Angola on Track to Leave List of Least Developed Countries

The Committee for Development Policy of the Social Council of the United Nations (UNCTAD) announced in September that Angola became a candidate for the graduation process of the Group of Least Developed Countries (LDCs), on a list that will be approved in 2015.
Angola was recommended by the UNCTAD to work to get out of the LDCs, taking into account the advances in macro-economic and social achievements.

Least developed country (LDC) is the name given to a country which, according to the United Nations,  exhibits the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all the countries in the world. The concept of LDCs originated in the late 1960s and the first group of LDCs was listed by the UN in November 1971. A country is classified as a Least Developed Country if it meets three criteria:

• Poverty (three-year average GNP per capita of less than US $905, which must exceed $1,086 to leave the list)
• Human resource weakness HCI ( based on indicators of nutrition, health, education and adult literacy) and
• Economic vulnerability IVE (based on instability of agricultural production, instability of exports of goods and services, economic importance of non-traditional activities, merchandise export concentration, handicap of economic smallness, and the percentage of population displaced by natural disasters).

For the countries classified with this distinction, potential benefits fall into four main areas: (a) preferential market access, (b) special treatment regarding World Trade Organization-related obligations, (c) official development assistance and other forms of developmental financing, and (d) technical cooperation and other forms of assistance. The majority of LDCs are in Sub-Saharan Africa.

According to the UN rules, the LDCs must meet two of the three criteria in the upper limits established for inclusion, or having a high level of GNP per capita which is twice that of the value stipulated for inclusion.  Angola's GNP is sufficient for exclusion for the list, even though the country has not reached the required values in any of the other criteria, considering that following the end of the war in 2002 the Angolan GDP grew at an average of 12%.

In the last three decades, only three countries left the group of LDCs, namely Botswana, Cape Verde and Maldives.  (Angola Njango, UNCTAD, wikipedia)

Angola: Leading in African Telecommunications

Angola’s largest wireless operator by subscribers, Unitel, recently in the last few months launched its 4G LTE services.  Angola's second largest provider, Movicel,  launched Africa's first commercial LTE network in the country's capital, Luanda with its 4G launch in April 2012.

Both of these LTE service offerings are currently available only in the capital Luanda, but both operators hope to expand coverage to other provinces.  At the end of September 2012 Unitel claimed 8.1 million subscribers, giving it a subscriber market share of 59.1%, comfortably ahead of rival operator Movicel with 41.9%. 

Movicel's LTE network, built with technology from Chinese telecom equipment makers ZTE and Huawei, is designed to enable up to 120M bps Internet access.  LTE is still being piloted by Africa's largest mobile operator, MTN,  in South Africa, making Angola the first country in Africa to have a commercial LTE network.

China's work with Angola to launch the first LTE network in the region is a sign of how China is helping African countries develop the telecom sector in exchange for natural resources, and of Chinese telecom companies' dominance in the African mobile market. In Zambia, Zimbabwe and Botswana, China has spent millions of dollars to develop communication infrastructure in exchange for licenses in extractive industries and construction. (PC Advisor)

Angola's New $5B Wealth Fund

Luanda, Angola (CNN) -- Angola, Africa's second-largest oil producer, has launched a $5 billion sovereign wealth fund in an attempt to diversify its economy -- a move more associated with wealthy Gulf States like Qatar and the UAE.

The state-owned investment fund, known as the Fundo Soberano de Angola, will invest domestically and internationally, focusing on infrastructure development and the hospitality industry. These are two areas the Government of Angola believes is "likely to exhibit strong growth".

In an exclusive interview with CNN, Jose Filomeno de Sousa dos Santos, the son of Angola's longtime president who is on the board of the fund, said "now is a very good time."

He added: "The country has had around five years of steady growth, good growth, mostly based on oil production increases, and it plans to diversify the economy. The best way to do that is to do that is to intervene directly in the economy through investments."

More than 90% of Angola's revenue comes from oil production -- reaching around 1.9 million barrels a day -- and it is second only to Nigeria in its exports. But despite its oil wealth, the country remains largely impoverished.

Dos Santos says the aim of the fund is to invest profits accrued from oil to promote social development in the country.

