Angola's Giant Leap On World Economic Stage

Johannesburg — ANGOLA is one of Africa's best-kept secrets, says Paul de Sousa, senior partner of KPMG Angola, in a recently released report.

De Sousa says that three years after securing peace, Angola is emerging as an African economic success story, but this appears to be unnoticed in some sectors.

The World Bank and the International Monetary Fund recently reported that the Angolan economy grew 14% this year and is projected to grow 25% next year.

"This makes Angola one of the fastest-growing economies on the planet," he says.

While much of this growth is derived from the oil industry, there is no doubt that several sectors of the Angolan economy are also achieving amazing growth, including construction, ports, banking, services, communications, distribution, retail, hospitality, information technology, oil services, agriculture and diamond mining. Angola is also developing its tourism industry.

In the oil sector, for instance, production volumes of 1,2-million barrels a day will increase to 2-million barrels a day in 2007-08. Angola's continuing success in identifying and producing hydrocarbons was evident at the 18th World Petroleum Congress, held in Johannesburg recently.

Angola was one of the main sponsors and joint host.

At the Angola presentation, foreign potential investors and other interested parties flooded into the room, and many were forced to stand.

In the diamond industry, 15 new exploration concessions were recently announced by Endiama, the national diamond company.

A major new diamond cutting centre will be inaugurated this month in Luanda, the capital city. It will be capable of processing diamonds worth $240m a year.

The face of Luanda is changing dramatically.

The "forest canopy" of construction cranes visible on the skyline continues to grow monthly, says KPMG.

Many new buildings are being erected, mainly in the commercial centre of Luanda, where oil and financial sector companies are establishing offices.

Various new hotels, from two to five stars, are going up, as well as a new international conference centre to be completed next year.

In Luanda Sul south of Luanda, vast tracts of land that until recently were undeveloped rural countryside have been transformed into property developments, primarily housing projects, shopping centres and light industrial developments.

"Luanda Sul must represent one of the fastest urban growth areas in Africa. It is difficult to understand the magnitude of this development without seeing it from an aircraft," says De Sousa.

The long-awaited rehabilitation of the country's roads and railways has now started in earnest, largely as a result of a $2bn loan from the Chinese government.

Chinese nationals and Chinese businesses are becoming increasingly visible in Angola.

Central to these projects is the rehabilitation of the Benguela rail network and its 48 bridges, which were used to transport the Democratic Republic of Congo's mineral exports in the 1970s.

Angola is attracting increasing foreign investment outside the oil and diamond sectors, says KPMG. The Angolan National Investment Agency said recently that 123 new investment projects worth $180m were approved for the first semester of next year.

The majority of the investments originate from Portugal, SA and China. Last year, about 200 projects were approved.

In the past two years the network of commercial banks in Angola has grown significantly, notably with the opening of Novo Banco and Banco International de Credito and the acquisition of a stake in BCA by SA's Absa.

"Numerous other international financial institutions are preparing to enter the Angolan market," says Luis Folhadela, senior manager in the corporate finance department of KPMG Angola.

Various Angolan companies are preparing themselves to list on international stock exchanges such as Johannesburg, Vancouver and London.

Plans to establish a stock exchange in Luanda are at an advanced stage.

In the social sector, major emphasis has been placed on the reintegration of demobilised soldiers from the Angolan Armed Forces and rebel group Unita.

The Angolan Institute for Social Reintegration of Ex-Military Personnel, (Irsem) has already implemented projects which have directly benefited 40000 former soldiers, and by the end of the year they expect to double the number of beneficiaries.

"Contrary to the image that persists internationally, the war in Angola ended three years ago and everyone is too busy sharing in the peace dividend to even think about war," says Luis Fernandes, project director of the KPMG unit working within Irsem as part of the reintegration project.

The construction of a new international airport for Luanda has already begun and a new ring road around the city is being planned.

"Angola is well on its way to transforming itself into one of the most significant economic engines on the African continent," says De Sousa.

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