Angola: China expected to replace Portugal as biggest supplier to Angola in 2008

7 July 2008

Luanda, Angola, 7 July – Angola already has China as the biggest destination for its exports, particularly oil and, according to available figures, this year China is also expected to overtake Portugal to become Angola’s biggest supplier of goods.

Official Chinese figures showed that between January and April exports to Angola rose 138 percent to US$742.5 million, whilst Portugal’s exports to Angola were 453 million euros (US$712.1 million) in the first quarter.

The slower rate of growth of Portuguese exports – 25 percent, and slowing down on last year – show that the former colonial power is likely in 2008 to lose its position as the main exporter to the Angolan market.

Between January and April of this year, Angola’s exports to China rose 128.6 percent, reaching US$7.48 billion, mainly made up of oil.

Trade between the two countries has been rising in an unstoppable fashion thanks to the re-emergence of the lines from China’s Eximbank applied to infrastructure construction projects in the country and repaid via oil exports from Angola to China.

In 2006, trade between Angola and China reached US$11 billion and last year continued on the same trajectory, to US$14.11 billion.

Trade with Angola and Brazil has contributed most to the rise in trade between China and the Portuguese-speaking countries, which in 2008 is expected to reach a total of US$50 billion which had been projected by the authorities for 2009.

Chinese funding for infrastructure projects in Angola has also grown and this year may reach some US$11 billion, according to figures from international agencies.

The most recent funding agreements, signed last week in Luanda include the expansion of the electricity grid in the cities of Dundo (Lunda NOrte) and Saurimo (Lunda Sul), the refurbishment of the waste water treatment plant at Quifangondo (Luanda), construction of a distribution centre in the Luanda municipality of Cacuaco, as well as installing new piping systems in buildings.

Figures from Brazil’s Foreign Trade Ministry also showed strong growth in exports to Angola: 66.9 percent in the first five months of the year.

The total of US$606 million also places Brazil ahead of Portuguese exports to Angola, despite having accounted for more months.

Traditionally, the main export products from Brazil to Angola have been cane, beet and sucrose sugars, gasoline and iron and steel piping for oil and gas pipelines.

In 2006 and 2007 Angola’s imports from Brazil rose 61 percent and 45 percent, respectively.

In Angolan trade, “Portugal clearly has the top position, but the fast approach of both China and Brazil is clear,” said Portuguese bank BPI in one of its most recent reports on the Angolan economy.

The report also said that South Africa, “could quickly increase exports in the near future, as soon as road transport becomes possible, particularly due to logistical problems arising from the saturated capacity of the port of Luanda.”

In the opposite direction, Angolan imports from the United States fell by 17 percent, to around US$1.2 billion, the level at which Chinese and Brazilian imports are now. (macauhub)