Angola Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Mutual trade between the EU and Angola has been declining for a long time, and only in 2021 did a slight increase on the side of European exports become apparent. This increase was mainly due to the improving economic situation in Angola and the associated higher demand. However, staple food exports have fallen, a consequence of Angola’s agricultural policy of restricting food imports. However, Angolan exports fell in 2021 and thus reflected the trade balance for Angola. Important export items from the EU are products of the engineering industry and consumer goods. Imports into the EU are mainly dominated by mineral raw materials.

  • Allcountrylist: Overview of major industries in Angola, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Exports from the EU (million EUR) 3,416.30 3,024.20 2,705.60 1,993.40 2,724.90
Imports into the EU (million EUR) 2,208.80 3,624.70 3,660.10 2,204.80 1,893.80
Balance with the EU (million EUR) -1,207.5 600.5 954.4 211.3 -831

Source: European Commission

Trade relations with the Czech Republic

Mutual trade exchange in 2021 saw a decrease compared to the previous year, and the main reason was the ongoing restrictions from the perspective of the COVID-19 pandemic and the impossibility of making the necessary business trips to establish new business contacts. In 2021, total Czech exports reached 217.495 million CZK and included both traditional and new export items – gas turbines, electrical parts and components. engines/generators, processing units, monitors, voice and video reception, conversion and reproduction equipment, diesel piston engines, crawler excavators, front loaders, bags, iron and steel products, mechanical equipment. Angolan imports into the Czech Republic are traditionally low, and this was also the case in 2021, the total value of which reached 128,000. CZK. The composition of imports varies greatly, stable items include home textiles, food preparations and tropical fruit (papaya).

2017 2018 2019 2020 2021
Exports from the Czech Republic (million CZK) 226,821 84.84 392.23 230,119 217,495
Import to the Czech Republic (thousand CZK) 103 1 11,007 1 126 128
Balance with the Czech Republic (million CZK) 226,718 84,838 381,231 228,994 217,367

Source: CZSO

Trade relations with countries outside the EU

Angola has a negative trade balance even with countries outside the EU, which demonstrates the need for Angola to import most products from third countries. Angola imports consumer goods, semi-finished products and machinery that it does not yet manufacture itself. On the Angolan export side, crude oil, which is mainly destined for China and other Southeast Asian countries, is gaining ground. The share of oil in Angola’s exports to the EU is minimal. Overall, the share of oil in Angola’s exports is 83% and other export commodities are natural gas, diamonds, building stones and other minerals. For 2021, non-EU exports to Angola reached a value of EUR 22.677 billion and non-EU imports from Angola were EUR 8.193 billion.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 24,985.6 30,468.4 25,239.9 15,598.3 22,677.4
Imports to countries outside the EU (million EUR) 10,084.9 9,803.4 8,347.9 5,906.9 8,193.0
Balance with non-EU countries (million EUR) 14,900.7 20,664.9 16,891.9 9,691.3 14,484.4

Source: EIU, Eurostat

Foreign direct investment

Direct foreign investments in Angola are mainly linked to the oil industry, to which up to 96% of these investments go. In 2021, total foreign direct investment was $6.59 billion, up 4.6% from 2020. The main foreign investors are international mining companies from France, Italy, the USA, India and Southeast Asia, Australia, as well as investors from Lebanon and Portugal. Other sectors to which foreign investments flow are the mining industry (diamonds, building stones and other mineral raw materials), food industry and agriculture and, to a lesser extent, the manufacturing industry. In comparison with other African countries, Angola ranks 10th in terms of investment attractiveness. The Angolan President is trying to improve the investment environment in Angola and for this purpose he adopted a new investment law in 2018 (Lei do Investimento no.

According to information from the Embassy of the Czech Republic in Pretoria, there are no significant Czech investments in Angola yet. Angola’s investment and export promotion agency AIPEX helps potential investors to approach opportunities in the Angolan market, connect with Angolan companies and resolve bureaucratic obstacles.

FTAs and treaties

Treaties with the EU

Angola has expressed its interest in joining the Economic Partnership Agreement (EPA) between the EU and selected SADC countries (South Africa, Lesotho, Swaziland, Botswana, Namibia and Mozambique). Preparations for the negotiations were supposed to start in late 2020 and the first round was supposed to take place in early 2021, however South Africa did not support the negotiations. In addition, Angola has expressed interest in negotiating a so-called investment agreement with the EU, which would be the first agreement of this type with a sub-Saharan African country. Negotiations on the investment agreement began in January 2021.

Contracts with the Czech Republic

An intergovernmental agreement on economic and industrial cooperation is currently being negotiated between the Czech Republic and Angola, which will include several areas of cooperation. He will also establish regular meetings of a mixed commission, which will be made up of representatives of several Angolan ministries.

Valid agreements between the Czech Republic and Angola:

  • Agreement on scientific and technical cooperation between the government of the Czechoslovak Socialist Republic and the government of the People’s Republic of Angola
    signature: 10 March 1978
    entry into force for the Czech Republic: 1 January 1993
  • Credit agreement between the Czechoslovak Socialist Republic and the Angolan People’s Republic
    signature: 12/10/1981
    entry into force: 7/5/1983 entry into force for the Czech Republic: 1/1/1993
  • Program of technical, economic and commercial cooperation between the Czechoslovak Socialist Republic and the People’s Republic of Angola
    signature: 2 March 1982
    entry into force for the Czech Republic: 1 January 1993
  • Framework agreement between the Czechoslovak Socialist Republic and the People’s Republic of Angola on economic, industrial and technical cooperation
    signed: 2 March 1982
    entry into force: 17 May 1985
    entry into force for the Czech Republic: 1 January 1993
  • Declaration on bilateral relations between the Czech Republic and the Republic of Angola
    signature: 1 December 1999
    entry into force: 1 December 1999

Developmental cooperation

The country is a net recipient of development aid, of which the EU is the largest provider. The EU has several priority areas that it would like to focus on in Angola. These include social protection, education and training and the specific programs are PAEP – Basic Education Support Project with a budget of €20 million, Higher Education Support Program with a budget of €11 million and RETFOP to reduce youth unemployment with a budget of €22 million.

