Angola, the Reluctant SADC Trader · The central issues guiding the paper are the arguments for and against Angola joining the FTA; the likelihood of Angola ever joining the FTA;

South African Instit

ute of Inte

rnat

iona

l Affa

irs

African perspectives. Global insights.

Economic Diplomacy Programme

O C C A S I O N A L P A P E R N O 1 5 2

Angola, the Reluctant SADC Trader

L o u i s e R e d v e r s

A u g u s t 2 0 1 3

A b o u t S A I I A

The South African Institute of International Affairs (SAIIA) has a long and proud record

as South Africa’s premier research institute on international issues. It is an independent,

non-government think tank whose key strategic objectives are to make effective input into

public policy, and to encourage wider and more informed debate on international affairs

with particular emphasis on African issues and concerns. It is both a centre for research

excellence and a home for stimulating public engagement. SAIIA’s occasional papers

present topical, incisive analyses, offering a variety of perspectives on key policy issues in

Africa and beyond. Core public policy research themes covered by SAIIA include good

governance and democracy; economic policymaking; international security and peace;

and new global challenges such as food security, global governance reform and the

environment. Please consult our website www.saiia.org.za for further information about

SAIIA’s work.

A b o u t t h e e C o N o M I C D I P L o M A C Y P r o g r A M M e

SAIIA’s Economic Diplomacy (EDIP) Programme focuses on the position of Africa in the

global economy, primarily at regional, but also at continental and multilateral levels. Trade

and investment policies are critical for addressing the development challenges of Africa

and achieving sustainable economic growth for the region.

EDIP’s work is broadly divided into three streams. (1) Research on global economic

governance in order to understand the broader impact on the region and identifying options

for Africa in its participation in the international financial system. (2) Issues analysis to unpack

key multilateral (World Trade Organization), regional and bilateral trade negotiations. It also

considers unilateral trade policy issues lying outside of the reciprocal trade negotiations arena

as well as the implications of regional economic integration in Southern Africa and beyond.

(3) Exploration of linkages between traditional trade policy debates and other sustainable

development issues, such as climate change, investment, energy and food security.

SAIIA gratefully acknowledges the Swedish International Development Cooperation

Agency, the Danish International Development Agency, the UK Department for International

Development and the Swiss Development Corporation, which generously support the

EDIP Programme.

Programme head: Catherine Grant, [email protected]

© SAIIA August 2013

All rights are reserved. No part of this publication may be reproduced or utilised in any form by any

means, electronic or mechanical, including photocopying and recording, or by any information or

storage and retrieval system, without permission in writing from the publisher. Opinions expressed are

the responsibility of the individual authors and not of SAIIA.

Please note that all currencies are in US$ unless otherwise indicated.

A b S t r A C t

The Southern African Development Community (SADC) Protocol on Trade (PoT) was signed

in 1996 with the aim of increasing trade between member states through the elimination

of tariffs and harmonisation of customs procedures. Regional tariff phase-downs began in

2000 and the SADC Free Trade Area (FTA) has been in operation since 2008, with 85%

of SADC trade among 12 of the 15 member states now duty free. By 2012 all member

states were supposed to have joined and be working together towards the next goals of

an SADC Customs Union, Monetary Union, and finally a single SADC currency. However,

Angola, which is SADC’s second-largest economy after South Africa, shows few signs of

wanting to enter the FTA, despite having signed the PoT in 2003.

The paper unpacks the economic and political drivers behind Angola’s decision to

remain outside the FTA, and the impact its non-accession has had on its domestic economy

and the other member states within SADC. It examines the longer-term implications of

Angola’s reluctance to implement the SADC PoT, and the effect this may have on the ‘Cape

to Cairo’ Tripartite FTA, to which Angola is also a signatory and negotiator. The paper also

analyses the role of the SADC Secretariat in relation to Angola not joining the FTA. Angola’s

choices raise questions about how a member state can be allowed to renege on its

commitments with such apparent impunity, and to the detriment, as the paper argues, of

its own citizens and neighbours.

A b o u t t h e A u t h o r

Louise Redvers is a British freelance multimedia journalist who has reported from Southern

Africa since 2008, covering Angola, Zambia, South Africa, Swaziland and Mozambique.

She lived in Angola from 2008–2010, during which time she was a correspondent for the

BBC and Agence France Presse. Louise still travels to Angola regularly and reports on the

country’s politics and economics for various media outlets, including the Mail & Guardian,

The Banker, The Guardian, The Economist, FT.com, Economist Intelligence Unit, The Africa

Report, Monocole, Africa Confidential and China Economic Quarterly.

4

S A I I A O C C A S I O N A L P A P E R N U M B E R 15 2

E C O N O M I C D I P L O M A C Y P R O G R A M M E

A b b r e v I A t I o N S A N D A C r o N Y M S

bopd barrelsofoilperday

CFB Benguelarailway(CaminhodeFerrodeBenguela)

CNC Angola’sNationalShippingCouncil(ConselhoNacionaldeCarregadores)

DRC DemocraticRepublicofCongo

EPA EconomicPartnershipAgreement

FTA freetradearea

GDP grossdomesticproduct

GoA governmentofAngola

GTM Multi-sectorGroupfortheNegotiationandImplementationoftheSADC

TradeProtocol(GrupoTécnicoMultissectoriadeNegociaçãoeImplementação

doProtocolodeComérciodaSADC)

MPLA PopularMovementfortheLiberationofAngola(MovimentoPopularde

LibertaçãodeAngola)

NTB non-tariffbarrier

PND NationalDevelopmentPlan(PlanoNacionaldeDesenvolvimento)

PoT ProtocolonTrade

RoW restofworld

SADC SouthernAfricanDevelopmentCommunity

SATH SouthernAfricaTradeHub

SEZ specialeconomiczone

TFTA TripartiteFreeTradeArea

TIFI Trade,Industry,FinanceandInvestment(SADC)

UNITA NationalUnionfortheTotalIndependenceofAngola(UniãoNacionalparaa

IndependênciaTotaldeAngola)

USAID USAgencyforInternationalDevelopment

A N G O L A , T H E R E L U C T A N T S A D C T R A D E R

5


I N t r o D u C t I o N

TradeandeconomicliberalisationareattheheartoftheSouthernAfricanDevelopment

Community (SADC) and core to itsmandateof deepening regional integration

andreducingpoverty.1TheProtocolonTrade(PoT)wassignedinAugust1996by11

memberstatestopavethewayforafreetradearea(FTA)withinSADC.Afterprotracted

negotiations, thePoTentered into forceon25January2000when itwasratifiedby

two-thirdsofmemberstates,withtheexclusionofAngola, theDemocraticRepublic

ofCongo(DRC)andSeychelles.TheaimoftheSADCFTAistoincreasetradeflows

betweenmemberstatesbyreducingthetimeandcostofimportsandexportsthroughthe

eliminationoftariffs,harmonisationofcustomsprocedures,andthecreationofone-stop

borderposts.AlthoughtheFTAhasnotquiteproducedthesignificantupsurgeintrade

betweenmemberstatesthatwashopedfor,withintra-SADCtraderemainingataround

15%,2policymakersareoptimistic thatongoingworktoeliminatenon-tariffbarriers

(NTBs)andclarifyrulesoforiginwillsucceedinimprovingtradeflowsanddeepening

regionalintegration.

Angola’sNationalAssemblyapprovedaccessiontothePoTin2002andthefollowing

yearformallyaccededtotheprotocolbysubmittingtheinstrumentofaccessiontothe

SADCSecretariat.Overadecadelater,however,Angolaremainsinthe‘preparatory’stages

oftariffreductionwithnodateinsightfor implementationofthePoT,despite2012

havingbeensetasSADC’smilestoneyearforfullimplementation.3AlthoughAngola’s

failuretoimplementthePoTisreadbysomeasanindicationofweaknesswithinthe

SADCSecretariat,4itsself-imposedexclusionisalsohighlyfrustratingforSADCexporters,

forwhomthecountryofferstantalisingmarketopportunities.Withanestimated43%

ofitspopulationundertheageof155andarapidlyemergingmiddleclassthanksto

thecountry’soil-fuelledgrowth,Angolaisoverflowingwithhungryconsumerswithnew

moneytospend.Forinstance,despiteonlyhaveapopulationofaround19million,6the

countryisthethird-largestdomesticmarketforalcoholicdrinks,behindSouthAfricaand

Nigeria,7andwithsolittlebeingmadeorproducedincountry,thereisenormousscope

forexportstoAngola.

