1. Home
  2. Southern Africa
  3. Angola

Foreign firms see potential but poverty persists

[Angola] Poor roads Huambo-Lobito. IRIN
Poor roads hamper aid efforts in Angola
When South African fast-food chains Nandos and Steers opened their doors to the Luandan public just weeks ago, they could hardly have anticipated such an enthusiastic reception. On the opening night a long line of excited customers stretched around the block, and according to one staff member, business has been "absolutely amazing" ever since. The arrival of the restaurants is unlikely to have any noticeable impact on the lives of the vast majority of people as Angola emerges from almost three decades of civil conflict. But it is certainly another sign that the country is beginning to get back on its feet. DIVERSIFYING OUT OF OIL Delegations from Brazil, Portugal, Britain, the United States, France and Germany have all paid visits in the last few months, accompanied by scores of eager businessmen. The government is keen to diversify away from oil, which accounts for a substantial chunk of gross domestic product, and has welcomed these visitors with open arms. It hopes that the greater the level of foreign investment, the quicker the economy will grow, creating more jobs. As the continent's second-largest oil producer after Nigeria, Angola should be one of Africa's richest countries. But some 70 percent of its 13 million people live on less than a dollar a day. Little of its oil wealth has so far trickled down to the general population, amid allegations of graft and mismanagement on the part of the authorities. The wish is that Angola's oil boom - production is slated to double in the next four years – will not only be fruitful for the energy industry, but also spawn a cycle of prosperity that improves the lives of ordinary citizens. One senior oil executive described Angola as "the most interesting country in Africa at the moment" and that excitement is beginning to spill into other areas. The years of devastating civil conflict mean that, literally, everything still needs to be done. Aside from the health, education and agricultural projects, which receive much attention from aid and humanitarian organisations, investors play a part in rebuilding the country. Portuguese construction industry suppliers, South African supermarkets and Brazilian bars are all flocking to Angola, viewing the country as a potential gold mine. "It's almost impossible to get a business class seat to Luanda," said Luis Ferreira Marques, regional director for Portuguese-speaking countries in Africa at Stanbic, the commercial arm of South Africa's Standard Bank. "That's an indicator - the potential in Angola is enormous." The country holds great appeal for many of Stanbic's customers and the bank is considering setting up an Angolan operation. "I wouldn't be surprised if, in the near future, Angola was one of the countries we would look at for a next venture. Angola is a very interesting country and will be included in our plans in the future," he added. GROWING BELOW POTENTIAL However, some observers fear that this growth will be confined to an affluent minority. "There are, of course, patches of the non-oil sector that are growing fast. But too often they are non-oil businesses like restaurants, hotels and luxury car dealerships that are serving the small elite," Nicholas Shaxson, associate fellow at the London-based Royal Institute of International Affairs, told IRIN. "Outside that charmed circle, Angola is growing way, way, below its potential." Angola also has to ensure that its administrative and logistical bureaucracy doesn't pour cold water on the ardour of foreign investors. "It was the same story three years ago. Everyone was excited about Angola's prospects, but the sheer difficulty of doing business means that a lot of potential investors simply give up," said one oil industry executive. Setting up shop in Angola is no easy task. Regular electricity blackouts, patchy communications and the notoriously cumbersome visa process are enough to dissuade even the most determined investor. "It can take me two hours just to get through the airport," said one South African entrepreneur waiting patiently at Luanda's busy international airport. Good contacts are absolutely essential, and most foreign firms set up joint ventures with local companies rather than brave the Angolan business scene on their own. But the potential for future windfalls means most are willing to endure the hassles of doing business. "You get used to the delays and, I have to admit, things are getting better. But when more planes start arriving, bringing in more businessmen and more professionals, Angola will have to change some more – I hope it does," the businessman said. Angolans themselves are viewing the future with cautious optimism. Joao, 25, is studying engineering in the South African city of Cape Town, but plans to return to his native Benguela province and start his own business once he has qualified. "I went to Cape Town so I could learn a skill and learn English. But I don't want to stay there. There are so many more opportunities in Angola, and Angola is my home," he said. "It's not just about making money. It's a chance to make history, to be part of turning Angola around." With an entire generation lacking education and 44 percent of children under 10 not in school, Angola has a long way to go. Sitting at a pristine table in the new fast-food restaurant, it is easy to feel hopeful that this war-ravaged country is moving up the ladder. But the sight of scruffy children begging just a few metres down the street brings reality home. As one customer put it: "You really feel like you could be in South Africa – until you look out of the window."

This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

Share this article

Get the day’s top headlines in your inbox every morning

Starting at just $5 a month, you can become a member of The New Humanitarian and receive our premium newsletter, DAWNS Digest.

DAWNS Digest has been the trusted essential morning read for global aid and foreign policy professionals for more than 10 years.

Government, media, global governance organisations, NGOs, academics, and more subscribe to DAWNS to receive the day’s top global headlines of news and analysis in their inboxes every weekday morning.

It’s the perfect way to start your day.

Become a member of The New Humanitarian today and you’ll automatically be subscribed to DAWNS Digest – free of charge.

Become a member of The New Humanitarian

Support our journalism and become more involved in our community. Help us deliver informative, accessible, independent journalism that you can trust and provides accountability to the millions of people affected by crises worldwide.

Join