"It is very easy to have oil money and spend it but it is very difficult to have a positive impact to improve people's lives on a daily basis," he said, "and that is an area we intend to invest on a lot with the sovereign wealth fund."

The formation of a formalized fund was first announced by Angola's President Jose Eduardo dos Santos. But the global financial crisis caused the oil price to plunge, hammering Angola's economy.

The government had to offset the crisis by securing a loan from the International Monetary Fund (IMF) in the form of a Stand By Arrangement of around $1.4 billion.

With new deep water oil finds announced by the government, Angola hopes to outstrip Nigeria to become Africa's largest oil producer. But the revenue from Angola's black gold won't last forever. The government hopes the sovereign wealth fund will help diversify Angola's profits to secure its future.

USA: Angola's Silent Partner

The advance in relations between Angola and the United States has been “fairly incredible” in the barely two decades since diplomatic recognition, says US Ambassador Christopher J. McMullen, who took up his post in March last year.

“The first Africans to reach the territory which comprises the United States today were slaves coming from Angola,” says Maria da Cruz Gabriel, executive director of the US-Angola Chamber of (USACC). “They became part of the first permanent English settlement in Virginia. This common historical past should be seen as an asset to bring US and Angola co-operation even closer in today’s world.”  
Whereas other countries’ involvement in Angola’s reconstruction such as that of China, Brazil and Portugal, is highly visible in road, rail, construction, and airports, American efforts are often “under the radar”, McMullen believes.  The ambassador likes to think of the US as Angola’s “valued-added, silent partner”, involved in top-end economic partnerships which affect the whole economic strata.

McMullen is anxious to point out that American relations with the Angolan people go back much further than the period of the Independence struggle. Indeed, they go back many centuries.

Ambassador McMullen outlined three major elements contributing to the solidity of the relationship. First of all, the American missionaries who went to Angola in the early 1800s and cemented “people-to-people” connections.

An important consequence of these missions was to bring literacy and educational opportunities to a broad spectrum of Angolan society. The late President Agostinho Neto’s father was a Protestant pastor, and a New York- based missionary board granted Neto himself a scholarship in 1947 to study medicine.

The US missionary connection with Angola is still strong, according to McMullen, but more-secular organisations have widely taken on the missionaries support role in social development. Today’s multitude of US-supported non-governmental organisations (NGOs) provide continuity in health and educational projects and keep up fruitfully direct personal relations with Angolan people all over the country.

A second base element in US-Angolan relations, and of extreme economic importance, is of course the oil industry. American company involvement in Angolan oil exploration dates back to the second decade of the 20th century.

Chevron is today’s emblematic and longest- standing American presence in Angola’s hydrocarbons sector, having drilled the first onshore and offshore wells in 1958 and 1966, respectively. It was also the first, in 1997, to operate a deepwater well. Even when the United States had no official ties with the Angolan government after Independence, Chevron continued to operate normally in the country.

The third component to US-Angolan relations is “government-to-government”. According to McMullen, many US government agencies long had informal connections with Angolan government ministers even when there was no official recognition.
 

Angola has been running a trade surplus with the US in recent decades, dominated by Angolan crude oil sales. This does not daunt McMullen. He believes it is in the nature of the oil trade that there will be a lack of balance, and points to a similar relationship with Venezuela. In 2011, the US-Angola trade totaled $1.5 billion US exports to Angola and $13.6 billion Angola imports to the USA; the majority of these US imports is Angolan petroleum.   

The US government also partners NGOs and United Nations bodies involved in education and vocational training through the US Agency for International Development (USAID). The same NGOs may also be supported by American corporate social responsibility efforts.  


United States energy companies are one of the largest recruiters for workers in Angola from Angolan communities in the United States. They also provide training for their personnel and send many to the United States to study. In addition, the Ministry of Petroleum and Sonangol have sent, and continue to send, students to the United States for training at universities around the country, in particular to Texas, Louisiana, and Oklahoma. (Sonangol Universo Magazine)    

Angolan economy is the fastest growing in 2012

The Angolan economy will grow 9.7% in 2012, being the fastest growing among the 18 sub-Saharan African countries covered by the forecasts of the International Monetary Fund (IMF) released today. In its spring economic projections ("Outlook"), published today, the IMF estimates that the Gross Domestic Product (GDP) of Angola to grow 9.7% this year and 6.8% in 2013, after having last year stayed by 3.4%. 