Economiesofscale,Africanlogistics8andotherNTBsmayexplainwhyitischeaper

toexportfoodtoAngolafromPortugalorBrazil,thansayfromMalawiorTanzania.Not

exploitingtradeopportunitieswithneighbouringNamibia,whichsharesaborderwith

developedSouthAfrica,thebiggestexporterintheregion,makeslesssense.Itisnot

unusualforAfricancountriestohavesignificanttradeflowswithEuropeancountries,

basedonrelationships formedduringcolonial times,andmorerecently,withChina,

whoseoutputoflow-costconsumableshasseenitbecomeamajorexportertotheAfrican

continent.However,althoughallintra-SADCtradeislowcomparedwithexchangeswith

ChinaandtheEU,inAngolaitisparticularlylow.9

ThegovernmentofAngola(GoA)hasattributednotjoiningtheSADCFTAtothe

countrynotyethaving‘theconditions’tobeinapositiontodoso.ItsaysAngolahas

onlyrecentlyemergedfromaprolongedperiodofcivilwarthatbeganin1975andended

in2002,whichdestroyeditsinfrastructureandleftitwithlittleproductiveindustry.The

GoAclaimstobewaryofopeningupthecountry’sborderstoitsneighboursforfearof

anensuingfloodofduty-freeimportshamperingeffortstorelaunchitsmanufacturing

andproductivesectorsanddamagingitseconomicdevelopment.Indeed,atthetimeof

6



writing,theGoAwasreportedtobeabouttointroduceanewcustomsregimethatwould

increaseitstoptarifffrom30%to50%fordomesticallyproduceditemssuchasbeer,soft

drinks,certainvegetables,andconstructionmaterials.Themoveisexplainedasawayof

protectingnascentlocalindustry,creatingjobsanddiversifyingtheeconomyawayfrom

oil.Ontheonehand,aflowofcheaperimportsmaydamageinfantindustries;onthe

otherallowingtheimportationofcheaperinputs(egagriculturalfertiliser,construction

materials)couldhelptostimulateeconomicproduction.Angolahaslongmaintainedthe

contradictionofprofessingtheneedtoprotectitselffromafloodofcheapgoodsfrom

neighbouringcountriesinSADC,whileremainingopentoproductsfromelsewhereinthe

world,particularlyChina.Thisstance,however,appearstobechanging,giventheplans

forthenewtariff.

ThecentralissuesguidingthepaperaretheargumentsforandagainstAngolajoiningthe

FTA;thelikelihoodofAngolaeverjoiningtheFTA;andwhatAngola’scurrent‘isolationism’

meansfortherestofSADCandtheplannedCapetoCairoTripartiteFTA(TFTA).

Figure 1: Exports from SADC countries to other SADC member states (%), 2012

0 5% 10% 15% 20% 25% 30%

Angola

DRC

Botswana

Madagascar

Lesotho

Malawi

Mauritius

Mozambique

Namibia

Seychelles

South Africa

Swaziland

Tanzania

Zambia

Zimbabwe

4%

18%

0%

5%

2%

20%

19%

24%

15%

6%

14%

10%

8%

20%

27%

Source:Author’sowncalculationsbasedon2012UNComtrademirrordatapresentedbythe

InternationalTradeCentre,http://www.trademap.org,accessedJuly2013.


7


A N g o L A A N D I t S C o N t e X t o F W A r

Angolaisthesecond-largestcountrysouthoftheSaharaaftertheDRC,withwhichit

sharesaborder,alongwithZambiaandNamibia.ItwascolonisedbythePortuguesefor

over500yearsandonlygaineditsindependencein1975.WithinweeksoftheEuropean

powerleaving,however,thecountrydescendedintoabittercivilwarthatlastednearly

threedecades.TheconflictwasacomplicatedColdWarproxy,withtheformerSoviet

UnionandCubabackingthethenMarxistMPLA(MovimentoPopulardeLibertaçãode

Angola),nowingovernment,whiletheUSandapartheidSouthAfricafavouredUNITA

(UniãoNacionalparaaIndependênciaTotaldeAngola),nowthemainoppositionparty.

ThefalloftheBerlinWallandthecollapseoftheSovietUnionsawtheseproxyinterests

fade,UNITAlosingitsWesternbackersandtheUSeventuallysupportingtheMPLA.

FollowingthemilitarydeathofUNITA’sleader,JonasSavimbi,inFebruary2002,andthe

subsequentsigningoftheLuenaMemorandumofUnderstandingon4April2002,the

gunswerefinallysilenced.

TheselongyearsofwarnearlydestroyedAngola,physically,sociallyandeconomically.

Overonemillionpeopledied,4.5 millionweredisplaced,600 000fledasrefugeesto

neighbouringcountries,some200 000weredisabled,andanestimated50 000children

were orphaned.10 With little health and education services left, and millions facing

starvationordeathbydisease,in2002thecountryhadsomeoftheworld’sworsthuman

developmentindicatorsandchildmortalityrates,andapovertyrateofover75%.Having

beenself-sufficientinfoodproductionpre-independenceandasignificantexporterof

coffee,sugarcane,andbananas,Angolaisnowanetimporteroffood.Itsfarmingsector

wasdecimatedbywar, large rural areaspepperedwithmines andhuge stretchesof

previouslyfertilearablelanddeserted.Littlemanufacturingandfoodproductionsurvived

thewar,andattemptstorestartindustrieshavebeenhamperedbythelackofelectricity

(forcinganexpensivedependenceondiesel-guzzlinggenerators),poorroadsandweak

supplychains.Withnearlyallgovernmentmoneypumpedintothewareffort,therewas

scantinvestmentoreconomicstimulation,orevenpolicy,fordecades.Moreover,the

nationalfinanceswereindisarray,withmillionsofdollarsunaccountedfor.11

ItisnotunreasonabletoseewhyAngolain2003,givenitsdireeconomicsituation,

didnotfeelinapositiontojointheFTA.Angola’ssigningofthePoTcanbereadasmore

ofagesturetoshowpoliticalcommitmenttoSADCasabloc,ratherthanasaconcrete

commitmenttotheFTA.

P o S t - W A r A N g o L A

Inthe11yearssinceAngola’s‘OutbreakofPeace’,12thecountryhasperformedasignificant

about-turn.Angolaisnowthesecond-largesteconomyinSADCafterSouthAfrica.13Gross

domesticproduct(GDP)growthhassoared–recordingdouble-digitfiguresbetween2004

and2008–andisexpectedtoexceed7%in2013,wellabovethe3%forecastforSouth

AfricaandtheSADCrateof4.2%.14

8



Figure 2: Average annual GDP growth of SADC member states (%), 2001–2012

0 2% 4% 6% 8% 10% 12%

Angola 10.3%

Botswana 4.2%

DRC 5.3%

Lesotho 3.9%

Madagascar 2.4%

Malawi 5.0%

Mauritius 3.9%

Mozambique 7.9%

Namibia 4.6%

Seychelles 2.6%

South Africa 3.4%

Swaziland 1.6%

Tanzania 6.9%

Zambia 6.0%

Zimbabwe 0.8%

SADC average 4.5%

Source:SADC(usingdatasourcedfrommemberstates),Selected Indicators 2011.Botswana:SADC,

2012, http://www.sadc.int/files/6213/6267/6607/Selected_Indicators_2011_with_charts-

06March2013_FINAL.pdf.

The GoA has been praised widely for leading the country towards macroeconomic

stability.Inflationisnowforthefirsttimeindecadesunder10%;thetaxsystemisbeing

overhauled;andnewfinancialregulationsarewinningplauditsfromtheInternational

Monetary Fund and World Bank, and boosting investor confidence.15 However,

politicallyandsociallythescarsofthewarstillrundeepinAngola,andthereisgrowing

dissatisfaction,particularlyamongyoungerpeople,aboutthelackofwealthequityand

continuinghighlevelsofpoverty.16

Nevertheless,Angolahasexperiencedincredibledevelopments,andtheGoAhasspent

billionsofdollarsonanambitiousreconstructionprogramme,buildingnewbridges,

railways,hospitals,schoolsandairports.Itisnowpossibletotraveloutsideofthecapital

Luanda,notjustfreely17butontarredroads.Whereonceitwouldhavetakendaysto

reachinteriorcitieslikeMalangeandHuambo,thesecannowbereachedinjustafew

hours’drive.Suchcitiesnowhavehotelswithelectricityandrunningwater,andpossibly


9


evenanInternetconnection.TheCaminhodeFerrodeLuanda(LuandarailroadorCFL),

whichrunsfromthecapitaltoMalange,isnowbackinfulloperation;andtheCaminho

deFerrodeBenguela(theBenguelarailwayorCFB),fromthecoastaltownofLobitoto

theborderwiththeDRCintheeast,isalsonearlycomplete;asistheCaminhodeFerro

deMoçâmedes(MoçâmedesrailwayorCFM)linkingNamibeandHuilaprovincesinthe

south.Thesethreetrunklines,builtover100yearsago,arekeystrategicpiecesinAngola’s

developmentjigsaw,offeringnewcost-effectivetransportoptionsforagriculturalgoods

andminingoutputslikecopperandironore.InthecaseoftheCFB,thetrainwilllink

theAtlanticcoasttotheinteriorofthecontinent,givingAngolathepotentialtobecome

amajorAfricantransporthub.Angola’sinvestmentintheserailwayslinkingitwithits

neighbouringcountriesreflectsitscommitmenttoregionalintegrationandtheGoA’s

activeparticipationininitiativessuchastheLobitoCorridor.

