China’s real estate experience can help Angola overcome economic difficulties

29 February 2016

China has been involved in urban development in Angola, particularly in Luanda, and its experience in this field may help the economic diversification of Angola, with more investment in real estate, thus overcoming current economic difficulties.

In the article “Opportunities for new urbanism of Angola after the collapse of the oil economy”, published by the NGO Development Workshop (, researcher Allan Cain emphasises that in “post-socialist” countries “conversion of land held by state monopolies for urban use is a “unique opportunity” and can trigger a wave of investment.

“Applying some of the long awaited reforms in housing credit, participatory planning and fiscal decentralisation for municipalities can encourage housing owners themselves and the private sector to invest in urban development and housing opportunities,” “stimulating foreign investment in real estate” said Cain.

“Angola is committed to finding new ways to diversify and grow its economy in the new climate of low prices of raw materials. The Chinese experience of urban development, if shared, could prove to be as valuable as their loans,” he said.

For the “rapid urban and economic growth” of China from 1980, he said, municipalisation and decentralization of governance was central, together with the greater financial autonomy of local authorities, who made use of the value of their land by leasing it or selling building rights to private investors.

Revenues captured by the local authorities were then used to finance social housing and urban infrastructure, increasing real estate value and generating greater wealth and urban growth.

“As in China, the origins of wealth that grows and sustains these cities are the savings of home buyers and investors in the private sector, these resources are yet to be made use of in Angola,” said Cain.

By “capturing the value of private investment for public benefit,” he said, municipalities can use the revenues to “improve infrastructure and provide social housing, promote a virtuous cycle and increase the values ​​that accompany urban transformation.”

One of the reasons for investor reluctance so far has been the “lack of a functional land market” in Angola, and the resolution of issues related to property that are the “first step to stimulating private sector involvement” in financing the housing projects that the country needs.

Luanda received China’s largest housing development in Africa, the Kilamba project comprising 20,000 apartments, with similar projects planned for the remaining 18 provinces, providing 150,000 housing units.

The recently released “Operational plan for China’s credit line” to Angola, prepared by the Angolan government with the work to be carried out by Chinese companies, provides for connection of 480,000 homes to the power grid, construction and rehabilitation of more than 2,200 kilometres of roads and construction of 39 water supply systems.

With approximately 155 projects in the sectors of Health, Education, Transport, Agriculture, Industry, and other sectors, the Plan has an estimated cost of US$5.2 billion. (macahub/AO/CN)