The Czech Republic is developing small local development projects (MLP) in Angola up to USD 20,000. Among the selected MLPs were, for example, the projects of the Angolan branch of People in Need (PIN) to improve access to drinking water and to teach basic hygiene habits to residents of local communities in the province of Bié. The province of Bié was one of the main areas where Czech development aid was previously directed, as it was among the provinces with the greatest negative impacts from the civil war. Czech companies can obtain financing to support business activities with a development element within the B2B cooperation of the Czech Republic.

FOREIGN DEVELOPMENT COOPERATION GUARANTEE programwill support private investments by Czech companies in risky markets through bank guarantees. For a loan of mainly investment nature up to 50% of the principal amount of the guaranteed loan, he will provide a guarantee amount of up to 25,000,000 CZK, the amount of the guaranteed loan is not limited, the validity of the bank guarantee is up to 8 years. The guarantee can be obtained when the project focuses on: sustainable management of natural resources, agriculture and rural development, economic transformation, growth and support of local employment, sustainable development of partner countries. The guaranteed loan can be used for the acquisition and technical evaluation (i.e. extensions, extensions, reconstruction, modernization) of long-term tangible assets, acquisition of long-term intangible assets, costs associated with the transfer, costs associated with project implementation in the target developing country.

Prospective fields of study (MOP)

Energy Industry
Angola has determined in its Energia 2025 program that it will focus mainly on the development of so-called clean energy and will combine it with natural gas. By 2025, it wants to achieve a 70% share of clean energy in the total energy mix, and to do so will use mainly water, solar radiation, wind and biomass. The largest share of total electricity production in the country is held by hydropower with a share of 58%. Among the main opportunities for Czech companies are the supply of small and medium-sized hydropower plants on a turnkey basis or the supply of individual technologies for other foreign EPC contractors in combined cycle power plant construction projects or in the expansion and construction of electrical networks.

Engineering
In connection with the country’s high dependence on oil, the price of which has started to fluctuate significantly since 2016, Angola has become intensively involved in promoting the diversification of the economy and exports, as well as efforts to start production and assembly lines in Angola. He is interested in a variety of machines including machine tools, forming machines, production and automated lines for the construction industry, steel industry, plastics, cables and other consumables, chemical industry, woodworking and textile industry. The PRODESI program serves to support these goals, which in 2021 supported 1,102 new contracts that also fall under the National Development program. Over 34 million producers across Angola are registered in this program looking for new partners for their projects.

Transport industry and infrastructure
Angola is interested in restoring and promoting rail transport for more efficient transport of goods and raw materials between neighboring countries and its main ports on the west coast. For this purpose, in 2021 it approved the Plan for the National Development of Transport and Road Infrastructure (PDNSTIR), which envisages the construction of more than 3 million km of railway lines connecting Angola with Congo, Zambia and Namibia by 2028, with a total value of CZK 244 billion. The plan includes a two-phase implementation, with the first phase counting on the construction of the so-called central corridor by 2023, and in the next phase, from 2024 to 2028, it expects the expansion of the line and the construction of the eastern and southern corridors. Opportunities for Czech companies are mainly in the form of subcontracts for major EPC contractors, including rolling stock, components, switches, information, telecommunications and automation technology.

Agricultural and food industry
Angola is interested in restoring and promoting rail transport for more efficient transport of goods and raw materials between neighboring countries and its main ports on the west coast. For this purpose, in 2021 it approved the Plan for the National Development of Transport and Road Infrastructure (PDNSTIR), which envisages the construction of more than 3 million km of railway lines connecting Angola with Congo, Zambia and Namibia by 2028, with a total value of CZK 244 billion. The plan includes a two-phase implementation, with the first phase counting on the construction of the so-called central corridor by 2023, and in the next phase, from 2024 to 2028, it expects the expansion of the line and the construction of the eastern and southern corridors. Opportunities for Czech companies are mainly in the form of subcontracts for major EPC contractors, including rolling stock, components, switches, information, telecommunications and automation technology.

Healthcare and pharmaceutical industry
Interest in healthcare supplies and equipment has increased especially due to the COVID-19 pandemic, which has exposed many gaps in the provision of healthcare in Angola. Government programs started from 2020 to invest in health facilities that would provide more bed capacity, more intensive care units and the latest technology across Angola. By 2023/2024, the plan is to build 6 new hospitals in Viana, Cacuaco, Cunene, N’dalatando, Sumbe and Caxito with a capacity of 200 beds each, to mobilize financial resources for the construction of hospitals in Malanga, Uíge, Catumbela, Bailundo and Dundo and upgrade 2 hospitals in Luanda. Czech companies can participate in these projects by supplying hospital beds, ICU equipment and various devices with the latest technology.

Defense industry
Angola is interested in building its own defense and security industry and is looking for manufacturing companies to help it realize this goal through joint ventures. She is particularly interested in the production of cartridges and repair services for military equipment. In addition, he is interested in the supply of firearms, active and passive radars and training of pilots. Government spending on the defense industry is growing every year and is expected to increase from CZK 20 billion in 2021 to CZK 40 billion in 2026.

Angola Trade