Inaddition,thereisavastnewnetworkofroadsinandaroundLuanda,withmore

planned;aswellasthreenewcommuterrail linesandwatertaxis,whichareneeded

desperately to help reduce the high levels of congestion. The sprawling slums that

surroundthecapital,whicharehometoanestimatedfivemillionpeople,areslowly

beingclearedandnewmodernhousingsuburbsarebeingconstructed.Therearealsonew

specialeconomiczones(SEZs),wheremanufacturingoperationsareslowlycomingtolife,

producingindustrialandconstructionproductsthatfordecadesAngolahashadtoimport.

C r u D e C o N D I t I o N S

Angola’srapidtransformationandimpressivegrowthstatisticshaveledittobehailedas

an‘economicmiracle’.Inreality,however,itssuccessisonetrackanddowntooil.Angola

isAfrica’ssecond-largestproducerofcrudeoilafterNigeria.Itcurrentlyproducesan

averageof1.7millionbarrelsofoilperday(bopd),andby2015planstohaveincreased

thisto2millionbopd.18

Angola’soilisablessinginthatithasgiventheGoAplentyofcashtoinvestinthe

rehabilitationofinfrastructureandinstitutions.Ithasalsobeenkeytoattractingforeign

investment,with theGoAusing itsprizeassetas leverage foroil-backed loans from

emergingpower-houseslikeChinaandBrazil,andmorerecentlytosetupaSovereign

WealthFundwith a startingpotof$5billion.With suchabigpublic construction

programmeunderway,manyoverseasprivatecompaniesarecashing in,particularly

givenAngola’slackofdomesticskillsandtechnicalability.PortugalandBrazilespecially

haveexploitedtheirlinguisticandculturaltiestoseizelucrativebusinessandtrading

opportunitiesinAngola.

Oil,however,mayalsobeconsideredAngola’scurse,withcrudeoil(thecountryhas

onlyverylimiteddomesticrefiningcapacity)19accountingforover45%ofGDPand90%

ofitsexportrevenues.20ThismeansthatnotonlyisAngolahighlyvulnerabletoglobal

commoditypriceshocks,21butthatowingtoapoisonouscombinationofDutchDisease

andalegacyofwar,ithasalsobeenproducinglittleelseofvalue,foreitherexportor

domesticconsumption.Somestudiesclaimthatitistheworld’ssecond-mostconcentrated

countryintermsofexports.22CrudeoildominatesAngola’sexportsanddeterminesits

tradingpartners.ItisbecauseofoilthatsuchasmallpercentageofAngola’sexportsgoto

SADC,wheretherearefewrefineries.

10



Figure 3: Angola’s export destinations (%), 2011 and 2012

China, 38%

US, 21%India, 9%

Taiwan, 9%

Canada, 4%

Italy, 3%France, 3%

Portugal, 3%

South Africa, 2%Other, 9%

China, 46%

US, 14%

India, 11%

Taiwan, 7%

South Africa, 4%

Canada, 3%Portugal, 3%

Spain, 2%UK, 2%

Other, 8%

Source:UNComtrade,UNComtrademirrordatapresentedbytheInternationalTradeCentre,

http://www.trademap.org,accessedJuly2013.

AsshownbyFigure3,thebulkofAngola’sexportsfor2011and2012wenttoChina,the

USandIndia.SouthAfricawastheonlycountryfromSADCthatfeaturedinthetop10;

andalthoughAngolanexportstoSouthAfricadoubledfrom2%in2011to4%in2012,

99%oftheseexportsareoil-related.23

A N g o L A ’ S I M P o r t S

AngolamaynothavemuchtoexporttoitsbrothersinSADC,butitcouldimportfood

andhouseholdgoods.AlthoughsomeAngolanproductsarestartingtobesoldinAngolan

supermarkets,mostofthebrandsoriginatefromPortugal,BrazilandChina.Sincethe

2011

2012



11

openingofSouthAfrica’sShopritesupermarketsinahandfulofAngolancities,andthe

improvementstoroadnetworksinthesouthofthecountry,therearemoreSouthAfrican

andNamibianitemsvisible, thoughstillveryfewcomparedwiththosecomingfrom

Angola’sothermaintradingpartners.MembersoftheSADCprivatesector,particularly

fromNamibiaandSouthAfrica,makenosecretoftheirfrustrationaboutthedifficulties

theyexperienceinpenetratingsuchalucrativemarket.24

In2011Angola’slargestsourceofimportswasitsformercolonialpower,Portugal

(18%);followedbyChina(15.6%);andtheUS(8.4%).SouthAfricacamesixth,providing

5%ofAngola’simports,aftertheRepublicofCongo’s7.7%andBrazil’s6%.In2012China

overtookPortugalandSouthAfricainchedintofourthplace,providing6%ofAngola’s

imports.

Figure 4: Angola’s import sources (%), 2011 and 2012

Portugal, 18%

China, 16%

US, 8%France, 4%UK, 3%

India, 3%

Namibia, 3%

Other, 26%

Republic of Congo, 8%

Brazil, 6%

South Africa, 5%

China, 21%

Portugal, 20%

US, 7%

South Africa, 6%Brazil, 6%

France, 3%UK, 3%

Belgium, 3%Netherlands, 3%

India, 3%

Other, 25%

Source: UN Comtrade mirror data presented by the International Trade Centre, http://www.

trademap.org,accessedJuly2013.

2011

2012

12



The Conselho Nacional de Carregadores (Angola’s National Shipping Council

orCNC),partoftheministryoftransport,carriesimportdataonitswebsite,though

publicationiserraticandthesiteisoftendown.For2012theCNConlyhasdataforthe

thirdandfourthquarters,andthenextmostrecententryisforthethirdquarterof2011.

Itisthereforehardtomakeyear-on-yearcomparisonsandruleoutseasonalconsiderations

(egfooditemsatChristmas)andothereventsthatcouldaffectimportflows.25

Table 1: Top 15 products Angola imported in Q4, 2012

Product Weight (Tonnes) % of total imports

Hydraulic cements 743 554,01 23,31

Malt beers 109 245,09 3,43

Meat and edible offal, fresh, chilled and frozen 107 013,81 3,36

Rice 96 285,29 3,02

Wheat flour 84 548,33 2,65

Iron/steel bars 68 004,40 2,13

Paving slabs and tiles – glazed, ceramic and for mosaics

64 209,57 2,01

Cane, beet sugar, chemical sucrose 63 649,34 2,00

Palm oil and associated refined products 54 598,32 1,71

Cereal flour (other than wheat flour) 51 467,83 1,61

Petroleum coke, petroleum bitumen and other petroleum residues

41 977,02 1,32

Flat-rolled iron (or non-alloy steel) products, 600 mm+, clad, plated or coated

40 429,86 1,27

Wine and fortified wine 36 055,47 1,13

Fruit juices 33 319,04 1,04

Mineral water, still and sparkling and other soft drinks (not fruit juices)

32 413,32 1,02

Source:AngolaShippingCouncil,CNC(ConselhoNacionaldeCarregadores),datafromhttp://

www.cnc-angola.com,accessedMarch2013.

CNC statistics also provide a breakdown of countries from which Angola imports

products.Itsreportforthefourthquarterof2011putsChinainthetopposition,followed

byPortugal,SouthKoreaandBrazil.SouthAfricacomessixth,accountingfor3.74%of

Angola’simportsinthisthree-monthperiod.TheonlyotherSADCcountrytofeaturein

thetop50isNamibia,coming30thandprovidingjust0.20%ofAngola’simports.South

Africa’sshareinthefourthquartercomparedwiththatofthethirdactuallyslippedby

4.77%,havingexportedintheearlierperiodnearly6 000moretonnesofgoodstoAngola.


13


Table 2: Top 15 countries of origin for Angolan imports in Q3 and Q4, 2012

Country % of overall imports in Q3 % of overall imports in Q4

China 32,17 27,68

Portugal 15,69 16,50

South Korea 7,09 9,61

Brazil 6,49 7,16

Belgium 3,77 3,94

South Africa 4,06 3,74

Greece N/A 3,35

France 4,43 2,92

Spain 1,70 2,62

United Arab Emirates 1,68 2,07

Thailand 1,00 1,99

India 1,90 1,86

Argentina 1,59 1,81

Turkey 2,72 1,71

Source:AngolaShippingCouncil,CNC(ConselhoNacionaldeCarregadores),datafromhttp://

www.cnc-angola.com,accessedMarch2013.

