State for Finance and coordinator of the Executive Project for Tax Reform (PERT) announced that structuring alterations

reducing the dependence on the oil sector, with a view to a harmonious

11

equipments to support the oil and gas industry, an investment of 175 million dollars. The contract between the National Private Investment

Maria Luísa Abrantes, chairman of the board of directors of ANIPA. The factory will be built in Soyo and will employ more than 200 young Angolan

growth, and the needs for equipment are ever increasing.

14The Minister of Finance, Carlos Alberto Lopes, said in Luanda that the proposed State Budget (OGE) for 2013, approved by the Council of

Plan 2013-2017. On this occasion, Carlos Alberto Lopes explained that the

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over the years, had the first official stone (launched by Vice-President the Republic, Manuel Vicente) on the 10th of this month. The act can be

newspaper

value of around 8 billion. Later, several statements implied that the value of the project was precisely one of the key issues in the sustainability of the

The Norwegian oil company Statoil expressed in Luanda its availability to contribute to the increase of the technical competence and development

President of the Republic, Manuel Vicente.

20, a global oil company that operates in the Midstream and

31

of performing their assignments. Throughout this period, the Executive paid that company, for advisory services and technical assistance, about 31.8 billion kwanza. In contrast, the State obtained, in those years of the

kwanza per year.

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8. MONOGRAPH OF THE ECONOMIC SITUATION IN HUAMBO

extension) and its capital is the city of Huambo. It is located in the Central

Huila province, west by the province of Benguela and northwest by the Kwanza Sul province.

The climate is tropical of altitude, with a dry and cool season which accentuates in the months of June and July, reaching temperatures as low as

rainfall is constant, with an average annual rainfall of 1400 mm, registering some episodes of uninterrupted rain for 72 hours, and raining for approximately seven months of the year, with frequent falls of hail. The average annual temperature is

In the province abounded predominantly medium-sized trees that supplied

forests, especially on soils and forests, causing environmental degradation,

energy, including wood, which was obtained from the indiscriminate felling of trees, causing a true oriented ecological crime. Thus, the provincial government,

1000 000 trees. With this program, it is expected that in the shortest amount of

took refuge in other areas.

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jaguar and wild cats, and countless large, medium and small antelopes, hares

and poisonous character, as the alligator, the mamba snake and the surucucu, once inhabited the region’s lakes and rivers. A countless number of small animals

tchimbanduas, the famous yellow canary with red eyes of anhara (savannah), exotic butterflies, the matrindindes and grasshoppers plagues that devour everything in passing. At a distance of 20 kilometres from the city, there is the

three important rivers, the Cunene, the Kuvelai and the Calonga, and is known as

is located in Morro Moco, in this province, at over two thousand metres, and from this area irradiate numerous rivers and streams towards the coast and neighbouring countries.

In the subsoil of the province there is, to be exploited, manganese in the

minerals in some regions of the province.

Administratively, the province consists of 11 municipalities: Bailundo, Caála, Chicala Choloanga, Chinjenje, Ecunha, Huambo, Londuimbali, Longonjo, Mungo and Ucuma and Cachiungo, and 37 communes. Institutionally, the organizational structure of the Government of the Province of Huambo is conformed to the Decree Law No 17/99 of 29 October (Organic Provincial

No 27/00 of 19 May, paradigm of regulation of the Provincial Governments,

Communes.

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The province’s population is estimated at 2,454,875 inhabitants, which 205. Huambo was the

was later to be occupied by the province of Luanda.

order to overcome current economic constraints and return to the province its

Programme (PIP) of 2012 included a set 81 projects that are distributed according to the chart below.206

205 In accordance with the Report of Activities undertaken during 2012 by the Huambo Provincial Directorate of Planning, the activities relating to the cartography of the province of Huambo ended on 25 November 2012 and thre was the need to support the

technical groups, at provincial, municipal and communal level. According to that report,

Pilot Census itself happens in May, in the commune of Luvemba, Bailundo district.206

the population.

SOURCE: Report of Activities undertaken during 2012, Huambo Provincial Directorate of Planning.

DISTRIBUTION OF PMAOSSBP PROJECTS206 2009 PER SECTOR

Prog. Prim. Secondary Teach. Dev. Prog. Improve/Increase. Cap. Hospital Serv.Prog. Terr. Plan., Urb./Housing Dev.

