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COUNTRY PROFILES


PROFILE

Country Profile

Area: Total area 1,246,700 sq km
Population: 18.9 million (UN, 2010)
Capital City: Luanda
People: The main groups are Ovimbundu, Mbundu, Bakongo, Lunda-Tchokwe and Ngangela. There is also a small mestico community.
Languages: Portuguese (official) and local African languages.
Religion(s):Christianity, (of which largest Roman Catholic), indigenous African, and a tiny Moslem community.
Currency: 1 Kwanza (Kz) = 100 Lwei
Major Political Parties: Popular Movement for the Liberation of Angola (MPLA), National Union for the Total Independence of Angola (UNITA), National Front for the Liberation of Angola (FNLA)
Head of State: President Jose Eduardo Dos Santos (assumed office 1979)
Vice President: Fernando da Piedade Dias dos Santos (assumed office in February 2010)
Foreign Minister: Georges Rebello Chicoty (assumed office December 2010)
Membership of International Groupings/Organisations: UN, Southern African Development Community (SADC), the African Union (AU), Economic Community of Central African States (CEEAC), Community of Portuguese speaking countries (CPLP), Organisation of Lusophone African countries (PALOP), Gulf of Guinea Commission, Organisation of Petroleum Exporting Countries (OPEC).

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ECONOMY

Basic Economic Facts

GDP: US$107.1 billion (2010 est.)
GDP Growth: 1.6% (2010 est)
Inflation: 14.5% (2010)
Major industries: Oil and diamonds
Major trading partners: Imports into Angola - Portugal, US, China, Brazil, South Africa, France, UK, Germany
Destination of exports - US, China, France, Taiwan, South Africa
The Angolan economy has been the third largest in Africa since 2005 in GDP terms, but is highly dependent on oil, which accounts for 60% of GDP, 80% of government revenue and 94% of export value. In Angola vies with Nigeria as Sub-Saharan Africa’s largest oil producer. After joining OPEC in 2007, production peaked at over 2 million barrels per day (bpd), but quotas capped production to 1.85m bpd. Technical problems saw production drop to 1.6m bpd in mid 2011, but this is expected to increase with new fields coming on-stream in late 2011. BP is a major player in the Angolan oil industry. Angola’s recent impressive growth rate, peaking in 2007 at the highest in the world at an estimated 23.4%, was driven by steeply rising oil production. The recent global economic downturn has led to decreased demand and consequently 2009 saw a flat growth rate. Although consumer inflation has declined significantly since 2000 (325%) Luanda has still as yet been unable to reduce inflation below 10%. Depreciation of the Kwacha as seen in mid-2010 and higher oil prices has however added a boost to the Angolan economy. The Government predict growth of 12% in 2012.

A project to develop LNG facilities is a political priority and will have important environmental benefits. 85% of Angola’s gas is currently flared. Angola’s single oil refinery is running a maximum capacity, but plans for construction of a second refinery in partnership with China’s Sinopec have been delayed. By early 2006, Angola had become China’s biggest source of imported oil, supplying some 15% of the total

Diamonds also play a large part in the Angolan economy, and output has grown steadily since the war when smuggling, illegal digging and the absence of government control had caused a significant drop. This has since been reversed. Angola was the first to join the Kimberley Process in 2000, in an attempt to outlaw conflict diamonds. Angola was the fourth largest producer of rough diamonds - largely gemstone quality - in the world in 2008. But the industry has been impacted significantly by the global economic downturn.

In 2009 the state diamond company was forced to buy up diamond stocks as exports plummeted, but this was not enough to stop the closure of some mines. 2010 saw the beginnings of recovery, with production reaching 8.5m carats at a value of US$995 million, an increase of the highs seen in 2005 (7m carats, US$949 million).

Angola is also endowed with large expanses of prime agricultural land but the proliferation of land mines during the war (recent estimates put the number laid at 4 million) has been one of the main reasons for the reduction in the area under cultivation to 3%. Once the bread basket of Angola, the Central Highlands has reverted to subsistence agriculture.

Decades of central planning, mismanagement, corruption and the war have long distorted the economy. In 2000, Angola began tentative economic reforms. It has since made significant progress in achieving macro-economic stability. Basically a dollar economy, the government intervenes heavily to support the Kwanza. In November 2009 Angola agreed an $859m standby arrangement with the IMF to rebuild its international reserves. Apart from this Angola has relied on oil-backed or commercial loans to finance expenditure over the last few years. Since 2004, China has agreed oil-backed loans valued at US$3 billion, thus far used largely for the rehabilitation of infrastructure. The size of these credits dwarfed those from traditional creditors (Spain, Brazil, Israel).

In spite of economic progress, Angola remains a difficult country for investors due to its excessive bureaucracy. In the World Bank’s publication "Doing Business in 2010", Angola ranked 172 out of 183, scoring poorly on a number of indicators including stifling business regulations.