A N g o L A A N D S A D C

AngolaisafoundingmemberoftheSADCandthecountry’srulingMPLAhasstronglinks

withmanyoftheregion’sotherrulingpartiesandleadership,basedonhistoricsolidarity

duringliberationstruggles.Thecountryplaysaleadingroleinthebloc,particularlywith

regardstoregionalsecurityissues.PresidentJosé EduardodosSantos,inpowersince

1979,isthebloc’slongest-servingleader,andinthedecadesincetheendofAngola’swar,

hehasmodelledhimselfasaregionalandcontinentalwiseman.Angolalikestotakean

activeroleinnegotiationsinvolvingconflictsandmilitaryissuesinSADCcountries,as

evidencedbyrecenteventsintheDRC,26towhichAngolahassentmilitarysupporton

morethanoneoccasion.

Asamemberstate,AngolaplaysitsparthostingandattendingallthevariousSADC

summits,meetings,workshopsandtrainingsessions,includingsomedirectlyrelatedto

theFTAinwhichitdoesnotparticipate.However,Angola’stradeprofilewithSADCis

minimal,withonly4%ofits2012exportsgoingtoSADCcountries.Thisissignificantly

lowerthanallotherSADCmemberstates,withtheexceptionoftheDRCandLesotho27

(seeFigure1).

14



A N g o L A ’ S e A r LY F t A N e g o t I A t I o N S

Angola’sparliamentapprovedaccessiontothePoTattheendof2002(twoyearsafter

themajorityoftherestofthebloc).InMarch2003itformallyaccededtotheprotocol

bysubmittingtheinstrumentofaccessiontotheSADCSecretariat.Thissubmissionwas

followedbyaformalrequesttotheSecretariatforassistancetoprepareatariffreduction

scheduletobeabletoimplementthePoTandjointheFTA.

InApril2003ateamfromtheSADCSecretariat28visitedLuandatocollectpreliminary

informationwithwhichtostartpreparingatariffphase-downoffer.Thevisitincorporated

interviewsandmeetingswithgovernment(includingseniorofficialsfromtheministriesof

finance,commerceandtrade),theprivatesectorandmembersofthedonorcommunity.

FollowingtheGoA’sreceiptofanassessmentmadebytheSecretariatinOctoberand

itssubsequentresponse,afullSADCSecretariatTradeMissiontoLuandatookplacein

December2003.29

InApril2004areportwaspublishedonAngola’sreadinesstoimplementthePoT.The

52-pagedocument30givesanassessmentofAngola’seconomy,presentingastarting-point

discussionforatariffphase-down,includingoptionsforseparatetariffsforSouthAfrica

andtheothermemberstates.Itoffersstrongcounterargumentstogovernmentfearsabout

floodsofcheapimportsandtheassumedprotectionistapproach.Thereportwaspresented

totheGoAin2004,which,accordingtooneformerSADCemployee,‘promptlystuckit

onashelftogatherdust’.31

The domestic years

From2004–2008,whiletherestoftheSADCmemberstateswerebusyputtinginplace

theirtariffphase-downoffersreadytoenterthefreetradezone,Angolaremainedquiet.As

wellasneedingtostabiliseitsdomesticeconomy,politicallythegovernmentwasfocused

onholdingitsfirstpeacetimeelection,whichfinallytookplaceinSeptember2008and

handedtheMPLAaparliamentarymajorityofover81%.Thatthepoll,thefirsttobeheld

in16yearsandonlythesecondinAngola’sindependenthistory,tookplacewithoutmajor

incidentwasanimportantmilestoneforAngola,giventhatthe1992votehadturnedso

bloody.32

Enter China

JustaftertheSADCtrademissionin2003anditsfollow-upreportin2004,Angolaformed

anewtradingpartner,onethatwouldprovetobemoresignificantthananyprevious–and

probablyanyfuture–partner.TheAngola–Chinarelationshipisdescribedbyitsrespective

governmentsastheultimate ‘win-win’scenario.Intheearlyyearsofpeace,although

Angola’soilanddiamondexportswerepickingupandbringingincash,thecountrywas

inseriousneedofhelptorebuilditswar-ravagedinfrastructure.Westernnationsshunned

aproposeddonorconferencein2003,concernedaboutwhetherthepeacewouldlast,

Angola’spoorreputationonrevenuemanagementandtheFrenchinvestigationintowar-

timearmsdeals.33China,whichhadjustlaunchedits‘goingout’strategy,sawagolden

opportunity,andinMarch2004theChineseministryoftradeandAngolanministryof

financeformallysigneda$2billionloandeal.ThiscreditlinewastopayforChinese


15


companies,materialsandknow-how(and,itlaterbecameapparent,importedlabour)to

carryoutreconstructionprojectsacrossAngola.Itwasnotfreemoney(tobepaidover

12yearsatLIBORplus1.5%)andwouldbepaidbackwithcrudeoil,ratherthanhard

currency;butitcamewithoutgovernanceorotherconditionsthatWesternnationsapply

totheiraidandloans.

The‘Angolamode’,asithascometobeknown,iswelldocumented.34Notonlyhas

itseenanestimated$15 billionofChinesecreditopeneduptoAngolasince2004;ithas

alsoradicallychangedAngola’stradeandglobalprofile.AngolaisnowChina’ssecond-

largestAfricantradingpartner.AccordingtoChina’sGeneralAdministrationofCustoms,

bilateraltradebetweenAngolaandChinareached$27.67billionin2011,up11.5%onthe

previous12months.China’simportsfromAngolaincreasedby9.1%,to$24.89billion,

whileChina’sexportstoAngolaincreasedby38.8%.35

Lacking the ‘conditions’ to join the FTA

InAugust2008theSADCFTAwas launchedformallyataheadsofstatesummit in

Sandton,Johannesburg,SouthAfrica,ataceremonyattendedbyPresidentdosSantos.36

Angola’sstatenewsagency,Angola Press,37reportedonthelaunchandnotedthatit‘would

createanenlargedmarket,creatingthepotentialfortrade,economicdevelopmentandthe

creationofjobs’.38Angola Press alsostatedthatalthoughAngolawouldintegrateintothe

FTA,‘itwillnotbeinthenextthreeyears’.39Justpriortothesummit,Angola’sMinisterof

Planning,AnaDiasLourenço,statedthat:40

Forreasonsthatweallknow,ourcountryisnotgoingtointegrateintotheFTAthisyear

owingtothefactthatwearenotinconditionstodoso.[…]Giventhefactthecountrywas

atwarforalongtimeandisinaphaseofreconstructionandre-launchingofitsdomestic

productionweconsiderthatwearenotyetwithconditionstointegrateintotheFreeTrade

Area[…]Intime,whentheconditionsarecreated,whichweconsiderimportanttotake

thisstep,wewill.

Missed deadlines

By2010,accordingtotheoriginalroadmapforregionalintegrationsetoutbythe2003

RegionalIndicativeStrategicDevelopmentPlan,SADCshouldhavelauncheditscustoms

unionandbeenoncourseforacommonmarketby2015.Ataheadsofstatesummitin

WindhoekNamibiainAugust2010,thesemisseddeadlineswereacknowledgedanda

high-levelexpertgroupwasestablishedtoinvestigatethecausesofbottleneckswiththe

FTAandtoputforwardsolutionstorectifythisissue.

Inthesameweekasthisheadsofstatesummit,Angola Presspublishedaninterview

withMinisterLourenço,inwhichshereiteratedAngola’sreasonsforremainingoutside

theFTA,repeatingthatthecountryhadonlyjustconcludeditslongwarandthusdid

nothavethesuitable ‘conditions’forjoiningthegroup.41Theministerreiteratedthat

therehadneverbeenasetdateforAngolatoenterintotheFTA,andthattheprocesswas

dependentonthecountry’snationalreconstructionprogrammeandtherelaunchingand

strengtheningofthenationalprivatesector:42

16



Thesethingsdonotcomewithdeadlines[…]WeareworkingandwhentheExecutive

considersthatithastheconditionstoshareintheregionalmarket,andtoofferproductsand

openupitsborders,certainlyitwilldothat[…]It’sgoodforusthattheothersunderstand

thatthereisnointentionwhatsoeverofusremainingonthesidelinesofthisprocess,but,

Angolaneedstobebetterpreparedtoconsolidateitsinternalpositioninordertobeableto

shareinafreetradearea.

