Angola is located in the southwestern part of Africa, bordering the Atlantic Ocean in the west, with a coastline of 1,650 kilometers, bordering the Congo (Brazzaville) and the Democratic Republic of the Congo (Democratic Republic of the Congo) in the north, Zambia in the east, and Namibia in the south, with a surface area of 1,246,700 square kilometers, and is one of the most important sea corridors in central and southern Africa.
As of 2023, the population is about 36.68 million, 49% are Roman Catholic and 13% are Protestant .The main ethnic groups are Owimbundu (about 37%), Mbundu (25%), and Bago (13%), and the official language is Portuguese.
Overview of the basic situation in Angola
1、主要城市概况
Luanda: The capital of Angola, it is the largest city in the country and the political, economic and cultural center.According to 2023 data, the population is about 9.65 million.Luanda is located on the east coast of the Atlantic Ocean and is one of the natural harbors on the west coast of Africa.Luanda has a relatively well-developed industrial system, with industrial output accounting for about half of the country’s value, and occupies a dominant position in the national economic system.The oil industry is the backbone of its economy, and it is known as the “oil city” of southern Africa.
Huambo: An important city in central Angola, once known as New Lisbon, with a population of about 1.2 million, the economy is based on agriculture and mining, with agriculture accounting for about 60% of economic activity.There is iron ore mining, but also deposits of copper, uranium, etc., with a large railroad workshop and agro-processing industry, and the Benguela Railroad passes through the city, which plays an important role in supporting the city’s economic development.
Benguela: Located on the Atlantic coast, Benguela has excellent port facilities and is a key route for oil and mineral exports, with a population of about 747,000 people.
Lobito : Lobito, with a population of about 805,000, is an important port city in Angola, which grew rapidly after the completion of the Benguela Railroad in 1928, and plays a significant role in the maritime trade of agricultural products and mineral resources from the DRC.
2. Mineral resources
The oil industry is the mainstay of the Angolan economy and the country is the second largest oil producer in Africa.Diamonds are the second largest mineral resource in Angola and the fifth largest producer of diamonds in the world.The government is actively promoting economic diversification, with the development of agriculture, manufacturing and services.
Angola is rich in mineral resources, with about 25 types of minerals currently exploitable, mainly diamonds, iron, phosphates, copper, manganese, lead, gold, quartz, marble and granite.In addition, Angola has a forest area of 69.3 million hectares, which makes it the second largest forestry resource country in Africa, and produces valuable timber such as ebony, African white sandalwood and rosewood.
Economic policy environment in Angola
1. Monetary policy
The name of the Angolan currency is KWANZA (abbreviated KZ, code AOA), which translates to “Kwanza” in Chinese.Angola implements strict foreign exchange controls, and the local currency, the kwanza, is not freely convertible in the international foreign exchange market.Angola’s foreign exchange comes mainly from oil revenues, and the level of its foreign exchange reserves and exchange rate are affected by international geopolitics and international oil prices.
2. Foreign exchange policy
Foreign exchange control is practiced in Angola.Foreign exchange payments need to provide corresponding business background materials for the commercial banks and the National Bank of Angola to review, and after the review and approval, the company can purchase foreign exchange through the commercial banks or use its own foreign exchange funds for remittance.The control of profit remittance is more stringent, in addition to paying 10% investment income tax, it is also necessary to review the overall tax payment status of the enterprise and related documents, and with the approval of the Angolan Ministry of Finance, the capital and dividends of the liquidated foreign companies can be remitted.
3. Investment policy
The Private Investment Law aims to attract foreign investment by providing tax incentives, land incentives, financial subsidies and other policies for foreign-invested enterprises, and its various tax incentives and facilitation policies are applicable to both domestic and foreign investment projects, allowing the investor and the Government of Angola to negotiate on a case-by-case basis on the incentives and facilitation, with the specific level of the incentives being determined through case-by-case negotiation, as a general rule.
With the exception of the petroleum sector and investments in specific mining categories, such as building materials, foreign investors can set up companies in Angola with a 100% shareholding, with no local content requirement and no minimum investment.
4. New energy policy
Encourage the development of the new energy industry and formulate plans to promote the development and utilization of solar, wind and water energy.Provide subsidies and tax incentives for the production, sale and use of new energy vehicles, and actively build charging facilities.
5. Trade agreements
Angola is a member of the WTO and will join the African Continental Free Trade Area in 2020.Regional economic organizations in which it participates include: the Southern African Development Community (SADC), the Economic Community of Central African States (CEEAC), the Gulf of Guinea Regional Organization (GGCRO), as well as the Community of Portuguese-speaking Countries (CPLP), the Organization of African Petroleum Producing Countries (OAPEC), among others.
