Angola's Natural Wealth: Resources And Opportunities

Angola is one of the largest countries in Africa and is considered one of the region's richest states in terms of natural resources. The country has an abundance of natural resources, including arable land, petroleum, and diamonds. Angola is the second-largest producer of oil in Sub-Saharan Africa, with around 9 billion barrels of proven oil reserves. The country also has approximately 11 trillion cubic feet of natural gas reserves. In addition to its mineral wealth, Angola has fertile agricultural land, with some of Africa's most fertile soils and a climate that is highly conducive to agriculture. The country was once nearly self-sufficient in agricultural production, and currently, crops such as coffee, bananas, and cassava are grown there. Angola also has significant forest cover, with valuable commercial tree species such as cypress, pines, and eucalyptus. The country's fishing industry is another important natural resource, with Angola boasting some of the richest fishing grounds in Africa.

Angola's oil and gas resources

Angola has an abundance of untapped oil and gas resources, with an estimated 9 billion barrels of proven crude oil reserves and 11 trillion cubic feet of proven natural gas reserves. The country's oil industry is key to its economy, accounting for almost 75% of its revenues. Angola is the second-largest producer of oil in Sub-Saharan Africa, with a daily output of approximately 1.55 million barrels, although it has the capacity to produce about 1,000 barrels more per day.

The majority of Angola's oil production comes from offshore fields, with some onshore production near Soyo and Luanda. The quality of the crude oil is generally good, with a low sulfur content, making it suitable for processing light refined petroleum.

The country's oil and gas sector has faced challenges in recent years, with a significant drop in oil prices and limited foreign currencies impacting investment in new and mature exploration and production fields. As a result, Angola's daily oil production is far below its capacity. However, announcements of new investments and discoveries are expected to boost production in the coming years.

The Angolan government has implemented reforms to stimulate investment and increase production, including transferring concessionaires' rights from the national oil company Sonangol to the National Agency for Petroleum, Gas and Biofuels (ANPG). The ANPG has also planned a six-year licensing round to auction a total of 50 new blocks for exploration and production fields.

Angola's oil and gas sector faces other challenges, such as high operating costs, restrictions on foreign exchange, and bureaucratic processes for contract signing and renewal. Despite these challenges, the country's oil and gas industry has significant potential for further economic development and business opportunities.

The country's natural gas industry also requires significant investment to capture its full economic potential. Most of Angola's natural gas production is associated with oil, and when it is not flared or reinjected into wells, it feeds the Angola LNG plant in Soyo.

Diamonds and other minerals

Angola is one of the richest countries in the world in terms of natural resources, with significant reserves of diamonds, iron ore, phosphates, copper, gold, and manganese, among other valuable natural resources. The country is the third-largest producer of diamonds in Africa and has explored only 40% of its diamond-rich territory. Diamonds are the most vital mineral resource in Angola, generating up to $1.2 billion for the country's economy over the years. The diamond industry in Angola can be traced back to the colonial period in 1912 when significant deposits of diamonds were found in the country's northeastern edge near a region known as Lunda. The colonial rulers controlled diamond mining through an independent company known as Diamang. After independence, the government put in place a law to ensure that only it had the right to exploit the country's mineral resources.

The country has also been a major producer of iron ore since 1957. Iron ore was first mined at the Cassinga mine in Huila province, and between 1957 and 1975, the mine produced more than 30 million tonnes of iron ore. Angola is also rich in several other mineral resources, including manganese, copper, gold, phosphates, granite, marble, uranium, quartz, lead, zinc, and tin. The government has expressed interest in resuming mining in the southwest for crystalline quartz and ornamental marble and has estimated that 5,000 cubic meters of marble could be extracted annually for a period of 20 years.

Despite its vast mineral wealth, Angola has faced challenges in attracting major investors to develop its mining sector due to a history of human rights violations, rampant corruption, and the smuggling of minerals, particularly diamonds. The government has implemented various measures to combat these issues, including an anti-smuggling campaign called Operation Brilliant, which led to the apprehension of more than 250,000 smugglers between 2003 and 2006.

Arable land and agriculture

Angola is a potentially rich agricultural country, with about 57.4 million hectares of agricultural land, including more than 5 million hectares of arable land. The country's soils are some of Africa's most fertile, and its climate is exceptionally conducive to agriculture.

Before its independence from Portugal in 1975, Angola had a flourishing tradition of family-based farming and was self-sufficient in all major food crops except wheat. The country exported coffee, maize, sisal, bananas, tobacco, and cassava. However, by the 1990s, Angola's production had decreased significantly, and it produced less than 1% of the volume of coffee it had in the early 1970s. Production of cotton, tobacco, and sugar cane had also ceased almost entirely. Poor global market prices and a lack of investment severely limited the sector after independence.

