Start Industry in Angola

In its pre-1975 prime, the Angolan industrial sector centered on petroleum refining and machinery, construction inputs, food processing, electrical products, chemicals, steel, and vehicle assembly. As a consequence of the civil war, Angola's industrial sector started operating at a fraction of prewar levels.

 

Industrial production during the 1990s included food processing and the production of textiles, soap, shoes, matches, paint, plastic bottles, and glues. In 1993, industrial production also included 9,000 tons of crude steel, 250,000 tons of cement, and 9 million barrels of refined petroleum products. Heavy industry for that year (cement, steel, oil refining, vehicle assembly, and tire production) accounted for about 15% of Angola's manufacturing output. Angola is now an importer of machinery, vehicles, and spare parts.

 

Angola is the second-largest oil producer in sub-Saharan Africa, behind Nigeria. In 2004, the petroleum industry accounted for about half of the GDP and over 90% of export revenues. Sonangol is the state-owned oil company, which controls exploration and production, although foreign companies participate in joint ventures and production sharing agreements. Oil production was expected to surpass 1 million barrels per day in 2003 but this target had not been achieved by 2004. However, with the coming online of new oil drilling platforms such as the Kizomba B platform owned by ExxonMobil and the Dalia platform owned by Total, the 1 million barrels per day should be surpassed in 2006. It is expected that by 2007 Angola will be producing 2 million barrels per day. Angola has one oil refinery in Luanda, with a crude oil processing capacity of 39,000 barrels per day, but is planning to build a 200,000-barrels per day refinery in Lobito. Angolan oil exports to Asia are growing, and China's oil imports from Angola grew by more than 400% in 2001. The government stated in 2003 that foreign oil companies would invest $25 billion in Angola over a five-year period, by building offshore production ships and a liquefied natural gas plant, among other projects. Many of these investments, such as ExxonMobil's Kizomba B have already begun to produce oil.

 

The diamond mining industry also plays an important role in Angola's economy, but during the 27-year-old civil war, many of the gemstones had been sold on the black market and were referred to as "conflict diamonds" because the parties in the civil war used the sale of them to fund their military campaigns. Since the civil war ended in 2002, Angola began to restructure its diamond sector. The government in 2003 ended the four-year-old monopoly of the state-controlled diamond marketing company, Ascorp, which was controlled by the state diamond company Endiama. Ascorp now competes with other private companies to buy diamonds from miners and small producers. The government also planned to build a new diamond cutting factory, to create an industry of diamond cutting in Angola.

 

The Economist Intelligence Unit, quoting a new report published in June 2005 by a Canadian nongovernmental group, Partnership Africa Canada, highlighted the fact that, although some $900 million-worth of diamonds will be mined in 2005, relatively little of the revenue will be spent on development in the diamond areas or will benefit the poor. The report said that 145 diamond licenses had been granted in 2004, often through nontransparent processes, of which nine were already operational, around ten were in the process of starting up and the remainder were vacant and were steadily being recolonised by garimpeiros (artisanal miners). The report also highlighted a number of problem areas in the sector, saying that transparency is lacking not only in published tax data but also in the 10% revenue allocation due to the diamond-producing provinces.