Other Programs

19,54%

2,82%

18,84%

11,52%

4,58%

20,29%

14,54%

1,20%6,67%

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The program focuses primarily on the activities and projects of social

other programs.

quotas made available by the National Treasury for the year 2012 were not

of Huambo.

Agriculture and livestock

Known as one of the cellars of Angola, agriculture and livestock represent

in the stability of the country’s industrial park, predominantly for the food processing industry. The agro- livestock includes two sectors, the traditional and the entrepreneurial. The traditional sector or agriculture encompasses

and reindeer potato. They follow relatively primitive practices, methods and

yield of 1.79 tn / ha, as shown in the following table.

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CULTIVATED AREA, PRODUCTION AND YIELD OF VARIOUS PRODUCTS

Corn(ha)

Massambala(ha)

Wheat (ha)

Beans(ha)

Peanuts(ha)

Macunde(ha)

Potato rena (ha)

Cassava(ha)

Soya(ha)

Vegetables(ha)

Areas 598.053 24.853 26 227.443 12.116 2.593 22.662 20.273 10.938 22.026

Revenue (ha) 0.38 0.25 0.25 0.12 0.15 0.15 3 6 0.17 2.9

obtained (ton) 231.489 6.212 6.5 27.316 2.098 398 68.916 121.638 1.907 63.914

SOURCE: Report on activities undertaken during 2012

maize, Caála, with 74 926 of 26 224 of corn and beans, Bailundo with 53,294 and Longonjo with 27 167 of 22 206 of corn and beans. About the acreage and yields

In order to complement the information on the agricultural sector, it is

Environment in Huambo, which assesses the vulnerability of two of the eleven municipalities of the province, Bailundo and Caála. This study indicates that during the 2011/2012 growing season, a large majority of households were not able to surpass the acreage in 1 ha. For the agricultural year 2012/13, there was

which was the most affected. Consequently, the reserves of food of the

4 months, i.e., from the last month of June 2012 of the 1st harvest season. The

period of scarcity, between October and March 2012.

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and increase household incomes. It is also important the development of small

sectors.

EFFECTIVE LIVESTOCK IN THE TRADITIONAL AND IN THE BUSINESS SECTORS

Municipality Pigs Sheep Goats Birds75.699 1.407.674 5.319 984.276 4.648.060

Business Sector 27.661 159.516 – – 260.335

Grand total 103.360 1.567.190 5.319 984.276 4.908.395

SOURCE: Report on activities undertaken during 2012

Food safety

In the context of the agricultural sector in the province of Huambo, it is important to note the data from another study conducted by ADRA, also about

data available and analysed indicate that all of the individuals surveyed consume

without recourse to the

in the market because their harvests last a short period.

Given that the crops that mediate one agricultural season from another typically occur between June and August (mainly in the central highlands of

acquiring production capacity to meet the challenges of the next campaign. Already, at most, they can only meet their food requirements from their

plots, etc.).. The numbers of the study by ADRA show that the percentage of the

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noted that

Rice tends to be consumed more than the , since the number

108.00 (average price of 1kg of rice).

period of April to July 2012, the average price of one litre of vegetable oil was kzs.

in that period ranged between kzs. 175.00 to 450.00/kg, and the price of fresh

feed local families.

All households consume the leaves of various plants, such as beans, squash or manioc, either from their own production or even from the market. As

however, producing this product. According to ADRA study data, except for one of

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average amount of 195kg which may have the average price of kzs. 650.00 per kg. The price depends on the type and quality of the meat. Of those surveyed,

food security in the Huambo province is translated in the following table.

SECURITY IN THE PROVINCE OF HUAMBO

ClassificationIntervals F % Meaning

0 18 7,5 Food security

1 a 5 51 21,25 Mild food insecurity

6 a 10 57 23,75 Moderate food insecurity

11 a 15 114 47,5 Serious food insecurity

Total 240 100

SOURCE: Study on Food and Nutrition Security in the optics of Access and Consumption,

October 2012, ADRA – Action for Rural Development and Environment.

in the category of households that currently do not have poor access to food, in quantitative or qualitative terms, nor have fear that food will be lacking

management measures to ensure that the available food can last longer. One

of meals. According to the survey data implemented by ADRA in the months April to July 2012, households that decreased the amount of food in their meals, lack

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of food (at home and in mining) and money to buy food is distributed according to the table below.

