Chinese President Xi Jinping said he would support Chinese firms investing in Angola’s agriculture and manufacturing sectors as Angola seeks help diversifying its economy and moving away from oil.
According to CNBC Africa, President Xi made the statement at the Great Hall of the People while hosting Joao Lourenco, the visiting Angolan president.
- “The Chinese side is willing to work with Angola to implement key infrastructure projects and support strong Chinese companies to go to Angola to carry out various forms of cooperation,” Xi said
President Lourenco’s visit follows the country’s announcement in December that it is set to leave the Organization of the Petroleum Exporting Countries (OPEC) and its proposed agreement with China on cooperation.
Chinese President Xi Jinping told his Angolan counterpart that Chinese firms “could help Angola achieve agricultural modernization, industrialization, and economic diversification,” State media reported.
This cooperation between both countries falls into Beijing’s long-term drive to deepen economic and political ties with Africa.
President Lourenco who was accompanied on his visit by his agricultural minister needs funds to implement structural reforms to cut its reliance on oil as the country currently does not have enough non-oil revenue sources to make the transition.
The two Presidents also agreed to upgrade bilateral ties to the level of comprehensive strategic cooperative partnership, allowing for greater trade and investment.
According to American Enterprise Institute Think Tank data, Chinese firms have invested close to $12bn in Angola since joining China’s Belt and Road Initiative in 2014. Half of the investment went into the country’s energy sector.
The International Monetary Fund (IMF) on March 8 released its executive board assessment on the Angola economy saying heavy dependence on the oil sector” put Luanda at a high risk of missing the 0.5% growth target the Fund forecast for 2023, as the IMF expects its oil sector to have shrunk by an annual 6.1% over last year.
What to know
- China is particularly interested in Angola’s quest to overhaul its economy and put an end to over-reliance on Oil because Angola owes Chinese creditors just under $21 billion, World Bank data shows.
- In December, China and Angola signed an investment protection agreement, while Angolan firms from Dec. 25 have had tariff-free access to China’s massive consumer market across 98% of goods under a separate agreement.
- Angola has a surplus reserve of base metals and ample agricultural resources such as sugarcane, coffee, cotton, and livestock, but they have all been neglected for Oil.
