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South Africa is milking it in Angola | Angola is one of the biggest African export market opportunities for SA businesses, particularly, the Western Cape. Exports to Angola grew 250%, this from R150 million to R525 million in 2003.

Angola's Shady Deals | Sitting in the glitzy, marbled modern lobby of the Hotel Alvalade in Luanda can give you as good an insight as any into the changing fortunes of today's Angola. A sharp eye and good ear can easily spot those outsiders who really matter, writes Sarah Crowe

Life after war | Decadence and decay are sinister neighbours in this enigmatic city, once known as the Paris of Africa. Luanda, a place of relative safety during the 30-year civil war, is bursting at the seams with approximately four million inhabitants. The dramatic influx of people seeking some kind of normality and safety in the midst of the fighting has placed a burden insurmountable on this the capital of Angola, writes Linda Martindale.

ECONOMY
The China-Angola oil factor
Lucy Corkin
Published: 31-MAY-07

China in recent years has been a welcome alternative of public financing to Angola, placing China at the forefront of Angola's reconstruction after years of war. For China's part, cultivating relations with Angola, the second largest African oil-producing country after Nigeria, was particularly important in terms of potential oil exploration contracts. In January 2005, China’s Exim Bank offered the Angolan government a now infamous $1bn loan at 1,7 percent interest over 17 years. This loan has been extended and refinanced several times, with the interest lowered to 0,25 percent, effectively allowing China Exim to monopolise Angola’s public financing. Official statements place the loan currently at $6bn, but independent estimates put the total amount at $9bn. Tied to this loan is the arrangement that 70 percent of all public enterprise contracts financed by Chinese money will be built by Chinese companies.

Recent developments, however, suggest that Angola has seized the political and economic leverage afforded it by the rising global demand for oil. In March last year, a joint venture was announced between Sonangol and Sinopec, Angola's and China's respective state-owned oil companies, to develop a refinery in Lobito. The project, named Sonaref, worth $3bn, was expected to reach a capacity of 240 000 barrels a day when on full stream, almost tripling the capacity of Angola’s current refinery. The joint venture, known as Sonangol-Sinopec Inter-national (SSI), also tendered for oil exploration contracts. In addition, Angola became a fully-fledged member of the Organisation of Petroleum Exporting countries in January this year. It is now in Angola’s interests to restrict oil output to maintain current high prices, so it would make perfect sense to short-circuit the construction of a refinery whose capacity would increase Angola’s current production levels of 1,4 million barrels a day and whose products were not aimed at Angola’s mastitis demand. That Angola might go it alone in developing domestic extractive infrastructure could mean a number of things. First, the Angolan government may have realised the need to stimulate national industrial capacities, not only in oil extraction, but other sectors well placed to benefit from oil-induced growth.

Second, Angola may be starting to realise the potential leverage afforded it by rising commodity prices. Shifting global dynamics as China and India come on stream will ensure that oil will become a more and more precious commodity, until such time as biofeul technology catches up with global demand.

Lucy Corkin is Projects Director at the Centre for Chinese Studies, Stellenbosch University. This is based on an article that first appeared in Business Day.

-Business in Africa Magazine