Rise in oil revenues drives increase in construction projects in Angola

2 May 2012

Construction projects in Angola are increasing to the benefit of large companies such as China’s SinoHydro, due to a rise in the country’s oil revenues, according to the Economist Intelligence Unit (EIU).

“There are daily announcements of new projects to build low cost and social housing, to build or refurbish road networks and for water and electricity supply,” said the EIU in its latest report on Angola.

According to the British analysts, in the last month alone China’s SinoHydro and Brazil’s Odebrecht were awarded projects worth US$200 million for water and sanitation projects in the provinces of Malange and Kwanza Sul.

The investments, which are being made in an election year, are driving the “Water for All” programme, which had been experiencing delays, according to the EIU.

Construction of the new Luanda International Airport, in the Bom Jesus area, is also underway, as well as refurbishment of the domestic terminal at the current airport for the second time in three years.

The new “focus on construction” is also visible in more remote provinces, such as Lunda Sul, Lunda Norte, Moxico and Kuando Kubango, where investment has always been less than in the Angolan capital.

For this year the EIU projects Gross Domestic Product (GDP) growth for Angola of around 7.7 percent, which is more than double that seen in 2011, slowing to 7 percent next year and 6.2 percent in 2014.

The main drivers of growth, in percentage terms, will this year be exports (10.3 percent), imports (8.5 percent), investment (8 percent) and public spending (7.1 percent).

Next month Angola will start exporting natural gas, following an investment of US$9 billion.

The EIU’s projection point to continued growth of oil exports, with international prices remaining high.

In order to support the creation of small and medium-sized companies, thus strengthening the Angolan private sector, creating jobs and diversifying the economy, the government recently announced incentives of around US$1.8 billion.

With the same aim, the government also announced the creation of the Business Institute at the economy Ministry to outline policies and carry out incentive programmes. (macauhub)