Among the countries covered by the analysis of the IMF which appear immediately after Angola are Ghana, with a growth of 8.8% in 2012, and Côte d'Ivoire (8.1%).  

This acceleration of economic growth will be due mainly to the early exploration of new oil wells in Angola, indicates the institution. 

In the report released today, the IMF notes that sub-Saharan Africa has been one of the least affected by the recent global financial crisis, growing about 5% in 2011. This despite the economic slowdown in South Africa, the effects of drought in the eastern and western parts of the continent and the conflict in Ivory Coast. 

The reduced financial connection in the African region with Europe has helped to protect it from the crisis, while the diversification of exports to emerging markets has reduced the commercial exposure of these economies in Europe. 

Indeed, notes the IMF, exports to the euro zone now represent a fifth of the region's exports, while in 1990 they accounted for two fifths. 

However, the IMF stressed that a priority, especially in East Africa, is the containment of inflation.The IMF estimates that inflation in Angola is of 11.1% in 2012 and 8.3% in 2013, while in Mozambique is expected to be 7.2% this year and 5.6% next year.  (Source: Lusa/SOL)

Selling Sand For a Living

Sand is an ubiquitous and plentiful commodity throughout the world. But in some villages in Angola the sale of sand ensures a livelihood for many poor families.  The extraction and sale of sand along the river Cambogo in the Kwanza-Sul province, has begun to be a business option that will sustain them. 

The activity of small-scale sand extraction in bucket-sized measures, is carried out mainly by women who have no other means of employment and have a very low education.  The sand is normally sold to other Angolan entrepreneurs who used the sand to make blocks for building construction.

One Angolan mother, Susana António, has been selling sand for three years, but originally found that the activity required for work than what she imagined to do in one day's work.  But due to the various economic difficulties that she is facing, she does not measure the consequences when it comes to getting something for her family. 

Because of the river flow, there is not an abundance of sand along the river-edge.  Instead the women must dive to the bottom of the river and collect the sand from the river bottom all the while facing the river current.  The conditions make these 'sand-gathers' vulnerable to accidents. 

One sand seller said the price of each lot of sand varies from three thousand to four thousand kwanza (USD$31 to USD$42), depending on size of the sand pile that make. Another seller, Julia Andrew, who is six years practicing this activity, the Jornal de Angola said that the money they earn does not solve all your problems, but it helps in feeding and clothing their children. 

For their effort, the women demonstrate their capacity and ability as mother and family leader since they do not have the support of other family members.   The women recognize that this job requires great sacrifice, but the need to ensure the sustenance of the children speaks louder than any sacrifice. (Journal de Angola)

'Banking' on Angola's Future

Angola's soaring economy has excited the interest of foreign investors since peace returned to the country some ten years ago. Nowhere is this more in evidence than in the booming banking sector.

Luanda, the capital, is now the third-largest financial centre in Sub-Saharan Africa, after Johannesburg and Lagos.  Hosting 20 commercial banks, compared to just six in 1999, Luanda currently has a further ten more banks awaiting operating licenses.  The total banking sector in Angola to date has over 700 branches, 11,000 employees and net assets $4.3 billion; remarkable growth considering the total rebuilding of the sector and country after the cessation of the war.

South Africa’s Standard Bank recently opened a branch in Luanda, becoming the first non-Portuguese foreign bank to offer full banking services in Angola. Meanwhile, the first private equity fund exclusively for Angolan investmenthas been launched and brokers are now moving in ahead of the opening of Luanda’s stock exchange – Bolsa de Valores e Derivativos de Angola (BVDA). 

The idea for the private equity fund came from the state-owned Norwegian Investment Fund for Developing Countries (Norfund). Promoting the fund in partnership with Norfund is Angola’s largest commercial bank, Banco Africano de Investimentos (BAI). The two have made a joint commitment of $15 million after the initial round of a financing agreement valued at $28 million. 

