Lisbon — With government forecasts of 27.9 percent economic growth for 2006, Angola is looking more and more attractive to foreign investors, especially from Portugal, who are flocking to the former Portuguese colony.

Investors began to look at Angola as a country with great potential after the civil war that broke out in 1975 came to an end in February 2002, with the death of rebel leader Jonas Savimbi.

On several occasions, Portugal's socialist Prime Minister José Sócrates has half-jokingly stated that the top foreign policy priorities of his country are "Spain, Spain and Spain."

Nevertheless, his first official trip will be to Angola, the largest former Portuguese colony in Africa and the second-largest in the world, after Brazil.

Sócrates, who took office a year ago, will head to the Angolan capital, Luanda, in April, kicking off a series of official trips abroad that he has described as a new stage "whose priority will be to promote Portuguese investment."

But a team of delegates of financial institutions, businesses and technical experts is already in the southwest African nation, exploring the possibilities in one of the world's fastest-growing markets.

The companies represented include all of Portugal's major construction firms, such as Soares da Costa, Teixeira & Duarte, Mota-Engil and Somage, which are keen on getting a share of the juicy business opportunities presented by the reconstruction of a country torn apart by nearly three decades of civil war.

Businesses from a broad range of sectors are exploring the Angolan market, including Transportes Aéreos Portugueses/TAP (Portugal's national airline), cement makers Cimpor and Sesil, the CIN paint company, car makers Salvador Caetano and Auto-Sueco Portugal, Texto Editora (a publishing company that specialises in schoolbooks), the Deloitte-Portugal financial consultancy, and a number of electric and electronics companies.

In the financial sector, the state-owned Caixa Geral de Depósitos (CGD), Portugal's leading bank and one of the 50 biggest in the world, decided to forge a strategic alliance with Spain's Santander bank to invest in the Banco Totta de Angola (BTA).

The fast growth of the BTA is based on its support for companies setting up shop in Angola, with an 89 percent increase in credit last year with respect to 2004, to a total of 51 million dollars, according to the Lisbon newspaper Diario Económico.

Two of Portugal's biggest banks, the Banco Portugués de Inversiones (BPI) and the Banco do Espirito Santo (BES), are also stepping up their presence in Angola.

Through the Banco de Fomento de Angola - a financial institution that posted 162 percent growth last year - the BPI now controls 19.67 percent of the Angolan banking system.

The BES' strategy for expansion, launched in 2002, will continue this year, with the opening of 10 new branches throughout the country.

Although the bank has enormous economic interests in Brazil and Paraguay, as well as branches in the Bahamas, Belgium, Canada, the Cayman Islands, China, France, Germany, Ireland, Italy, Macao, South Africa, Spain, the United Kingdom, the United States and Venezuela, Angola accounted for a full 12.3 percent of its total profits in 2005.

Former commercial airline pilot Manuel Calçada, a 44-year-old Angolan-born businessman in the computer industry, told IPS that Angola "is perhaps the country with the greatest investment potential in all economic areas today."

After living outside of Angola for three decades, Calçada recently visited the country where he was born, to which he plans to return because "there are many more facilities for investments, which are supported by Portuguese and foreign banks operating in the country, especially those interested in forming partnerships with Angolan companies."

Red tape, one of the biggest hurdles faced by investors in Africa, has been significantly reduced "because many Angolans who studied abroad are now assuming leadership positions in companies or becoming technicians in the state apparatus, while other people are returning and becoming Angolan citizens, as could be my case in the future."

Calçada warned, however, that "any foreign company interested in operating in Angola should understand that the infrastructure reflects the effects of 30 years of war, during which it was impossible to invest in or maintain infrastructure, meaning that difficulties in basic systems, like power and water supplies, should be expected."

Although it is much easier to register a company today, "it still takes a long time, which is why many investors choose instead to acquire a local company or enter into a partnership with local entrepreneurs or businesses," he added.

Calçada explained that "when you register a local Angolan company, access to any area of activity is highly simplified, and that has been the route taken by nearly all of the companies that have established themselves in the country."

Nevertheless, companies coming to the Angolan capital cannot avoid "the high cost of the square metre of land in and around Luanda, which today is as expensive as property in the world's most expensive cities."

But he underlined that not all decisions are made in Luanda, and that there are many business opportunities in the rest of the country as well. For example, "you have to remember that the war destroyed nearly all of the country's railroad tracks."

The railways are currently being restored thanks to an agreement between the governments of Angola and China "that opens up countless opportunities, especially in agribusiness, which needs to transport products from the interior, to supply the cities."

"There are untold opportunities in a country destroyed by war that practically has to be raised from the ashes in its entirety, which explains the incredible economic growth of nearly 30 percent," said Calçada.

Despite the upbeat attitudes of leading Portuguese firms as well as investors like Calçada, the World Trade Organisation (WTO) Secretariat warned in a recent report on the trade policies and practices of Angola that the country would have to distribute the benefits of growth in order to promote development.

In its trade policy review, the WTO stated that "Since the end of the 30-year old civil war, Angola has made significant progress in fostering growth and stabilising its economy."

But its considerable potential in agriculture, fishing and transformative industry has failed to eliminate the scourge of extreme poverty and the deeply-rooted inequalities, added the WTO.

The country's prospects depend on the strong performance of the diamond and oil industries, the main engines of the Angolan economy, analysts agree.

But the demining of the country is also essential to development, in order to allow refugees to return to their villages and fields without risking death or mutilation by landmines. An estimated one-third of the population of 12.8 million fled their homes during the war, which left a death toll of around 1.1 million.