High-level discussions

InFebruary2011–withjust10monthstogobeforethe2012Milestoneforallmember

statestobeoperatingwithintheFTA–SADC’sExecutiveSecretary,TomazSalomão,led

ahigh-levelmissiontoLuanda.Thiswassupposedtobeinpreparationforavisitbya

technicalteamfromtheSecretariatwhowouldassessAngola’sindustrialrehabilitation

effortsandassistwithpreparationsforatariffphase-downoffer.

On the sidelinesof themission, JoãoCaholo, SADC’sAngolandeputy executive

secretary(withresponsibilityforregionalintegration),gaveseveralinterviewstoAngolan

statemedia.Thearticlesreportedthathesaidtherewas‘engagementandwillingness’

fromtheGoA,andAngolacould‘intheshortterm’jointheFTA.43‘Wecansaythatit’sa

workinprogressandwehopethatsoonthegovernmentcandemonstrateitswillingness

tosubmititsproposalforjoining’,hewasquotedassaying.Caholo,formerlyAngola’s

deputyfisheriesminister,addedthatitwouldbegoodifAngolaandtheDRC,alsoyetto

join,enteredintotheFTA,‘giventheirconsumercapacity’andthe‘sizeoftheirmarkets’.44

Postponement sine die

However,despitethisoptimismafull-trademissionthathadbeenplannedtotakeplace

themonthafterthevisitfromSalamaoandCaholodidnotgoahead.Accordingtothe

SADCTrade,Industry,FinanceandInvestment(TIFI)DirectorateattheSecretariatin

Gaborone,thevisitwaspostponedattherequestoftheGoA.Theteamweretoassess

‘ongoingeffortsbytheGoAtowardsindustrialrehabilitationandareasrelatedtoeconomic

andinfrastructuredevelopment’and‘assistAngolawithpreparationsofatariffphase

downoffer’.45TIFIsaidthatafurthertrademissionscheduledforMarch2012wasalso

postponed,sine die,againattherequestoftheGoA.

InNovember2012alargeAngolandelegation,includingseveralministersandsenior

diplomatsfromaroundtheregion,attendedtheSADCCommitteeofMinistersofTrade,

heldinMaputo,Mozambique.ProgressontheimplementationofthePoTwasakey

agendaitem,anditwasnotedthatSeychelleshadtabledatariffofferandthattheDRChad

aroadmapwithfullimplementationtargetedforJanuary2015.46Angola,however,hadno

progresstoreporton,andtherecordofthemeetingsimplyacknowledgedanobservation

madebytheSouthernAfricaTradeHub(SATH)thatAngolahad‘onlyrecentlyemerged

fromaprotractedperiodofcivilstrifewhichhadheavilydamagedthecountry’sproductive

capacity’.47Itnotedthatthecountry‘hasembarkedonaprogrammedesignedtoimprove

andincreaseinvestmentsininfrastructure,developmentandmodernisation’.48Thesame

reportnotedthatAngola‘hadadvisedSeniorOfficialsthatitisintheprocessofreviewing

itstariffstructure’andthatthe‘SecretariatwouldcontinuetoworkwithAngolainorder


17


toassistittofullyparticipateandimplementtheSADCPoT’.AsofMarch2013,however,

TIFIsaidnofollow-upmeetingshadbeenplannedwithAngolatodiscussatariffofferor

anyotheraspectsofimplementingthePoT.

ExtensiveeffortsbySAIIAtoformallyengagewiththeGoAaboutitspositiononthe

FTAforthepurposesofthispaperwerefruitless.Ourrequestswerepassedfromministry

toministryandfromaidetoaide,emailsandlettersreceivedandread,butthequestions,

unfortunately,wereneveranswered.49

InApril2013,asthispaperwasenteringitsfinaledit,reportsappearedintheAngolan

media50thattheGoAwasabouttolaunchanewtariffregimetoincreaseimportduties

oncertainitemsthatwereproduceddomestically,suchasbeer,softdrinks,andsome

constructionmaterials.Aseniorcustomsofficialwasquotedassayingthatsomeduties

wouldberaisedfromthecurrentmaximumof30%toanewmaximumof50%,though

hedidnotspecifypreciselywhichproductswouldbeaffected.Subsequentarticlesin

thelocalpresshavefeaturedinterviewswithlocalbusinessmensupportingthechange

becausetheybelieveitwillprotectlocalindustriesagainstcheapimports.Althoughthere

hasbeennoformalannouncementaboutthenewduties,exceptastatemediareport

thatthelegislationwasunderdiscussioninparliament,thetariffsareinlinewithGoA’s

policiestoprotectlocalindustry,createjobs,increasedomesticoutput,reduceimports

anddiversifytheeconomyawayfromitsdependenceonoil.However,raisingtariffsin

ordertoprotectdomesticproductionsendsastrongmessagetoAngola’sneighboursin

SADCthatitisnot,fornow,seekingtoincreasetradeflows,infactquitetheopposite.

W h Y D o e S N ’ t A N g o L A W A N t t o J o I N t h e F t A ?

Asdiscussed,theGoAsaysitdoesnothavethe‘conditions’tojointheSADCFTAowingto

thecountry’slackofindustry,andlackofexportablegoodsorresources,apartfromcrude

oil.Withfactoriesandagricultureonlyjustrestarting,followingaslower-than-anticipated

diversificationoftheeconomy,51theGoAfearsthatwhatthecountryisproducingwillnot

beabletocompeteonpricewithimportsfromneighbouringcountries,particularlySouth

Africa,whichhasthecontinent’smostdevelopedindustrialandmanufacturingsector.At

aglanceAngola’sproductivesectors(suchasagriculture,manufacturing,foodprocessing)

seemtosupporttheGoA’sposition.Progresshasbeenslow,despitesignificantgovernment

propagandaaboutthesuccessandreachofnewschemes.

DespiteAngola’s enormous agriculturalpotential andgood rainfall,muchof the

farmingcontinuestobeonasubsistencebasis.Smallfamilyfarmsareproducingjust

enoughtoeatwithlittleconsiderationforeconomiesofscaletosourcecheaperinputs

likeseedsandfertiliserortosellcommerciallybeyondthelocalmarketplace.In2009a

governmentcreditschemewaslaunchedgivingsmallandmediumfarmersaccesstoapot

of$350 milliontohelpraisetheiroutput.Theconceptwaswelcomedwarmly,buthas

struggledlogisticallywithmoneynotgettingtowhereitshouldwithinagreedtimeframes.

Furthermore,the2011–2012droughthasleftanumberoffarmersheavilyindebtedbut

withoutmuchtoshowforitapartfromfailedcrops.

A lackofelectricityhasalsobeenamajorproblem.Energysupplies,even in the

capitalLuandaandotherbuilt-upareas,aresoerraticthateverybusinesshasatleast

onegenerator,which, far frombeingabackup, isoftenthemainandonlysourceof

18



power.Thishampersfoodproductiontoobecausewithoutpower,fish,cropsandmeat

cannotbekeptchilledandmustbesoldimmediatelyortransportedtolocationswith

accesstorefrigeration.Thisinvolveshavingadequatetransportanddecentroads,plusthe

logisticalnetworksacrosslargegeographicalareas.Itisnotuncommontoreadreportsin

theAngolanstatemediaoftonnesofrottingcropsthathavebeencultivatedandharvested

buthavenotfoundtheirwaytomarket.

Runningfoodprocessingoranyotherfactoryongeneratorsisexpensive,notjust

becauseofthedieselconsumption,butalsobecauseofthegeneratormaintenanceand

spareparts–supposingtheseareavailable,astheywillalmostcertainlynotbemade

locally.WhenSouthAfrica’sNampakBevcanopenedits$160 millioncanningfactory

outsideLuandainJanuary2011,staffsaid52thatthecostofrunningthegeneratorswas

onlysupportablegiventheeconomiesofscaleandtheirlargeorderbook,beingthefirst

factoryofitskind(producingcansonsiteaswellascanning)tooperateinAngola,which

hasahugemarketforsoftdrinks.Thegovernmentisawareofitsenergydeficitandin

2010announcedaninvestmentof$18 billioninpowergenerationandsupply(mainly

throughhydroelectricprojects).ThethenMinisterofState,CarlosMariaFeijó,saidpower

cutswouldbeathingofthepastby2016,53andinearly2013MinisterofEnergyand

Water,JoãoBaptistaBorges,announcedplanstoincreasecapacityfive-foldinthenextfour

years,fromthecurrentoutputof1 200MWto6 200MWby2016.Significantinvestment

hasgoneintoelectricitygenerationfromdams,suchasCapandaandGove,butalsointo

transmissionanddistribution,vianewsubstationsandgrids.

