Angolan Oil Exports Last Year Were worth 30 billion usd

Angolan Oil Exports Last Year Were Worth 30 Billion usd

10-15-2007

Eduardo "Dino" Chingunji, Angola's flamboyant minister of tourism, is a man of big dreams. Striding to his office window overlooking the capital Luanda's achingly beautiful lagoon, he rattles his elegant cufflinks and expansively predicts that in a few years the shabby old Portuguese colonial buildings lining the seafront will have been joined by an array of five-star hotels.

"There will be a small park, places you can go jogging in the evening, restaurants, cafes ... We aim to build 40 more hotels in Angola by 2010."

It is the sort of extravagant pledge that until recently would have had potential foreign investors nodding politely before consigning his plans to the nearest wastepaper basket as a flight of fancy. No longer. For almost 30 years from independence in 1975 Angola was embroiled in civil war and known as one of the most benighted places in the world. Since the war finally ended in 2002 it has been known abroad for little beyond its phenomenal oil wealth, its stark divide between the super-rich elite and the poor, and its lack of transparency in accounting for its revenues.

Now, however, it is gaining an extra tag. The combination of its oil bonanza and a huge investment in infrastructure has led it to become the hot destination for businesses seeking to invest in Africa. "There's a general feeling that if we are not a player in Angola in the next five years we will have missed the best opportunity in Africa," says a senior western diplomat in the region.

Angolan oil exports last year were worth $29.9bn (€22.1bn, £15bn), up by 32 per cent from 2005 and 400 per cent from 2002, according to official figures published last week. While the government last month downgraded predictions of this year's GDP growth from 31 per cent to 19 per cent, many businessmen believe the original figure may prove to be more accurate. And all this is before the country's vast agriculture potential and the bulk of its plentiful diamond deposits have been tapped.

When Jendayi Frazer, the US assistant secretary of state for Africa, visited earlier this year she predicted that in 10 to 15 years Angola would be one of the three hubs in sub-Saharan Africa, along with the traditional powerhouses of South Africa and Nigeria.

It is a view widely shared by bankers. Outside South Africa "you've got to be in Nigeria, Ghana, Kenya and Angola", says Craig Bond, CEO of Standard Bank Africa, the African arm of Standard Bank, the continent's largest bank. Angola has registered five new banks in the past year and is expected to register five more by the end of 2007, according to Paul de Sousa, the representative for KPMG. The "big three" banks in South Africa, Standard Bank, First National Bank and ABSA, and several international banks have been scouting in recent months for potential acquisitions.

In the past two years China's credit lines to Angola - variously estimated at between $6bn and $10bn - have captured the headlines. Now interest from the US is intensifying and not just in the oil industry in which the big US oil companies have long had a huge stake. A delegation from Carlyle, the US private equity group, visited recently looking not just for business with the government and the state oil company, Sonangol, but also for private clients, according to a person familiar with the discussions.

For western governments Angola's allure poses an ethical dilemma. On the one hand it is a terrific investment opportunity. British officials are facilitating two UK-Angola trade missions this year, up from one last year, and they anticipate three in 2008.

Opposite the office of Mr Chingunji, is a vast sandbank recently reclaimed from the sea. He says he has pledges of hundreds of millions of dollars to build a giant hotel there. A renewed emphasis is under way, he insists, to ensure that the poor benefit from the boom.

"Everyone wants to do something here," he says. "It's a miracle."