Angola and the IMF (http://www.imf.org/external/country/AGO/index.htm)

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HISTORY

Angola was a Portuguese colony for 500 years. But until the 1920s, there was little investment and the Portuguese presence was confined to the coastal towns. There a creole or mestico class evolved. The interior was exploited as a source of slaves. Even after the abolition of slavery, it was a source of contract labour. Angolans began to agitate for independence in the mid-1950s. Three nationalist groups were formed: the MPLA in 1956, the FNLA in 1958 and UNITA in 1966. In 1961, the armed struggle was launched. But the principle of independence was not conceded until 1974, much later than in most African countries. Portugal hastily arranged a conference with the 3 movements, all of which had gained Organisation of African Unity (OAU) recognition, to work out the transitional arrangements to independence. The agreement was set out in the Alvor Accord of January 1975. It provided for a transitional government to prepare a constitution and for elections to be held before Independence Day, set for 11 November 1975. But the agreement broke down and the movements fought each other for control of the capital. The Portuguese settlers left en masse. Elections were never held.

On Independence Day the MPLA controlled the capital. They declared themselves the government and imposed a one-party constitution to be guided by Marxist-Leninism. The other movements retreated to their rural bases. The MPLA's victory was secured with military hardware from the Soviet Union and Cuban troops. The FNLA and UNITA had secured less help from their backers - the USA, apartheid South Africa and Mobutu's Zaire. Although the FNLA soon gave up the armed struggle, UNITA continued to fight a long guerrilla war which was to last until 2002. Throughout this period, UNITA moved with impunity in the countryside while the MPLA controlled the towns.

Two attempts at brokering a peace (the Bicesse Accords of May 1991 and the Lusaka Protocol of 1994) failed. Both were monitored by small UN peacekeeping forces, UNAVEM I and II. The UN Security Council also imposed a series of sanctions on UNITA from 1993. These also failed to stop the fighting. The MPLA therefore decided at its Party Congress in December 1998 to pursue a final military offensive against UNITA. It asked the UN to leave. After 3 years of fighting, government forces succeeded, firstly by killing UNITA's leader in February 2002 and subsequently by coming to an agreement with UNITA commanders to end the war: the Luena Memorandum of Understanding of April 2002. Isaias Samakuva was subsequently elected the new UNITA leader at the Party's 9th Congress in 2003. He was re-elected in July 2007.

Although peace has been achieved throughout most of the country, the problem of the enclave of Cabinda remains unresolved. A low level guerrilla war has been conducted for over 30 years by rebel groups fighting for the independence of the province. The Angolan Government has alternately tried negotiations and military force to no avail. A ceasefire agreement was signed on 1 August 2006 but it did not attract the support of all the Cabinda factions.

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INTERNATIONAL RELATIONS

During the 27 years of civil war, Angola’s relations with its neighbours, particularly Mobutu’s Zaire and Zambia, were poor because both countries had links with UNITA. Relations have since been normalised. Relations with its southern neighbour, Namibia, have always been excellent since Angola allowed SWAPO to use Angolan territory during its liberation struggle. In 1997, Angolan and Namibian troops went in to Kinshasa to support Laurent Kabila against Ugandan/Rwandan forces. They have since withdrawn although Angola is still engaged in training the new Congolese army. In August 2002 Angola brokered an agreement between the DRC and Uganda on the withdrawal of Ugandan troops from the DRC. Relations with South Africa, traditionally cool politically, improved in 2005 with the signature of a series of trade and cooperation agreements and were cemented in 2009 by the State Visit of the South African President, Jacob Zuma.

For a long period, Angola's natural allies were the countries of the Soviet Bloc, including Cuba. At the height of Cuba’s engagement, there were 60,000 Cuban troops in Angola. They left in 1990. Western investment in the oil sector has changed the balance. For example, the USA supported UNITA for two decades and did not recognise the MPLA government until 1993. It is now a strong ally of the MPLA through the American oil majors. Angola's membership of lusophone organisations has brought the country close to Brazil, a key commercial partner, and Portugal. Relations with China, long cool because of China's early support for UNITA, have been significantly enhanced by the new US$3 billion lines of credit agreed since 2004. Relations with France, frosty for several years, improved in 2007.

Angola has good relations with the UK. The British and Angolan Governments work closely in a range of areas including political, commercial, defence, commercial and educational development issues.

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GEOGRAPHY

Angola is located in Southern Africa. It is bordered on the west by the Atlantic Ocean and shares borders with the Democratic Republic of Congo (DRC), Zambia and Namibia. The enclave of Cabinda in the north, bordered by DRC and Congo (Brazzaville) is also part of Angola. The climate is tropical and humid in the north and subtropical with lower rainfall in the south. Temperatures are generally lower in the central plateau than in the low-lying coastal regions.