AlthoughmoreAngolanproduceisbecomingavailableforpurchaseinsupermarkets,

alargeamountoffruit,vegetablesandmeatstockedontheshelvesisstillflowninfrom

Portugal54andelsewhere.AndalthoughAngolanowhasseveralcementfactories,theyare

reportedtoberunningbelowtheircapacity,andwhattheydoproducecannotcompete

pricewisewithChineseimports.55

ItisclearthatthereareobstaclestoovercomebeforeAngolabecomesasignificant

exporterofanythingbeyondcrudeoil,buttherearegreenshootsofrecoverywithin

theproductivesectors.Althoughaccuratedetailsarehardtocomeby,therehavebeen

anumberofarticlesinAngolanstatemediadiscussingpromisingdevelopments,from

newfoodprocessingplantsandrefrigerationtofactoriesmakingpipes,cablesandother

materialsthatwerepreviouslyimported.TheSEZinViana,ontheoutskirtsofLuanda,is

fillingupwithbothdomesticandoverseascompanies.SEZshavealsobeenplannedfora

numberofothertownsandprovinces.

Inagriculture,therearenewcommercialfarmsspringinguparoundthecountryand

manymoreplanned.In2012,pan-Africancongolomorate,Lonrho,startedexportingfruit

andvegetablesintoAngolaviaairfreightthroughitsRollexsubsidiary.CEOGeoffrey

WhiteconfirmedinaninterviewinApril201356thatthecompanywasintheprocessof

leasinglandinseveralprovincesinAngolawithaviewtogrowingfruitandvegetables

locally.Hesaidthesuccessoftheimportshadidentifiedtherewasamarket,andthatthe

longer-termplanwastoreplacetheair-freightedproducewithAngolan-grownproduce.

Various government aid programmes, such as the US Agency for International

Development(USAID)andtheBrazilianAgriculturalResearchCorporation,haveprovided

fundingtohelpsmallfarmersimprovetheirtechniquesandtoestablishco-operatives.

MoneyhasalsocomefromChina,whichissettingupseveralrurallaboratoriesandrice-

supportschemes,aswellasfromVietnamandSouthKorea.InMarch2013,Ministerof


19


Trade,RosaPacavira,announcedthecreationofa‘rurallogisticsagent’,whichshesaid

willhelptoregulateandpromotesalesexchangesbetweensmallfarmersandbuyers,

therebyreducingbottlenecks.

Asignificantnewdevelopmentisthe410 000hectarePóloAgro-IndustrialdeCapanda

inMalangeprovice.Stateentity,SociedadedeDesenvolvimentodoPóloAgro-industrial

deCapanda(SODEPAC),offersconcessionstodomesticandforeigninvestors(similarto

howSonangolallocatesoilblocks)todevelopthelandforagriculturaluse.TheGoAhas

notbeenshyinurgingpeopletocometoAngolatoinvest,andhasprovidedfavourable

taxbreaksaimedatencouragingmoreinvestorstobringtheircapitalandexpertise.The

DevelopmentBankofSouthAfricaisunderstoodtobeconsideringseveralprojectsinthe

area.Capanda’slocation,closetothenewlyrestoredCapandadam,hasavailableelectricity,

thusreducingthecostofagriprocessingandrefrigeration.TheBIOCOMsugarcaneproject

(ajointventureamongSonangol,privateAngolaninvestorsandBrazilianengineering

giant,Odebrecht,toproducesugar,ethanolandelectricity)alsofallsinsidetheCapanda

boundary.Thelong-termplanisforsmallholderfarmerstobeabletosharetheeconomies

ofscaleofthecommercialproducersintermsofbuyinginputsandaccessingmarkets.

Theminingsectorisalsoprogressing,diversifyingbeyonddiamondswithseveralnew

ironore,copperandothermetalminescurrentlyattheexplorationstages,withfirst

productionslatedfor2015.Rawmineralsaretosomeextentlikecrudeoil,inthatthey

offerlittlebenefittomostSADCmemberstates.However,longer-termplanstobuild

aluminumsmelterandsteelplants,onceelectricity supplygapsare resolved,would

createseriousexportpotential.Thiswillbecomplementedbytheimprovedrailandroad

infrastructureinAngola’sinterior,throughprojectssuchastheLobitoCorridor,57which

willprovidegoodaccessintoZambiaandtheDRC.

Since2011therehasbeenstronggovernmentfocusonhelpingandpromotingsmall

andmediumbusinesses,includingcreditschemesandincentivesforentrepreneurs,like

AngolaInvesteandtheFundoActivodeCapitaldeRiscoAngolano(FACRA),aswell

asmuch-neededeffortstostreamlinethebusinessenvironment,whichisconsideredby

variousagenciesasoneofthemostconvolutedintheworld58andinwhichcorruptionis

endemic.59

Changesaredefinitelyhappening,andthoughtheymaynotbeasfastasdesired,

theGoAcannotcontinueindefinitelytohidebehinditswar-damagedinfrastructureand

lackofindustrialcapacityasanexcusetostayoutsideoftheFTA.April2013marked

11yearssincetheendofthecivilwar,and10yearssincetheGoAagreedtotakepartin

theFTA.Furthermore,giventhatAngola’stradewithotherSADCcountriesisalreadyso

low,itcouldnotarguethateliminatingtariffswoulddenythegovernmentanysignificant

revenue.

t h e o F F I C I A L v I e W

According to Angola’s 2013–2017 Plano Nacional de Desenvolvimento (National

DevelopmentPlanorPND),thegovernmentisfocusedoncreatingatradepolicythat

‘safeguardsthestrongcommercialandeconomicinterestsofthecountry’.Usingstrategic

publicandprivateinvestment,theGoAwantstoboostcompetitiveproductivecapacity

toallowthediversificationoftheeconomy.60Thisdiversificationiscrucialonseveral

20



fronts.ReducingAngola’sdependenceoncrudeoilforrevenueswillreducethecountry’s

exposuretooilpriceshocks.Investinginindustryandagriculturewillinturncreate

morejobs.Morelocalproduction,particularlyoffood,shouldmeanfewerimportsanda

reductioninlivingcosts.However,thefocusonboostingproductivecapacityappearsto

leavelittleroomforboostingregionaltrade.

Asdiscussed,directrepeatedeffortstoengagedirectlywiththeGoAontheirpolicy

positiontowardstheSADCFTAwereunsuccessful.However,awindowintotheGoA’s

thinkingwasofferedviaapublicpresentationinLuandainFebruary2013,wherethe

SecretaryofStateforIndustry,KialaGabriel,gaveatalkaboutAngolaanditsforeigntrade

outlook.FollowingabriefhistoryofAngola’snegotiationswithSADC,Gabrielstated

thattheGoAsignedthePoTin2003butthatitwasnotpossibleatthattimeforatariff

offertobepresented.In2008–aftertheFTAhadbegunoperatingfor12othermember

states–theGoAsetuptheMulti-SectoralTechnicalGroup(GTM)fortheNegotiation

andImplementationoftheSADCTradeProtocol,whichwouldtakeresponsibilityfor

theSADCPoTnegotiationsandthepreparationofatariffoffer.Theministryofindustry

wasnominatedtoleadtheGTM,althoughtheministriesoffinance,planning,tradeand

foreignaffairswouldalsoplayanintegralroleintheprocess.Gabrielnoted,however,that

thegrouphadbeenaffectedbygovernmentministerialreshuffles,whichhadledtoseveral

prominentmembersleavingtheGTMwhentheyweregivenotherportfolios.Itisnotclear

whethertheGTMisstillfunctioningtoday.

Gabrielfurtherobservedthat:61

SincetheentryintoforceoftheFTAin2008,thebenefitsarisingarenotvisibleandinter-

regionaltradehasnotgrownasitwouldhavebeenhoped.Somememberstateswhodid

begintheimplementationprocessarenowseekingexemptionsbecausetheyarenotableto

honourthecommitmentscomingfromtheliberalizationoftrade.

ReferringtotariffdiscussionswithSADCin2011,GabrielsaidthatSADC’sproposedtariff

offerdidnotfitwithAngola’sexistingcustomsregime,whichhesaidwasintheprocessof

beingrevised.Hestressedthattheformulationofatariffphase-downoffermusttakeinto

account:‘Thenecessitytoguaranteeconditionsforthecreationofacompetitivenational

industry,ensuringthepossibilityofthestrategyofthereindustrializationofAngolaand

theimplementationof(short,mediumandlong-term)governmentprogrammes’.62

GabrielrecommendedthatgivenitsmembershipofSADCandits‘commitmentto

regional integration’, Angola would ‘attentively accompany all regional negotiation

processes’,includingtheimplementationoftheSADCFTA,thenegotiationsfortheSADC

EconomicPartnershipAgreement(EPA),andthenegotiationsfortheTFTA.However,

thiswouldbedonewithintheparametersofpolicysetoutinthe2013–2017PND,which

statesthatnationalindustriesmustbeprotected.Itisclearfromthispresentation–and

theGoA’sapproachtoitsengagementwiththeSADC–thattheGoAstillholdsmany

reservationsaboutjoiningtheFTA,evenifitdoesappeartobedevelopingthe‘conditions’

tocompetewithotherSADCplayers.Thenewtariffregimethatappearstobeonitsway

ishighlyprotectionist,andsendsaclearsignalthatfornowAngolaisnotinterestedin

increasingtradewithitsregionalpartners.