Answers related to reducing the amount of food in meals of children under 18 years old, due to lack of food reserves (at home and in mining) and money to buy food in the months April to July 2012.

Categories of answers F %

127 52,92

31 12,92

No 68 28,33

Doesn’t remember 1 0,42

No answer 11 4,58

SOURCE: Study on Food and Nutrition Security in the optics of Access

and Consumption, October 2012, ADRA – Action for Rural Development

and Environment.

Households that normally do not care about the quality of food, but with the

of hunger with some frequency among adults and children. In the case of the municipalities of Bailundo, Longonjo and Caála, these households represent

for a whole day due to lack of food and money to buy it, as indicated in the table below.

for a whole day because there was no food or money to buy it from April to July 2012.

Categories of answers F %

55 22,92

11 8,75

No 150 62,5

Doesn’t remember 1 0,42

No answer 11 4,17

SOURCE: Study on Food and Nutrition Security in the optics of Access

and Consumption, October 2012, ADRA – Action for Rural Development

and Environment.

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of food security, it is worth referencing another study by ADRA in Huambo, to assess the vulnerability of two of the eleven municipalities of the province, Bailundo and Caála. In this study, one of the most important points considers the main sources of livelihood, and concludes that the way of life in rural areas

production. Among the various activities considered a source of livelihood, stand out, other than agricultural production, the small business, odd jobs and charcoal manufactuting. These form part of the four main activities of

performed with relevance in Caála, while agricultural production, practiced in parallel with small businesses, have a highest proportion in the Bailundo

such as charcoal manufacturing. Although the sale of small animals has not configured the list of activities, we should mention the significant reduction observed, especially in the possession of birds, due to the occurrence of pest.

Industry and commerce

The Huambo province had the second industrial park in the country represented by the metalworking and chemical industries, building materials,

wood and furniture. Although at present the reality is different, in 2012 investments in the total value of 7.9 million dollars and 448.9 million Kwanza in the Industry, Geology and Mining sector enabled the set up of ten manufacturing plants, providing 279 jobs. Thus, the province’s labour universe in this sector reached a total of 2073 workers in 2012.

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LIST OF COMPANIES ACTING IN THE GEOLOGICAL MINING SECTOR IN FUNCTION OF THEIR SPECIFICITY

No. Company name (Minerais) Municipality Total

No.1 Copper (Cu) Longonjo

6

2 Gold (AU) Caála

3 Ferrous and non-ferrous metals Mungo

4 Rare metals Longonjo

5 Precious and semi-precious stones Mungo

SOURCE: Activities Report undertaken during 2012

Regarding the Industrial Development Hub at Caála, the infrastructure project

the users of the spaces in the Industrial hub, with a view to avoid any possible

Regarding the banking sector, the Huambo province has 42 agencies and 13 service points, of the 18 commercial banks deployed in the area. It also has two

207. It also has three branches of Currency Exchange, called New Currency Exchange Angola.

The trade of the province is characterized by a network of shops in a phase

In the area of regulation and licensing of formal businesses (shops), during 2012, 398 shops and providers of market services were licensed. Currently, 3009

network licensed in 2012, with the same period in 2011, there was a decrease in

207 Currently, the Credit Kixi disburses loans over $ 24 million every year and has over 13,000 active customers spread in its nine branches, existing especially in Luanda and Huambo.

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GROWTH OF COMMERCIAL NETWORK BETWEEN 2011

No. Commercial activity 2011 2012

1 Gross 16 1 (15)

2 Retail 317 268 (49)

3 Services 73 49 (24)

4 Precarious trade 150 80 (70)

Total 556 398 (158)