Bringing new direct foreign investment into the economy is also firmly on the agenda of Angolan banks. BAI has overseas branches in Cape Verde and Portugal and recently opened a representative office in Johannesburg, the first Angolan bank to do so.

Building on its South African ambitions, BAI announced in December that it would be managing a $255 million credit line from the Development Bank of Southern Africa and the African Development Bank.

The credit line, signed during Angolan President José Eduardo dos Santos’s visit to South Africa, was the first of its kind between the two countries and will finance infrastructure and development projects. It mirrors a model used by Angola and the China Development Bank.

Another bank also spreading its wings is BPA. Despite opening only in 2006, BPA already has a branch in Portugal, dealings in Brazil and China, and plans to launch operations in the United States by 2013. (Sonangol Universo Magazine)

Some Good Trade!

Luanda — Angola is currently considered as the second largest trading partner of the United States of America (USA) in the sub-Saharan Africa and ranks as the US' 30th largest global supplier of imported goods in 2010 .  The largest US trading partner in the sub-saharan region is South Africa.

The information was released on Friday in the capital Luanda by the US deputy assistant Secretary of State for Southern Africa, Reuben Brigety at the end of a meeting with the State secretary of Foreign Affairs, Manuel Augusto.

US goods imports from Angola totaled $11.9 billion in 2010, a 27.9% increase from 2009.  The main import items from Angola to the USA is crude oil and diamonds.   Of the total crude oil that the US imports, 7% comes from Angola in these trade arrangements.

About the bilateral relations between the US and Angola, Reuben Brigety considered the relationship as very strong noting that Angola is one of the top strategic partners of the US in Africa after South Africa and Nigeria.  (Angop, US Dept of Trade)

Angola's 'Sparkling Industry': Diamonds

Diamonds are Angola's second-largest export earner after oil.  Angola is the fourth-largest diamond producer in the world and is reputedly in the top three in terms of gemstone quality. Endiama (Angola’s state diamond holding company Empresa Nacional de Diamante de Angola EP) manages the Angolan state’s shareholdings in the diamond sector.

The majority of diamond mining in Angola is on an industrial basis. Angola produced a total of 8.55 million carats in 2010 and had estimated gem sales worth $956 million. Artisan mining accounted for around 6 per cent of Angolan sales that year. 

By far the largest mine is Catoca, which aims to be the world’s third largest by 2020. Catoca is owned by Endiama 32.8%, Alrosa SA 32.8%, Daumonty Finance 18% and Odebrecht Mining Services 16.4%. 

Angola joined the Kimberley Process Certification scheme in 2000. The scheme was established to prevent ‘blood diamonds’ from being sold through the rough diamond market and to assure customers that when they bought a diamond they were not financing wars or human rights abuses. The process has achieved some success. 

As part of further efforts to improve conditions for artisan diamond miners, the government has developed a plan to offer support and legal protection. Some Angolan mines are nearing commercial exhaustion but there are still diamonds to be had. It is not profitable for industrial companies to exploit them, so there is a niche for small mining operations, said Endiama spokesman António José Freitas.

The government’s aim is to increase local incomes, cut unemployment and combat poverty, so it is encouraging the formation of small co-operatives with up to five members to work in one-hectare claim areas.


The right to mine is restricted to Angolans over 18 years of age who have lived in the mining area for at least ten years. No foreign citizens are allowed in claim areas and it is forbidden to transfer a licence. Conditions include obligations to exploit all existing diamonds in the claim area and to sell them to Sodiam. The use of industrial equipment is banned and tools limited to basics such as hoes, machetes, shovels, picks and buckets. (Sonangol Universo Magazine, 2011)

High Dollar Luanda

(CNN Report) Luanda, Angola's capital has been named the world's most expensive city for expats for the second year in a row. According to a new survey, Tokyo is the next most expensive, with N'Djamena, in Chad, the third-most expensive city for expats. The results are part of the Worldwide Cost of Living Survey 2011, carried out by HR consultants Mercer Record accommodation prices are the main driver of high living expenses for expats in African cities, according to the report.

In Luanda, renting a luxury two-bedroom unfurnished apartment costs an average of $7,000 per month, compared to $4,300 in New York, $3,345 in Shanghai, $2,456 in Rome and $1,800 in Buenos Aires.