It isnosecretthatAngola’scontinued ‘coolness’ towardstheFTAfrustratesmany

withinSADCcircles,andnotjusttheprivate-sectorstakeholderswhofeeltheyaremissing


21


outonlucrativeexportopportunities.Arecurringcomplaintfromdifferentcountriesin

theblochasbeenthelackoftransparencyaboutAngola’sposition,difficultyinaccessing

tradedataorofficialdocuments,63andaperceivedreluctance fromofficials tospeak

directlyoropenly.Onetradespecialistnotedthat‘Angolaattendsallthemeetings,brings

thelargestdelegations.Theyalwayswanttodiscusseverythingandeverybody’sbusiness,

butwhenitcomestotheirownpositionandwhattheyaredoing,theyjusttalkaboutthe

warandaskformoretime.’Headded:64

It’salways‘waitandsee’and‘whenthetimecomeswewillcomply’,but‘thetime’never

seemstocomeandeverybodyjustkeepswaitingbutnotseeing.It’shardtoknowifAngola

willeverjointheFTAoriftheyarejuststringingeveryonealong.

ConsultantswhohavevisitedAngolahaveobservedasignificantinterestfromprivate-

sectorstakeholdersinlearningmoreabouttheFTA,thoughtheysaidtheyalsocame

acrossahighlevelofsuspicionabouttheprocess.OneformerSADCstaffmembersaid:65

Ononehand,thisindicatestomealackoffrankdialoguebetweengovernmentandthe

privatesectorandquitepossiblyaswelladeliberatepropagandaagainsttheFTA.Butonthe

other,ifyouconsiderhowclosebusinessandpoliticsareintertwinedinAngola,perhapsit’s

theprivatesectorwhichisdiscouragingthegovernment,ratherthantheotherwayround.

SADC’s role

TheSADCTIFIDirectoratehasstatedthat‘WeofcourseexpectandhopethatAngola

willeventuallyjointheFTAbutitmaybespeculativetoprovideatimeframetothis’.66

ItseemsthatfromsomewhereinsideAngolathereisabrakebeingpushedtopreventnot

justentryintotheSADCFTAbutalsoanyopendialoguewiththeSADCSecretariator

othermemberstatesabouttheprocess.

Despiteitsself-declaredmandatetopromotedeeperregionalintegration,whichwould

surelysuggestaresponsibilitytowardsdrivingAngola’sentryintotheFTA,theSADC

SecretariatseemstoallowAngolatocarryonunchecked.ItsaysthatAngolaisasovereign

country,whosedecisionsandpositionsmustberespected,andthattheSADCSecretariat

ismerelyan‘enabler’tocarryouttheworkofthememberstates,ofwhichAngolais

one.Thisapparenthands-offapproachisasourceofgreatirritationwithinregionaltrade

circles,wherepeoplerefertotheSecretariatasa‘powerlesspostbox’thatis‘weigheddown

withredtape’and‘lackscapacityorwilltoholdmemberstatestoaccount’.Oneformer

seniorstaffmembernotedthat‘thebestwaytokeepyourjobattheSADCSecretariatis

nottodoyourjob’,lamentingthelackofrespectfordeadlinesandtheenduringtolerance

ofprotocolviolations.67

JurgenHoffmann,atradeadvisorwiththeNamibianAgriculturalTradeForum,a

private-sectorgroupinvolvedintradenegotiationsattheSADC,SADCEPAandTFTA

levels,isfrustratedthatAngolaremainsoutsidetheFTA.Hesaidalthoughtherewere

questionsabouthowAngolaapproachedthePoT,Angola’spositionhadmoretodowith

SADC’slackofenforcement.‘SADCsimplydoesnothavetheteethtomakeAngolacomply

withtherules-basedagreementthatSADCshouldbe’,68Hoffmannnoted.

22



Protectionism

InevaluatingtheGoA’spositiontowardstheSADCFTA,whatcomesacrossthestrongest

isitsprotectionistattitude,anditsfearofbeingfloodedbycheapimportsthatcould

underminetheplannedrelaunchofthecountry’sindustrialandmanufacturingsectors.

Certainly, thiscanbeappreciatedtosomeextent.Allowingtariff-free importsof, for

example, fruit juicefromSouthAfrica,producedingreaterquantitiesbya largeand

establishedfirmthathaslowermarginsandthusalower-costproduct,wouldclearly

undermineeffortstobottlejuicedomesticallyinAngola,wherefruitisinlargesupply

butelectricity,packagingmaterialsandsupplychainslessso.However,itishardnot

toseedoublestandardsoverAngola’sreluctancetoallowcheapSADCgoodsintothe

market,giventheopenaccess ithasextendedtoChina,PortugalandBrazil.(Surely

theflowofcheapproductsfromthosecountrieshasslowedeffortstorebootdomestic

productionmorethangoodsfrom,say,SouthAfricamaydo?)Theproposednewimport

tariffswill,itisunderstood,applydutiesofupto50%oncertainfooditemsandmaterials

thatareproduceddomestically.Thismayhelptoleveltheplayingfield,butwithsucha

protectionistattitude,itishardtoseeAngolawantingtoenterintotheSADCFTAinthe

near,orevenmid-term,future.

InareportontheperformanceoftheSADCFTA,producedforSATHin2010,Frank

Flatterswarnsagainstprotectionistpoliciesand their adoption topromotedomestic

industry.69Althoughhisanalysisisfocusedonmemberstatesalreadyparticipatinginthe

FTA,FlattersmakesseveralpertinentpointsthatcanenlightenourconsiderationofAngola

andthequestionofprotectionism.HeobservestwolevelsofinteractionwithSADC:‘high

levelpoliticalvisionariesguidedbydreamsofandplansfordevelopingagreaterSouthern

Africa’versus‘tradenegotiators,whosee“concessions”ontheuseoftariffs,NTBsand

othereconomicinstrumentsasasurrenderofsovereignty.’70Flattersnotes:71

Tradenegotiationsareoftendrivenbyamercantilistfiction,thatimportsareaneviltobe

avoidedandthattradeisazerosumgame.[…]Mostofwhatisneededtoimproveany

country’sbusinessenvironmentandinternationalcompetitivenesscanbedoneathome.

Itdoesnothavetobe‘negotiated’withothercountries.[…]Negotiatorsmoreoftensee

themselvesasrepresentativesofdomesticintereststhatmightbenegativelyaffectedbytrade

reform;theyseetheirmain‘stakeholders’asexistinginvestorsandproducersthatbenefit

fromcurrenttraderestrictions,andnotthosethatcompete inworldmarketsor future

investors,producers,workersandconsumersthatwillbenefitfromimprovementsinthe

businessenvironmentarisingfromtradereform.

TheseobservationsstrikeattheheartofAngola’spositiononSADCandtheFTA.Angola’s

tradepolicyishighlyprotectionist–andwillbecomemoresoiftheproposed50%tariff

dutiesareapplied.InthesamereportFlattersquestionsthewisdomof‘infantindustry’72

protectionschemesandarguesthatprioritisinglocalproductscanleadtoreducedquality

andchoice,anddistortthelocalmarket.HegivesanexamplefromNamibiawhere,prior

totheformationoftheSADCFTA,aflourmillinggrouptookadvantageofaninfant

industryprovisionavailabletomembersoftheSouthernAfricanCustomsUnion.73Ahead

ofbuildingapastafactoryinNamibia,thefirmsecuredfromthegovernmentafour-year

40%dutyonimportedpasta,74followedbyafurtherfouryearsforgradualphase-out.The


23


ideawasthatthiswouldgivethelocalcompanytimetoestablishitsproductinthelocal

marketplaceatacompetitiveprice.Flattersisscathinginhisanalysisofthescheme.

• Smallincreasesindemandforlocalwheatdidnotaffectthepricereceivedbyfarmers.

Theyreceivednomorethanthepre-tariffworld-marketimport-parityprice,regardless

oflocaldemand.

• Increasedimportdutiesensuredthatconsumershadmuchlesschoiceinbuyingpasta

becausehighpricesandlowsalesvolumesof‘normalpasta’madethisanunprofitable

productformostsupermarketstostock.

• Thelocallyproducedpastahadadifferentflavourtoimportedproducts(owingtoa

hightemperatureprocessadaptedforflourmilledfromlocalwheatratherthanhigher

qualitydurumwheat),whichloweredmarketdemand.