SOURCE: Activities Report undertaken during 2012

Projects funded under the Program for Promotion of Rural Trade

ILLUSTRATIVE TABLE OF CURRENT PROJECTS FUNDED THROUGH THE BANK OF SAVINGS AND CREDIT, WITHIN THE PROGRAM

TO PROMOTE RURAL TRADE

No. Municipality Funding for Const / Rehab

Funding f/ rolling means

Funding for

meansTotal value

of FinancingTotal amount Level of

overture of

0 1 2 3 4 5 6 7 = 5/6*100

1 Caála 6.379.951.00 3.788.558.00 5.000.000.00 15.168.509.00 154.416.888.00 9.82

2 Bailundo 11.500.000.00 49.336.250.00 26.607.950.00 87.444.200.00 81.705.713.00 107.02

3 Londuimbali 8.712.519.00 47.385.000.00 29.922.195.00 86.019.714.00 81.062.768.00 106.11

4 Mungo 16.500.000.00 33.890.500.00 27.254.185.00 77.644.685.00 53.131.733.00 146.13

5 Ukuma (–) (–) (–) (–) 65.678.500.00 (–)

TOTAL 43.092.470.00 134.400.308.00 88.784.300.00 266.277.108.00 435.995.602.62 61,07

SOURCE: Activities Report undertaken during 2012 .

was 8,807,208 522.00 kzs., against 7,157,061 533.00 kzs in the same period of the

The financial situation is illustrated in table below, while the following table registers the labour force, by gender, associated with the food sector, light and heavy. We subsequently present a table that translates the private investments completed during the year 2012.

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FINANTIAL SITUATION OF PRODUCTION

Year of 2011 Year of 20127.157.061.533,00 8.807.208.522,00

2.176.966.900,00 3.536.559.500,00

Results (Kz) 4.980.094.633.00 5.270.649.022,00

HUMAN RESOURCES IN THE FOOD INDUSTRY, LIGHT AND HEAVY

Fields Men Women TotalFood 763 196 859

Light 738 79 817

Heavy 270 27 297

Overall Total 1771 302 2.073

PRIVATE INVESTMENTS COMPLETED DURING THE YEAR 2012

Production Unit Location Capital invested(usd)

Capital invested(Kz)

No. of workers

Company Delin Ind. Zone, S. PedroBelém do Huambo … 400.000,00 24

Company Urb.Plan of Huambo, Lda Ind. Zone, S. Pedro 20.000.000,00 18

Company Sawmill SOCIM, Lda Sanguengue 137.000,00 … 38

Company Sawmill Sanguengue- Cachiungo … 17.460.000,00 40

Company SOPINHO Sanguengue- Cachiungo … 10.500.000,00 8

Company Organizações Sanguengue- Cachiungo 30.000,00 … 22

Carpentry Sonjamba Bairro Compão Alto-Bom Pastor … 400.000,00 7

Micro-Locksmiths Rua do Comércio … 500.000,00 4

Ceramics Soconforto Cahululu 5.000.000,00 … 80

Luguembia Ind Zone., S. Pedro 2.760.000,00 … 38

Total 7.927.000,00 448.860.000.00 279

Transport

With the reactivation of the system of intercity and urban passenger

intercity and interprovincial, there were improvements in the circulation of

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people and goods between the municipalities and communes, as in most counties and some communes the presence of these means is already felt,

combating hunger and poverty. However, there are many difficulties in road

cargo. The number of motor vehicles in the Huambo province has also been

State, does not allow translate into a real picture on the census of vehicles in the province. The table that follows contains the list of public road transport companies.

MAP OF PUBLIC ROAD TRANSPORT COMPANIES

Province Companies

Buses

TotalUrban Mark

Inter-Municial

MarkInter

-MunicialMark

Huambo

Rodas em Serviço 10Leyland - 5 (4X2)

5 (4X4)5 Bluebird 15

Bacatral 40 Bluebird 15Leyland - 5 (4X2)

5 (4X4)55

Sagilda Sarl e Tora Lda

10Leyland - 5 (4X2)

5 (4X4)10

5 - Scania5 - Mercedes

20

Azn Emprendimentos

10Leyland - 5 (4X2)

5 (4X4)30

15 - Scania15 - Mercedes

40

Universidade José Eduardo dos Santos

10 Bluebird 10

Jesp, Lda 10 Bluebird 5Leyland - 5 (4X2)

5 (4X4)15

Total 60 50 45 155

SOURCE: Activities Report unde

SGO and ANGO-REAL.

compared to the period prior to 2011, there was a higher incidence of licenses

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CEIC / UCAN

the licenses issued and the amounts of revenue collected for the years 2011 and 2012.

