China is Angola’s biggest aid partner and increases economic ties with Portuguese-speaking countries

10 April 2006

Lisbon, Portugal, 10 April – China is now Angola’s biggest aid partner, having overtaken Brazil, Portugal and Russia, and is currently running a successful policy of strengthening ties with Portuguese-speaking African countries, Portuguese bank, BPI said in its latest report on the Angolan economy.

The expected announcement of debt reduction for countries such as Angola, Mozambique and Cape Verde, as well as low interest loans and waiver of customs taxes, “tend to strengthen the relationship between China and Portuguese-speaking Africa nations,” said BPI analyst Pedro Ferreira da Silva, in the report to which macauhub was given access.

Other examples of increased ties are the setting up of an investment bank to finance projects in partnership with those countries, and the expected announcement of the launch of a viability study for creating a logistics network for air and sea transport linking the eight members of the Economic Cooperation and Trade Forum between China and Portuguese-speaking countries, known as Forum Macau.

In the specific case of Angola, “China seems to continue to dominate aid,” despite several aid packages that have been granted by countries such as Japan, Russia, Brazil and Portugal.

China has granted a credit line to Angola for reconstruction, which is guaranteed by oil exports and has a total value of US$2 billion, and which, according to information that has as yet to be officially confirmed, will soon be increased to US$3 billion.

The BPI report also said that the diamond sector was currently “lively” with public concession-holder Endiama projecting production of 12 million carats this year, and 19 million carats by 2009.

BPI also added that known diamond reserves have grown exponentially, with recent studies pointing to the existence of up to 220 million carats of kimberlites and 150 million carats of alluvial deposits, around 4 times previous estimates.

For the Portuguese bank, the macroeconomic stability program led by the Angolan authorities has led to “admirable progress,” but the success of the oil and mining sectors are still not having a positive effect on the remaining economic activities.

“In order for the economy to grow in a harmonious way and reduce endemic poverty, infrastructures have to be created that have a physical and human basis,” BPI warned. (macauhub)