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TRADE AND INVESTMENT

Trade and Investment with the UK

The UK enjoys a healthy trading relationship with Angola and trade and investment between the two countries have grown significantly in the last few years. UK exports to Angola were up 60% in 2010, whilst UK imports from Angola dropped by 70% in the same year. Although the bulk of export growth was petroleum related, we are also seeing impressive growth in a number of other sectors. Apart from BP, which has a major stake in the oil sector and plans to invest some US$1.5 billion by 2015, other British companies operating in Angola include BAT, British Airways, , Crown Agents De La Rue, Diageo, HSBC, Lonrho, Standard Chartered Bank and Wood Group and KPMG.

There are also regular trade missions in both directions.

For further information and assistance in doing business with UK companies please contact our Trade and Investment Section or visit the Angola pages on the UK Trade and Investment (UKTI) website:

UK Trade & Investment Country Profile: Angola (http://www.uktradeinvest.gov.uk/ukti/angola)

Development

In spite of its oil wealth, Angola is poor. Its GDP per capita figure of over US$2,000 is misleading. In 2010, it ranked 146 out of 169 countries on the UNDP Human Development Index. 95% of the population live in poverty (under US$1 per day) or extreme poverty (less than 76 US cents per day). All its socio-economic indicators are among the worst in Africa. Nearly 60% of the population is illiterate while over 60% have no access to potable water. Since independence, military expenditure was high, often over 40% of the budget, and took precedence over social and development spending. At the end of the war, the scale of the humanitarian crisis became apparent as access to the countryside was opened up. Some 4 million were displaced, 500,000 UNITA combatants and their families had to be resettled, while neighbouring countries hosted over 350,000 refugees. The WFP (World Food Programme) reported at the end of 2004 that there was still a 47% food security deficit, and 1.1 million people still needed emergency food supplies. This dire situation since improved to the extent that the WFP estimated that in the 2006-2009 period less than 500,000 Angolans would need some food support.

World Bank (http://web.worldbank.org)
United Nations Development Programme (http://www.undp.org/)
World Food Programme - profile of Angola (http://www.wfp.org/angola)
The UK, through DFID, supports Angola through regional assistance. The funds are channelled through international NGOs or UN agencies.

DFID Country Profile - Angola (http://www.dfid.gov.uk/countries/africa/angola.asp)

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POLITICS

Angola was a one-party state, under the MPLA, until 1991. Then, as part of the Bicesse peace settlement, multi-party politics were introduced. Power is centralised in the President, who appoints all key public office-bearers including the Governors of the 18 Provinces. A total of 126 parties have since registered, but the majority are moribund. Less than a dozen parties have any real organisation or support base. Angola held its first ever elections in September 1992, an event intended to end the 18-month transition between war and peace, as provided for in the Bicessse accords. But many of the key tasks of Bicesse had not been completed by that stage. Notably UNITA had largely not disarmed or demobilised, and the proposed new integrated Angolan Army had barely got off the ground.

In spite of an election declared by the UN to be "generally free and fair", UNITA contested the results and took the country back to war. In the presidential election, the MPLA’s candidate, Eduardo dos Santos. won 49.6% of the vote while UNITA’s leader, Jonas Savimbi, secured 40%. In the parliamentary elections, the MPLA won 129 of the 220 seats, UNITA 70, while 10 parties shared the remaining 21 seats. A government of national unity, GURN, was put in place in April 1997 as agreed by the Lusaka Protocol, and UNITA deputies finally took their seats in the National Assembly at the same time.

Parliamentary elections were held in September 2008. The MPLA won 82% of the vote, thereby securing the two-thirds majority in Parliament necessary for changing the constitution. The main opposition party UNITA won 10%, with the remaining votes divided between other parties and coalitions.

A new constitution entered into force on 5 February 2010 and on 8 February 2010 the President swore in a new government. The key features of the new constitution are: a new party bloc electoral system in which presidential candidates appear at the top of party lists and are voted for en masse; the introduction of the office of Vice-President, replacing the position of Prime Minister; and more extensive guarantees for the protection of civil, political and human rights. Under the new constitution combined presidential and parliamentary elections due in 2012, with the possibility of municipal elections to follow.

BBC News Country Profile: Angola (http://news.bbc.co.uk/2/hi/africa/country_profiles/1063073.stm)

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HUMAN RIGHTS

Angola's human rights situation has improved since the end of the civil war. Both the Angolan Armed Forces and UNITA guerrillas committed atrocities, largely against civilians, during that period. Apart from thousands of deaths, the population in the countryside was displaced by the fighting several times over. By 2001, some 4 million were displaced. Even in the cities, largely unaffected by the war, the security forces regularly used repression to keep any discontent, real or imagined, under control. In spite of peacetime improvements, there are still reports of extra-judicial killings and other human rights abuses.

A fledgling civil society and an independent press developed for the first time in the early 1990s when political space opened up following the Bicesse Peace Agreement. Its activities remain concentrated largely in Luanda. Access to justice is severely limited for most Angolans, due to a shortage of lawyers and judges and the fact that courts only operate in a small proportion of Angola’s 164 municipalities. There are continued reports of forced evictions from homes in slum areas to make way for infrastructure projects and occasional reports of the right to protest being undermined through the obstruction and intimidation of local authorities.

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Last Updated: December 2011

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