LICENSES ISSUED AND REVENUE COLLECTED

DESIGNATION YEAR OF 2011 YEAR OF 2012

Light passenger vehicles 458 88

Light goods vehicles 13 4

Heavy passenger vehicles 61 46

Heavy goods vehicles 36 45

Worshop permits 24 54

Revenue collected 9.222.136 4.591.770

private urban, intermunicipal and interprovincial transport companies, the province is well served, considering that in most municipalities and some communes the presence of these means of transport is already felt, thus

No. OF LICENSES, PERMITS AND COLLECTED REVENUE

Year 2012Year 2011

458 88 13 4 61 46 24 5436 45

9.222.136

4.591770

SOURCE: Report of Activities Undertaken during the year 2012, the Provincial Department of Transport,

Posts and Telecommunications.

Pass

enge

rs

light

of

Good

s lig

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f

Pass

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rs

heav

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Good

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f

Wor

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p pe

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Colle

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re

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Indi

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| 285


RESULTS OF THE PROGRAM OF ACQUISITION AND DISTRIBUTION TO SUPPORT ECONOMIC ACTIVITIES

Motorcycles Vans 3 to 5 tons Van Mixed buses

Municipality of Caála 8 1 1

Municipality of Bailundo 8 1 1

Municipality of Cachiungo 5 1 1

Municipality of Mungo 5 1 1

Municipality of Londuimbali 5 1

Municipality of Longonjo 5 1 1

Municipality of Chinjenje 5 1

Municipality of Ekuma 5 1

Municipality of Tcholoanga 5 1

Municipality of Ukuma 5 1

Former combatants 8 1

Jesp, Lda 3 1 4

R. c.h. Lda 2 1 2

Aspar 8 1

10 2 2

Delivered to Government 7

Total 80 12 11 19

Telecommunications.

Still in the road subsector, it is worth mentioning the importance of motorcycle taxis ( and , when the bike has a small trailer) and the mini-buses or in the transport of passengers, as

economic agents involved in the sector. In the city of Huambo, between 1975 and 1980, the capacity of ETP (Public Transport Company) to ensure the needs

of weaknesses in the different areas of management, the perverse effects of centralized regulation and administration. Between 1987 and 1992, the

. However, this phase was wadged by 208, which destroyed the

208

marked a turning point with regard to the destruction of the city and its infrastructure to

the city, whose control was retaken by Government forces in December 1994.

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between the 55 days war and 1999, which caused the successive and almost

to the operators directly involved in the activity of motorcycle taxi drivers (drivers and owners), its economic importance relates directly to the existence of

and India, via Luanda or Namibia, which supply the formal establishments and non-formal markets. Sales of parts, fuel and lubricants, mechanical workshops

importance, reinforced by the role that this means of transport assumes for

In the subsector of air transport, at this stage in the province it is only operating the national airline TAAG, with regular flights to the province of Huambo. The graph on page 287 illustrates the number of passengers carried between Huambo and Luanda and the revenue collected.

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and an infrastructure from scratch, for the embarkation and disembarkation

PASSENGERS TRANSPORTEDHUAMBO-LUANDA

Year 2012Year 2011

6.929

697.233

238 465 158 339

SOURCE: Report of Activities Undertaken during the year 2012,

the Provincial Department of Transport, Posts and Telecommunications.

Adul

ts

Child

ren

Babi

es

0100.000200.000300.000400.000500.000600.000700.000800.000

Indi

cato

rs

SOURCE: Report of Activities Undertaken during the year 2012,

the Provincial Department of Transport, Posts and Telecommunications.

GRAPH OF REVENUE IN KWANZAS

0

10.000.000

20.000.000

30.000.000

40.000.000

Indi

cato

rs

Periods

20122011

355.698.900

131.484.958

288 |

CEIC / UCAN

of passengers and goods. The table overleaf shows the number of airstrips in the province, as well as their quality, and the two graphs that follow present comparative data relating to the number of passengers embarked and the

NUMBER OF RUNWAYS AND THEIR QUALITY

Municipality Quality of Paving N.o of Runway

Huambo Headquarters Asphalt 1Caala Ngove Asphalt 1Bailundo Headquarters Dirt 1

Longonjo Headquarters e Chilata Dirt 2

Tchi-Tchoaloanga Headquarters e Sambo Dirt 2

Ukuma Headquarters Dirt 1

Ekunha Headquarters Dirt 1

Londuimbali Headquarters e Galanga Dirt 1

Katchiungo Chinhama Dirt 1

Mungo Headquarters Dirt 1

Telecommunications.