The Angolan Civil War (1975-2002) and the consequent deterioration of the rural economy and neglect of the farming sector dealt a further blow to the country's agricultural productivity. During the civil war, most small-scale farmers reverted to subsistence farming, and large areas of land could not be cultivated due to landmines. The agriculture sector in Angola is currently expanding due to the end of the civil war and the growth of foreign investment. However, the return to productivity in rural areas is proving difficult and slow.

In 2018, Angola produced 8.6 million tons of cassava, 3.5 million tons of bananas, 2.2 million tons of maize, 1.2 million tons of sweet potatoes, and significant amounts of pineapples, sugarcane, cabbage, beans, palm oil, and peanuts. Angola's cattle stock has also been increasing since 2010, reaching 5.12 million heads in 2020.

Two-thirds of the population depends on agriculture for food, income, and employment, with women providing most of the labour force. An estimated 80% of farmers are smallholders, and their productivity is generally low, with little to no surplus produced.

Fishing and aquaculture

Angola has a 1600 km-long coastline along the Atlantic Ocean, which offers solid medium-to-long-term potential for fisheries development. The Angolan government has prioritised this in its 2018-2022 national development plan. Fishing was a major industry in Angola during the colonial era until the mid-1970s, but the country lost its fisheries capacity and expertise when skilled workers left the country after independence. The civil war, which ended in 2002, also destroyed most of the fishing infrastructure.

Today, the government, local private sector, and international entities are focused on fisheries development to advance economic diversification, generate employment opportunities, and expand food production capacity for national consumption and export. In 2021, the production volume for the fisheries sector was more than 400,000 tons, including industrial, semi-industrial, artisanal, continental, and aquaculture activities. Most semi-industrial and industrial fishing is based at four main ports: Namibe, Benguela, Porto Amboim, and Luanda. Some fishing activity also extends to the Zaire and Cabinda provinces in the north.

There is a large artisanal fishing fleet in Angola, with around 100,000 people earning their living in the fishery sector, including 50,000 artisanal fishermen organised in groups that fish in teams and share equipment. The coasts of Benguela and Luanda provinces have the greatest concentration of artisanal fishing. As part of the National Development Plan to improve production quality and living standards in artisanal fishing communities, the Angolan government is providing microcredit and regional support centres with facilities for boat and gear maintenance, fish processing, and docks.

Aquaculture production in Angola currently focuses on tilapia and catfish. Government efforts are underway to expand production, supported by an $11.1 million loan from the UN International Fund for Agricultural Development (IFAD). By 2018 and 2019, Angolan authorities aimed to achieve more than 700,000 tons and 715,000 tons of production per year through small-scale communal ponds and a limited number of medium-to-large-scale commercial aquaculture operations. However, these goals were not met due to a lack of investment in the sector.

Fishing in Angola is mainly performed by foreign fleets. Some foreign fishing fleets operating in Angolan waters are required by the government to land a portion of their catch at Angolan ports to increase the local supply of fish. Fishing agreements of this kind have been reached with several countries, including Spain, Japan, Italy, and the Soviet Union. Spain also agreed to help rehabilitate the Angolan fishing industry in exchange for fishing rights. In other cases, the government allowed foreign fleets to export their entire catch in exchange for license fees.

Forests and forestry

Angola has a large planted area, with Eucalyptus and Pinus species covering around 140,000 hectares, mainly located on the central plateau. The Benguela Railway, the Pulpwood Company of Alto Catumbela, and the Luanda Railway Company are major private sector landowners. However, the current state of Angola's forest plantations is difficult to ascertain due to a lack of relevant studies. Visual studies indicate that 40-50% of plantations are in an advanced critical state of degradation, mainly due to illegal logging and a lack of silviculture treatment and management.

The forestry sector in Angola is largely paralysed, with annual roundwood production remaining below 20% of its annual extraction capacity since independence. The main wood industries in the country are located in the northern part of Angola, in Cabinda and Luanda. However, these industries face various problems, including a lack of investment, outdated infrastructure, and political instability.

The rural population of Angola is heavily dependent on forests and forest resources for their livelihoods. Forests provide employment for almost all the population of rural areas and are a vital source of income for small-scale wood farmers and charcoal processors. Additionally, forests are a source of non-wood forest products (NWFPs) that are important for the daily diet and traditional medicine of rural and urban inhabitants.

Angola has signed international agreements, such as the CCD and CBD, and participated in the IFP and IPF processes, demonstrating its commitment to preserving forest resources and the environment. However, the lack of funds and qualified personnel has hindered the successful implementation of conservation programmes.

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