No matter metric you’re looking at, in the case of Africa-China relations, Angola is often near (if not at) the highest. Because of this, President João Lourenço’s official go to to China final week, with stops in Beijing and Shandong, was one to look at, particularly by way of what it would provide relating to Angola’s 2050 imaginative and prescient. The president’s go to additionally represented the second go to of an African head of state to China this yr, following Sierra Leone’s President Julius Maada Bio in early March. Each visits are essential bellwethers as China prepares to host the ninth installment of the Discussion board on China-Africa Cooperation in Beijing.
Furthermore, Lourenço’s go to befell amidst the speak of rising world competitors between the USA and China throughout the Southern African area, particularly linked to a new mission G-7 international locations have been closely selling: the “Lobito Hall” mission.
Up to now, worldwide competitors in Angola was extra targeted on oil assets. Angola has been acutely depending on uncooked commodity exports (primarily oil and associated merchandise) for years, whereas in flip, importing most of its oil merchandise from others such because the Netherlands.
That mentioned, a key Angolan coverage has been to speculate a lot of the returns from oil exports into infrastructure, particularly by way of comparatively well-negotiated pure resource-based loans with China. Now that a lot new infrastructure has been constructed, the nation is attempting to diversify its financial system. The most recent presidential go to confirms that China will stay central to Angola’s plans, for good strategic causes on each side.
Angola and China established diplomatic relations again in 1983. Since then, Angola’s presidents have made 5 visits to China (in 1988, 1998, 2008, and 2015 by José dos Santos and in 2018 by present President João Lourenço). The present journey marks the sixth go to to China by an Angolan president, and the second for Lourenço. Nonetheless, he’s no newcomer to China. Lourenço has visited China many occasions earlier than In different roles: in 2000, he visited as the final secretary of the MPLA, Angola’s long-time ruling social gathering. He visited China once more in 2015 because the minister of protection and in 2016 because the president’s particular envoy.
In 2010, China and Angola established a strategic partnership, and Angola joined the Belt and Highway Initiative in 2018. On Lourenço’s present journey, Angola turned the sixteenth African nation to raise its relationship to the extent of a complete strategic cooperative partnership with China.
In some methods the improve was lengthy overdue. Angola is China’s second largest buying and selling accomplice in Africa, additionally making Angola one of many few African international locations to have a commerce surplus with China, at a ratio of just about 6:1. Angola, nonetheless categorized as a Least Developed Nation by the United Nationsenjoys zero-tariff therapy for 98 p.c of its merchandise exported to China.
Moreover, Angola is the highest recipient of Chinese language loans in Africa, accounting for round 27 p.c of China’s complete loans to the continent throughout 2000-2022. Of the $45 billion Angola has borrowed to this point, round 58 p.c has been for power initiatives. The most recent consequence, the Dr. Antonio Agostinho Neto (Luanda) Worldwide Airport, which opened for operation in November 2023, was the most important airport ever constructed by any Chinese language enterprise exterior of China.
Throughout the COVID-19 pandemic, Angola secured a three-year debt cost freeze from Chinalasting as much as Could 2023, for a proportion of its excellent loans. In stark distinction to international locations which have turned to the G-20 Widespread Framework for debt reduction, comparable to neighboring ZambiaAngola was capable of obtain this consequence swiftly by using its bilateral relationship with China.
What does the presidential go to tells us about Angola’s technique towards China? Importantly, how may these dynamics have an effect on Angola’s relations with different international locations, such because the G-7 members?
First, it is very important make clear that Angola’s present technique shouldn’t be a pivot from the outdated. It maintains the hallmark oil contracts and debt-funded infrastructure initiatives. Therefore, one of many priorities for Lourenço was to scale back assure reserves and lengthen additional credit score traces for key initiatives. Equally, Angola not too long ago contracted the development of Caculo-Cabaca Hydropower Station to China Gezhouba Group Firm Restricted. On completion, this may grow to be Angola’s largest hydroelectric plant and – at over 2.1GW – the third largest in Africa. The mission is predicted to satisfy greater than 50 p.c of the nation’s present electrical energy wants. The oil and infrastructure components of Angola’s China technique will proceed.
Nonetheless, constructing on an funding safety settlement signed in December 2023 – together with a dispute settlement mechanism – and linking to Angola 2050, Angola’s authorities needs to discover the potential for value-added processing and manufacturing as a brand new side to Angola-China relations. In keeping with statistics from the Chinese language Embassy in Angola, greater than 400 Chinese language firms have a presence in Angola, however the actuality is that almost all usually are not producing something. The brand new technique will purpose to vary this, and it’s already being put into motion.
Angola’s nationwide oil firm, Sonangol, not too long ago signed a Memorandum of Understanding with the China Nationwide Chemical Engineering to boost funds for the completion of the Lobito Oil Refinery. Throughout the go to, Lourenço visited two well being merchandise firms in Shandong – a province well-known for its heavy manufacturing and trade. Shandong is the house of giants comparable to HiSense and Haier and lots of large agricultural firms, lots of which already promote merchandise throughout Africa. Some even have operations in international locations comparable to Egypt. Lourenço’s cease in Shandong might point out curiosity in attracting the province’s companies to arrange operations in Angola.
Due to current infrastructure enhancements, excessive anticipated returns from the elevated commerce with the Southern African area as a result of African Continental Free Commerce Space, in addition to the deliberate Lobito Hall railway enhancements, plus returns from the Lobito port itself (now operated by AGL, a French conglomerate), the funding proposition that Angola presents to Chinese language and different overseas traders needs to be considerably improved.
Renewable power could possibly be a very worthwhile alternative. As a current briefing from my agency, Growth Reimagined, famous, though Angola already ranks excessive throughout the continent with 4 GW of put in renewable capability, that is tiny in comparison with its potential. Angola has over 55 GW of photo voltaic potential plus one other 13 GW of hydro. With the fitting transmission and storage, Angola’s renewable sector is a profitable proposition.
Some will probably be eager to pitch the Angolan president’s go to to China as a priority to Washington and European allies, with the concept that the tenets of the Lobito hall deal are weighted in favor of Washington and its allies. Nonetheless, by cementing new offers with China, Lourenço’s go to can really strengthen the enterprise case for lending and investments by American and European companies, in addition to African monetary establishments such because the African Finance Company and African Growth Financial institution, to help the Lobito Hall.
It’s value remembering that after the tip of Angola’s civil battle, it was a Chinese language agency, the China Railway 20 Bureau Group Company, that did the preliminary refurbishment of the 1,344-kilometer railway, over 10 years from 2006together with with a China EximBank mortgage signed in 2004.
Angola has not grow to be considered one of China’s most essential companions on the continent out of sheer luck or just because it has oil. Angola has finished so by being strategic, measured, and foresighted in its relations with China and others. This newest go to isn’t any exception, and different African international locations can take a leaf out of its e-book in pursuit of their very own multilateral engagements.
