Cabinda
The driving force of Angola
Buoyed by the success in September of Angola's first national elections in 16 years, Cabinda, the country's wealthiest province in terms of mineral resources, is intent on exploiting its development potential to the full.
Although it is an enclave separated from the rest of the country by a 25-mile-wide strip of the Democratic Republic of Congo (formerly Zaire), Cabinda is the engine of the Angolan economy.
The province produces 60% of the oil that has enabled Angola to export a record total of 1.98 million barrels per day and to rival Nigeria as Africa’s leading oil supplier. Cabinda has also helped the country become the fastest-growing economy in sub-Saharan Africa, with a growth rate of more than 21% last year.
As a consequence, the province has a particularly prominent role in the mutually beneficial trading relationship that has developed between Asia and the African continent. This has led Asian countries to finance and build much-needed infrastructure in Africa in return for the oil, gas and minerals required to fuel their own economic development.
Countries such as China and South Korea have extended huge credit lines for financial and technical assistance in transport, energy, water, health, education,
telecoms and public work projects in exchange for fossil fuels and mining products.
Cabinda has a great need to rebuild and expand its infrastructure in order to ensure an enduring peace and increase its economic competitiveness as it recovers from three decades of a secessionist war. Fortunately for Cabindans, the province's vast and still largely untapped mineral riches make it an ideal location for such barter trading.
This year, more than $452 million is being invested in 175 public infrastructure projects. These include the expansion of the province’s port facilities and the building of new schools, hospitals, housing estates and industrial plants for the manufacture of ceramics, cement and soap.
To expand Cabinda's potential for expatriate business activity and tourism, the region is building a golf resort and yacht marina, as well as a multi-sport stadium for the 2010 All-Africa soccer tournament, when Angola will host the African Cup of Nations.
Cabinda's isolation from the rest of Angola may soon end. A Chinese company is planning to build a 12-milelong bridge that will cross the territory of the Democratic Republic of Congo and link the province to its mother state.
José Joanes André, Angola’s deputy minister of public works, says that the China Road and Bridge Corporation will undertake the work at an estimated cost of $2.55 billion. The location has been chosen and construction will take four years, with completion scheduled for October 2012.
The bridge will bind the oil-rich enclave of Cabinda more effectively to the Angolan mainland and help heal the wounds left by a secessionist insurgency that a peace settlement brought to an end only two years ago.
The fact that a Chinese company is responsible for this flagship project illustrates the strong economic and political
ties that link the two countries, 25 years after they first established bilateral relations.
Four years ago, the Export-Import Bank of China (EximBank) pledged the first $2 billion loan to Angola to fund the
reconstruction of the country’s infrastructure, which had been shattered by three decades of civil war. Then, in 2005, the China International Fund Ltd., a private Hong Kong-based institution, extended $2.9 billion to assist in the postwar reconstruction effort.
Angola's need for reconstruction is urgent, and President José Eduardo dos Santos last year estimated that it required an investment in the region of $20 billion. The need to diversify the economy is equally crucial.
Chinese businesspeople believe that peace has brought sufficient economic stability to Angola to substantially reduce the risks of investing there. More than 10,000 Chinese investors are estimated to have visited the country to study the market and identify investment opportunities.
Another 22,000 Chinese are already working in the country, according to the Angolan interior ministry. Indeed, the Chinese presence is such that there has even been talk of establishing a Chinatown district in Luanda, the Angolan capital.
Last year, China became Angola's second-largest trading partner after Portugal, the former colonial power in Angola, when Chinese exports to the African state doubled to $368 million.
Excluding the oil and minerals trade, China's direct investment in Angola has soared, reaching more than $40 million
last year. China has put its financial and technical assistance behind more than a hundred projects in the energy, water, health, education, telecoms and public works sectors.
The Luanda government has increased the attractions of Angola by introducing an investment law establishing a new commercial code, laying down land tenure and property ownership rights, and treating foreign and Angolan enterprises equally.
The Angolan National Agency for Private Investment is actively promoting foreign investment by providing tax incentives in targeted industry sectors and development zones.
Over a four-year period, the agency handled more than 1,124 projects involving more than $4 billion in investment capital. Last year the agency had registered more than 50 Chinese firms involved in light industrial projects ranging from retailing food products and bottling mineral water to manufacturing products.
Thanks to Cabinda's oil deposits, Angola is able to provide 5% of the total petroleum imports to the U.S., and in the first three months of this year, the country leapt ahead of Saudi Arabia as the main supplier of oil to China.
However, in common with the national government, Cabinda's local administration is doing all it can to reduce its reliance on its oil reserves by diversifying the economy.
The province's natural resources stretch well beyond oil. Foreign companies have started exploration for gold, diamonds and uranium, while phosphate
deposits in Cabinda and the neighboring Zaire province are estimated at 150 million tons. Cabinda also possesses plentiful sources of rosewood timber, palm oil and crops that could be used to produce biofuels.
José Aníbal Lopes Rocha, Cabinda's provincial governor, believes that once the infrastructure is in place, these resources will offer immense opportunities for even greater international investment.
The province's location provides it with another valuable competitive advantage. Cabinda is within 250 miles of four large cities: Luanda, the Angolan capital; Kinshasa, the capital of the Democratic Republic of Congo; and, on the other side of the Congo River, Brazzaville, the capital of the Republic of Congo; and Pointe Noire, the republic's second-largest city.
More than 9 million people live within these four urbanized centers, and Cabinda is strategically located to cater to their consumer needs.
"Cabinda is in a privileged position from which to serve these important national and regional consumer markets, and we intend to make the most of this," says Aníbal Rocha.
Director: Lucas Montes de Oca Managing Editor: Beverley Blythe Editor: Michael Knipe; Art Director: Lisa Pampillonia Project Managers: Inti Perez-Pedersen and Stephanie Gillespie Project Development: Charlotte Saint-Arroman Commercial Director: Carolina Mateo This special advertising feature was produced by Insight Publications, a division of Impact Media International Ltd. 150 East 55th Street, 7th Floor, NY, NY 10022, USA Tel: +1 212 629 1936 Fax: + 1 212 629 1938 www.insight-publications.com email: publisher@insight-publications.com
