SA risks being left behind in fertile Angola
As Published in the Business Day
Africa has become the site of a new era of neo-mercantilism characterised by rivalries between established and new economic powers.
Angola is an important part of this. Countries such as Angola are able now more than ever to derive benefits from multiple powers simultaneously — particularly if those powers have competing interests.
As Africa’s largest exporter of oil — surpassing Nigeria last year — Angola is one of the largest investment destinations on the continent. Despite the enormous opportunities SA’s business presence is still relatively insignificant. Instead, China, Brazil and even Russia are playing an important role in Angola in sectors such as construction, civil engineering and resource extraction — traditional sweet spots for South African companies.
After 30 years of war the whole country is in need of reconstruction. At a workshop on Angola’s postwar foreign policy in Luanda, organised by the South African Institute of International Affairs, one Angolan official estimated that at least 20bn was still needed to “rebuild” Angola. China is a big contributor to this with over 4bn of credit lines pledged to reconstruction efforts, which has given China an unprecedented position in Angola. Angolan officials describe the relationship as a “win-win” partnership.
But given the geopolitical and economic similarities between Brazil and SA, the interaction between Brazilian companies and the Brazilian government is particularly instructive for SA. Brazil was the first “western” country to recognise the Movimento Popular de Libertacao de Angola government in 1975, and the political and cultural affinities that have developed between Angola and Brazil outshine even the colonial links with Portugal.
Bold diplomacy in the 1970s was quickly followed by Brazilian investments. These waited patiently through the lean unsettling years of war for contracts to materialise once stability was reached. Today Angolans welcome Brazilian companies and their products with open arms.
SA’s post-1994 relations with Angola have been, at best, lukewarm. These are expected to improve under President Jacob Zuma after a well- received state visit last year , during which he was accompanied by a large business contingent. Zuma’s visit needs to be followed up with a combination of ongoing diplomatic efforts, investments and development assistance. These should be geared toward improving SA’s image in the country, which is still tainted by suspicion and mistrust among the political elite.
The type of Brazilian state-business co-operation that is at play in Angola is simply absent on the South African side. There is no trade and commercial attaché in Luanda. The post of ambassador has been open since last year and is unlikely to be filled before the end of this year .
Although one frequently hears South African accents in Luanda’s top hotels, most are businessmen working independently in specialised areas such as IT and financial services — rarely interested in liaising with the South African government. This needs to change if South African companies are going to compete effectively with Chinese and Brazilian counterparts and win some of the megacontracts emerging from Angola’s reconstruction.
As Angola becomes a playground for emerging and established economic powers, the time has come for SA to take Angola more seriously and lend more muscle to a relationship that has obvious political and commercial benefits.
Dr White lectures at the Gordon Institute of Business Science and Dr Ngwenya is head: South African Foreign Policy and African Drivers Programme at the South African Institute of International Affairs.