"In Luanda, accommodation costs are very, very high," explained Mercer senior associate Nathalie Constantin-Metral."Availability is limited and most expats are looking for accommodation in secure compounds and prices for accommodation with international standards are high," she added.

The high cost of living in Luanda and N'Djamena is also down to the fact that expats shop differently to locals. Expats tend to look for international brands they are used to at home, which have to be imported.  A club sandwich and soda meal costs $20.38 in Luanda, compared to $6.29 for a fast-food meal in New York and $3.57 in Shanghai. Angola's oil reserves do at least mean that gas is cheap in Luanda -- 59 cents per liter, compared to 87 cents in New York and $1.12 in Shanghai.

In recent years Angola has been attracting expats with its growing economy, driven by oil production. It produces up to 1.9 million barrels a day, with oil contributing about 85% of its GDP, according to the CIA World Factbook.

Despite its oil, the vast majority of Angolans work in agriculture and more than a third live below the poverty line, according to the U.N. Development Program. 

The Cell Phone: Angola's Poverty Reduction Tool?!?

At a recent United Nations conference for Trade and Development (UNCTAD) in Luanda, UN delegates issued a report on Economics of Information with suggestions and recommendations on the advantages of using the 'phone' in the reduction of poverty.

Speaking to the press, UNCTAD representative Nuno Fortunato gave highlights of the report which documents the usefulness of the phone as a strong tool to combat hunger.  The main recommendations are those that fall within the policies of the states to reduce the cost of refills, to increase the validity of a phone subscriber's balance and charge the calls in seconds rather than in minutes.

Amidst its economic boom, Angola is experiencing exponential growth in cellular techonology and users, currently logging some 8 million users; 65% of the population.  Logically, the majority of these users are within the urban cellular signal range and within the economic capabilities of affording such communication services.

"In countries where there is an exponential growth of Information and Communication Technology (ICT) in their rural communities, it appears that there has been a direct link to an increase in the improvement of living conditions, mainly to the resident peasant farmers and fishermen," he expounds.

Fortunato supports this theory by the statistical proof of the develop in China and India which have the highest rate of development and widespread use of ICT.  Conversely, in Africa, except for South Africa, many African states are lagging behind on the expansion of the use of mobile phone in their rural areas as compared to these two Asian countries.
Alison Gillwald, director of ICT Africa, supports the findings of the continent's cellphone pricing barriers. Acknowleding the higher expense of ICT infrastructure deployment in Africa because of logistics, her group concludes the that prices charged to customers are considerably higher than costs. The excessive prices are 'the result of an excessive taxation on the equipment and services and an insufficient price regulation by the overseeing government bodies'. These prohibitive prices prevent potential customers from using the services, especially people with a low income. (Angop)

Report: Angola Poverty Level Drops

(ANGOP) The United Nations Resident Coordinator in Angola, Koen Vanormelingen, said last week in Luanda that poverty levels decreased in Angola, measured in monetary income, from 63% in 2002 to 38% in 2009. At a press conference held by agencies of the UN System in Angola,  Vanomelingen said that the country is headed toward a secure way to achieve the Millennium Development Goals (MDGs), given the advances in the past decades, such as peace and the consolidation and economic growth and social development.

In a previous UN report in June, some other impressive figures emerged: malnutrition dropped from 35% in 2002 to 23% in 2010, school enrolment has surged to 76%, and gender parity is close to being achieved in schools, with 98 girls with every 100 boys.

The attraction of considerable foreign investments, the progress on the rehabilitation of socio-economic structures and the expansion of national health network in infrastructures and staffs considered the basis for these economic and social advances.

Contary to the UN's report findings, other resident aid agencies and economists in in Angola have considered that the recent statistical drop in poverty is only within the confines of the major Angolan cities.  From their observations, the rural areas are still suffering; Angola has one of the highest infant mortality rates in the world. A rival United Nations agency, the UNDP (United Nations Development Program), also issued its annual Human Development Report stating that still one out of four Angolan children dies before the age of five. This is the same as in Sierra Leone, yet the Angolan GDP per capita exceeds $ 6,000, which is more than eight times higher than in Sierra Leone, with a GDP per capita of roughly $ 750.