PASSENGERS EMBARKED AND NUMBER OF REGULAR COMMERCIAL FLIGHTS

Regarding the railways sub-sector, through the Huambo province passes the Benguela Railways (CFB), coming from the coast (Lobito, in the Benguela province) to Luau, in the Moxico province. Before independence, it was the

central and eastern regions. However, the works are still ongoing, with the

SOURCE: Report of Activities Undertaken during the year 2012, the Provincial Department of Transport,

Posts and Telecommunications.

0

10.000

5.000

15.000

20.000

25.000

N.o p

asse

nger

s

20122011

20.104

12.461

Periods

PASSENGERS EMBARKED No. OF REGULAR COMMERCIAL FLIGHTS

Year 2011Year 2012

448

678

| 289


as the alignment of the railway towards the province of Moxico. At present, one train circulates weekly, starting in the municipality of Lobito, province of Benguela, and circulates towards the central Huambo province, carrying

coastal province of Benguela and Huambo that, being located inland, lacks the products that are found only on the coast. Passengers travelling to Huambo have the opportunity to use the railway the following week to travel and transport to the coast agricultural products and livestock from the province of Huambo. In parallel with these trade dynamics that develop in the formal and non-formal

it is important to refer other commercial dynamics that have emerged and are growing next to the stations and halts being rehabilitated along the railway line that runs through the province. Finally, as in the past, when the railways

The fundamental road network of the province consists of 1050 km, of which,

total209

2 732 km are included, from the 4 797.5 km that the province has, 638.7 Km

table below illustrates the kilometres of paved roads.

PAVED ROADS

Paved roads Cuima Gove 40 Km

Paved roads Caála Ecunha 21 Km

Paved roads Mungo Calussinga 33 Km

Paved roads (Total) 95 Km

209

the area with the greatest density of roads that converged to Bailundo and the very city of Huambo (Nova Lisboa), plus numerous pathways directly linked to towns served by the Benguela Railway (CFB). Various factors, such as demography (relative abundance of African hand labour and European immigration) and the economy, namely the growth of

in part explain the density of the road network in the central highlands (Neto, 2008).

290 |

CEIC / UCAN

Through the Roads Provincial Brigade, the sector is engaged in the earthlevelling

ongoing and illustrated in the following table.

ACTIONS TAKEN BY THE PROVINCIAL ROADS BRIGADE OF HUAMBO

Land levelling of roadsSecondary, terciary and streets in some peripheral neighbourhoods of the 174 Km

Bridges Headquarteres Municipality 45 m (linear metres)

Walks and curbs Headquarteres Municipality 32.000 m2

SOURCE:

| 293

ADRA

ADRA Vulnerability, Bailundo and Caála, November and December, Huambo, Angola.

Energy, June 2012.

Bigsten A, Kimuyu P and Ludwall K (2004).

Banco Nacional de AngolaReport 2011.

Blanchard, Olivier – .

World Bank, 2012, . Washington: World Bank.

Cramer

CMI/CEIC/OSISA: (Tina Soreide, Alves da Rocha, Nelson Pestana, Regina Santos, António

CNUCED – .

CEIC/UCAN (2009), Economic Report for Angola 2008, Angola Catholic University.




Huambo Provincial Directorate of Planning, 2012. Report of Activities Undertaken during 2012, Huambo, Angola.

Provincial Directorate of Transport and Comunications, 2012. Report of Activities Undertaken during 2012, Huambo, Angola.

Undertaken during 2012, Huambo, Angola.

Ferreira

, 2010.

Government of Angola, Balance of the Government for the 1st quarter of 2012, May 10.

Government of Angola

Graça, Job – Economics of Development (Lessons Notebook from UCAN), INIC, 2012E.

Government of Angola, Report of Monitoring System, Luanda, Angola, 2012.

Government of Angola, Report of Monitoring System of Management of Transport Sector’s Indicators, Luanda, Angola, 2012.

Government of AngolaLuanda, Angola.

BIBLIOGRAPHY

294 |

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