Angola is a typical oil economy, and its economic development is mainly dependent on oil exports, with imports of fuel oil, electromechanical equipment, building materials, foodstuffs, vehicles and spare parts, etc., and with a market radius confined to SADC and CEEAC countries.In 2023, Angola’s foreign trade totaled US$51.964 billion, of which exports amounted to US$36.880 billion and imports to US$15.084 billion.
Status of agreements signed by Angola: Framework Agreement on Trade and Investment with the United States of America; Bilateral Agreements on the Promotion and Protection of Investments with Germany, Spain, the United Kingdom, Italy, Portugal, Russia, Switzerland, South Africa, Guinea-Bissau, Japan and China; Agreements on Economic and Trade Cooperation with Portugal, South Africa, Spain, the United Kingdom and others.
6. Provisions for the acquisition of land by foreigners in Angola
The Angolan Land Law stipulates that all land in the country belongs to the State and is categorized according to its use as urban, agricultural and mining land.Enterprises can apply for land use rights based on a land use plan, which can last up to 60 years.Land use rights can be sold or transferred, but if the land is not developed and utilized within the specified period (up to six years), the Government will take back the land.
Foreign companies registered in Angola may apply to the local provincial government for temporary land, as well as for commercial (building) land with a maximum term of 60 years.If the land is purchased from other companies or private individuals, it is necessary to verify the land license, the title deed of the building on the ground and the use of that land.In the case of commercial (building) land, a construction permit is required; in the case of agricultural land, its use cannot be changed.
Infrastructure in Angola
1. Transportation and logistics conditions
Ports: The ports of Luanda (8 million tons per year) and Lobito (under expansion) are the main automobile import ports.
Roads: The total length of the country’s roads is 77,000 kilometers, and the roads around Luanda are in good condition.
Railroads: The Benguela Railway (1,350 kilometers) connects to the Democratic Republic of the Congo (DRC) and provides access to the Central African market.
2. Electricity supply
Total installed capacity: 6.32 million kilowatts, with hydropower accounting for 60%.
Coverage: only 42.8% nationally, Luanda is relatively stable.
Electricity prices: approximately 12.82 kwanzas/kWh (US$ 0.015) for industrial use.
3. Digital infrastructure
Network coverage: 34.8% of municipalities covered by 4G signals, Luanda has piloted 5G.
Data Center: Huawei Technology Park (opening in 2022) can provide cloud service support.
Major Special Economic Zones/Parks in Angola
1. [Dande FTA, Angola]
Established in July 2021, it is Angola’s only FTZ and covers an area of around 5,465 hectares, bordering the Atlantic coast and 40 kilometers in a straight line from the capital, Luanda.The Dande FTZ is seen as an important platform for the diversification of Angola’s economy, with plans to build a fuel storage area, an edible oil refinery and grain storage, a natural gas storage plant, a power plant, an industrial development area and an ocean-going integrated terminal.
2. [Luanda-Bengo Special Economic Zone]
Created in 2009 on the outskirts of the capital, Luanda, and on the border with Bengo province, the zone covers an area of around 7,596 hectares, 38.5 kilometers from the port of Luanda, and is the first special economic zone created in Angola, which encourages foreign investment in advanced technologies.The zones are planned to include seven industrial, six agricultural and eight mineral reserves, with two power stations and a sewage plant, as well as logistics centers, communication and power lighting systems, road networks, water supply and drainage networks, and green spaces, amongst other things.As of the end of 2023, 157 companies have reportedly moved in, including a daily chemical plant invested by NAIAS and a CITIC aluminum alloy profile plant.
3. [Aude Industrial Park]
Established in 2018, it is the only foreign economic and trade cooperation zone invested, built and operated by Chinese enterprises in Angola.Located in Dande City, Bengo Province, the industrial park covers an area of 400 hectares, accounting for 47% of the total area developed in the first phase of Dande FTZ.The industrial park has completed the first phase of investment of 50 million U.S. dollars, forming an integrated industrial chain with a tile factory as the main supplier, a carton factory, a frit factory, a paper factory, and Dongfeng Logistics as the support, and producing tiles that not only satisfy the local market, but are also sold to neighboring countries.At present, the industrial park is introducing five projects, including electrolytic aluminum production project, plastic products production project, sanitary materials (non-woven fabrics) production project, overseas warehouse project and its own 230MW substation construction project.
Article source: Yangtze River Delta Economic Automobile Industry Overseas Base
