Angola is an African nation that spans an area of 481,400 square miles in the southern region of the continent. Angola's economy has gone through several rough patches, particularly during the Angolan Civil War. Despite the turbulence that the economy faced, it began recovering in 2003. The Angolan government implemented several ambitious policies to ensure economic reform, and as a result of the policies, the country's gross domestic product grew by approximately 20% from 2005 to 2007. The Angolan economy is considered one of the most rapidly growing economies in the world. Angola's economic success is partly attributed to the proper utilization of the country's natural resources. Some of Angola's most vital natural resources include the arable land, petroleum, and diamond.
Oil and Gas
Angola is the second largest producer of oil in Sub-Saharan Africa and is producing about 1.55 million barrels in a day, which is about 1000 barrels below its capacity. The country is a member of the OPEC and also produces natural gas of about 17,904.5 million cubic feet. The country has about 9 billion barrels of proven oil reserves and approximately 11 trillion cubic feet of natural gas. As a result of the drop in global oil prices and the lack of foreign currencies in the country has led to limited investments in new exploration. About 75% of the oil produced in the country is from the fields in the offshore and produces light sweet crude oil coming with low sulfur content, which is suitable for processing light refined petroleum. The country is planning to increase its output by 2020, and it has embarked on restructuring the industry.
According to information from the World Bank, in 2014, arable land in Angola accounted for close to 4% of the nation's total area. The data indicates that the percentage of arable land in Angola has been increasing steadily since 2004. Angola's soils are some of Africa's most fertile and its climate is exceptionally conducive to agriculture. In the past, Angola was nearly agriculturally self-sufficient with wheat being the only exception. The civil war significantly affected the sector and limited the country's agricultural output. Currently, some of the main crops grown in Angola include coffee, bananas, and cassava. Data from the government indicates that close to two-thirds of the Angolan people rely on agriculture either directly or indirectly for their livelihoods.
Since the colonial era, coffee has been one of Angola's most important natural resources. During the colonial era, Angola was one of the world's leading producers of coffee. During this period, coffee was mainly grown in the northwestern edge of the country. Angola's civil war nearly decimated the nation's coffee industry since most of the Portuguese coffee farmers fled to Brazil. At the end of the civil war, the government immediately instituted reforms in the coffee sector in an attempt to return production to colonial levels. Industry experts believe that the relevant reforms are likely to cost the government $230 million. One of the main reforms meant to revitalize the coffee sector is the improvement of the transport sector particularly the roads.
Livestock is one of the most critical natural resources in Angola with some of the most commonly kept livestock being cattle, pigs, and goats. Despite its importance livestock keeping, like other agricultural sectors, faced a significant decline during the civil war. According to official government records, in 1973 approximately 36,500 tons of slaughtered livestock were produced in Angola. By the early 1980s, the production had declined significantly to slightly over 5,000 tons.
In Angola, forests cover close to 18.4% of the nation's total area and form one of the country's most critical natural resources. One of Angola's significant forests is the Maiombe forest which is situated in Cabinda. Some of the trees exported from Angola include cypress, pines, and eucalyptus.
One of Angola's most important natural resources is fish. The importance of fishing to the Angolan economy dates back to the colonial period. During the early 1970s, government records indicate that there were close to 700 fishing vessels within Angola's territorial waters. At the time, nearly 300,000 tons of fish were caught each year within Angola's waters. The civil war greatly diminished the value of Angola's fishing sector. Like most of the country's industries, the government has invested vast sums of money in ensuring that the fishing industry is revitalized. As part of its revitalization program, the Angolan government allows foreign nations to fish within its territorial waters. Some of the foreign nations that are allowed to fish in Angola's waters include Italy, Japan, and Spain.
Angola is considered to be one of the richest African nations regarding mineral resources. Some of Angola's most important minerals include diamonds, iron ore, manganese, and tin. The mining industry is one of Angola's most important in the country due to the high quality of the country's minerals. Despite the high value and quantity of Angolan minerals, the government has faced a significant challenge in attracting major investors to develop the sector. Some of the reasons that make investors avoid Angolan minerals include a history of human rights violations, rampant corruption particularly within the government and the smuggling of minerals particularly diamonds. The government has attempted to resolve the issues to convince investors to develop the mineral industry.
Diamonds are the most vital of Angola's mineral resources. Angola's modern diamond mining industry traced its roots to the colonial period in 1912 when significant deposits of diamond were found in the country's northeastern edge near a region known as Lunda. During the colonial period, diamond mining in Angola was carried out by an independent company known as Diamang. After the nation attained its independence, the government put in place a law to ensure that only it had the right to exploit the country's mineral resources. During the civil war, the National Union for the Total Independence of Angola targeted the diamond mining industry, and due to its attacks, the industry was crippled. The organization managed to cripple diamond mining in the most important region, along the Cuango River. To combat the organization, the government strengthened the security around the Cuango River, and mining could resume in the region. After the civil war, the Angolan government was able to put in place different measures to strengthen its diamond mining industry. One of the measures that it implemented was putting in place an anti-smuggling campaign dubbed Operation Brilliant. The operation was relatively successful as it led to the apprehension of more than 250,000 smugglers over three years from 2003 to 2006. Before the operation was put in place, it was estimated that diamond smuggling cost the government of Angola approximately $350 million worth of revenue in losses.
The Angolan Economy
Although Angola has abundant natural resources, the country’s output per capita is one of the lowest in the world. Subsistence agriculture provides livelihood to more than 85% of the country’s citizens. The oil industry and its associated activities account for 45% of the country’s GDP and about 90% of the country’s export. In some decades Angola was one of the biggest exporters of food items in Africa, but currently, the country imports all its food requirements.