• Thepastafactoryoperatingatfullcapacitywiththreeshiftsemployedatotalof20

workers (10 less than theminimumpromisedwhenapplying for infant industry

protection).

• Prior tothe factory’sestablishment,another localpastaproducerservedthe local

marketwithpastamadefromflourpurchasedfromthemillingcompanythatoperates

thenewpastaplant.Shortlyaftertheplant’sopening,theoldproducer’slineofcredit

withthemillerwasrevokedandithadtocloseitsfactory,leadingtojoblosses.75

TherearelessonshereforAngola.Itisquestionablewhetherassigninghightariffsto

certainvegetables,forinstancepotatoes,inabidtodetercompaniesfromimportation,

willreallyleadtoagrowthinAngola’spotatomarket.Morelikelyperhaps,isthatsucha

move–asinthecaseoftheNamibianpastafactory–wouldleadtosmallerchoice,less

desirableproduceandlittledirectgainforproducersinthesupplychain.Therearealso

risksthatAngolawillapplytheseprotectionisttariffsbeforeitsdomesticproductivesector

isready,whichcouldleadtosupply-sideconstraintsandpricerises.

TheGoA’sprotectioniststancewasquestionedinthe2004SADCreport,76produced

afterthefirsttrademissiontoLuandatodiscusstheFTA.Theauthorspointoutthatby

openingupmarketstoregionalimports,Angolacouldhelptostimulateitseconomy,

increasecompetition,andlowerpricesandthuspoverty.Thereporthighlightstwokey

points:77

• Thesmallnessofthedomesticmarketdoesnotserveasasufficientbasetodevelop

industriesthatcancompeteinwidermarkets.Internationaltrade,andopennesstoit,

hastoplayanimportantroleinAngola’sstrategytostimulategrowthandreducepoverty.

• Betteraccessto importsofgoodsandservicesmakesnewinputs,newtechnologies

andnewmanagementtechniquesavailabletostimulateefficientproductioncapacity.

BecomingpartytoaregionaltradeintegrationschemesuchastheSADCfreetrade

arrangement(FTA)isbutoneofthestrategiesavailabletobenefitfromtheopportunities

ofinternationaleconomicintegration.

The reportnotes that a tangiblebenefit ofAngola joining theSADCFTAwouldbe

increasedaccesstosourcingagriculturalinputsandseedsatlowercosts.GivenAngola’s

dependence on imports for its food requirements78 and food accounting for such a

24



significantshareoflow-incomepeople’sexpenditure,loweringfoodpricesis‘essential’to

tacklingfoodinsecurityandhighlevelsofpoverty.79

Angola’sdependenceonimportedfoodhasledtoitsrankingasoneofthemostfood-

insecurecountriesintheworld80anditscapital,Luanda,asoneofthemostexpensive

citiesintheworld.81ThepotentialforSADCcountries(especiallythosesharingland

borders) toexport foodtoAngola issignificant,andwillonlygrowasroadandrail

networksthroughinitiativesliketheLobitoCorridorcontinuetoprogress.Eliminating

tariffswill,intheory,reducethecostofimportinggoodsfromwithintheSADCandthus

reducethecostforconsumers.Greaterconsumerspendingpowerequatestobetterliving

conditionsandareductioninpoverty–keytargetsheldbybothSADCandtheGoA.

Protecting whom?

Itisimportanttoaddresstherolethatvestedinterestsandrent-seekingbehaviourplay

insettingAngola’stradeagendaandindeterminingitsattitudetowardsjoiningtheFTA.

Asmallcircleofbusinessmenfromanelitegroupoffamilies,mostwithdirectlinksto

therulingparty,haveformanyyearsmadealotofmoneyfromimportingconsumables

and other goods into Angola.82 This near-monopolisation of supply chains began

during theearlywaryears,when theMPLAwas still aMarxistpartywithaheavily

centralised system.Asdemandgrewand the socialistpoliciesworeoff,newprivate

businessopportunitieswereborn.Inacountryatwarthough,privateindustrieswere

dependentonpoliticaland/ormilitaryblessings.Thusitwasthathigh-rankingmilitary

officialsandrulingpartyofficials(whohadaccesstoimportchains)becamesomeof

Angola’sbiggestbusinessmen,83alsoknownasEmpresáriosdeConfiança(favouredor

trustedbusinessmen).Sincetheendofthewarin2002,legislation84discountingformer

soldiersfromcustomdutiesandothertaxeshaveonlyhelpedtocementthistrend,as

haveexemptionsgiventogovernmentministries,nationalreconstructionprojectsand

themilitary.85

GovernmentcriticssaytheseEmpresáriosdeConfiançaaretherealreasonwhyprices

aresohigh.Itisnotbecauseofthebadroadsorslowbureaucracy,butratherdownto

vestedinterestpricefixing.Onetradeanalystnotedthat:86

AngoladoesnotsomuchfearcheapimportsfromotherSADCcountries,itfearslosingthe

lucrativeimportarrangementsithasinplace.Certainpeoplearemakingsomuchmoney

fromlong-establisheddealsandback-handers,thereisnotsupportfortheFTAbecausethat

wouldopenupthemarket.Eventhoughitisthepoorestconsumerswhoarehitthehardest,

becauseofthehighprices,thegovernmentdoesnothing.Angola’spolicyregimeisheld

captivebyitsvestedinterests.

OpeninguptofreetradewithotherSADCmemberstateswouldprobablychangeimport

patternsthatcouldaffectthebusinessinterestsofthe EmpresáriosdeConfiança.This

couldinturnhavepoliticalconsequencesforPresidentdosSantos,whoarguablyoweshis

longandsolidpresidentialtermtostrategicallocationsofinfluenceandfinancialfavour.87

Thishighlypoliticisedbusinessenvironment isa turn-off topotential investorsand

traders,whocitecorruptionasamajorNTBtodoingbusinessinAngola.88Furthermore,

ChathamHouseidentifiescorruptionasa‘majorobstacletoAngolangovernmentpolicy


25


ofeconomicdiversification’thatinhibitsSMEgrowthandjobcreationanddrivesaway

potentialnon-oilinvestmenttootherAfricancountrieswith‘moreconducivebusiness

environments’.89

The new tariff regime, which will replace the 2007 rules, will shake up these

traditionalsupplychains.SomeEmpresáriosdeConfiançaaregoingtoloselucrative

incomeschemesunlesstheymoveintoproduction,whichmanyofthemalreadyhaveor

areintheprocessofdoing.Tariffexemptionsareexpectedtocontinueforgovernment

departmentsandex-military,forwhomdoingbusinesswillbecomeevenmorelucrative.

Theownerofafoodprocessingfactorywhoenjoysexemptionstatusmaycontinueto

bringincheapcementandotherpartsfromChinatobuildhisfactory,butthenalsohave

guaranteedmarketaccessbecausesuppliesofhisbananachipsarefacingtoughtariff

barriers,makingitmoreexpensivetoimport.JustastheEmpresárioshavebeenable

tomonopoliseimportsupplychains,sothereisariskthatnewprotectionisttariffswill

allowthemtomonopoliselocalproductiontoo.Thismodelmaymakeafewwealthyand

createsomejobs,but,basedontheexperienceoftheflourfactoryinNamibia,itisnot

guaranteedtobringhigherreturnstolocalfarmers.Theconsumerwillbehappytobuy

local,thoughlesssoifthequalityislowerandthecostishigher.Supply-sidechallenges,

whicharelikelyifimportsofcertainproductsstopaltogether,willalsopushupprices.

TheEmpresárioswillnotwanttopricethemselvesoutofthemarketbutwillknowthey

are‘protected’fromcompetition,andsowillhavesomeflexibilitytoincreasetheirmargins

withoutlosingsales.

W h A t A b o u t t h e t F t A ?

InOctober2008headsofstatefrom26AfricancountriesstretchingfromCapeTown

toCairometinKampala,Uganda,tolaunchtheTFTAamongtheCommonMarketfor

EasternandSouthernAfrica,theEastAfricanCommunityandSADC.TheTFTAisbased

onthreepillars:marketintegration,infrastructuredevelopment,andindustrialisationwith

agoaltodeepenintegrationacrossthebloc,whichcomprisesapopulationofnearly

600 millionpeopleandacombinedGDPofnearly$1 trillion.

Angolahas formally joinedthenegotiationprocess for theTFTA.Ithasattended

meetingsinvariousmemberstatesandhasevenhostedsomeSADC-focuseddiscussions

inLuanda.However,itisdifficulttoseeAngolajoiningtheTFTAwhileitcontinuesto

maintainthatthecountrylacksthe‘conditions’tobeapartoftheSADCFTA.Although

currentlytheSADCFTAhas15members,theTFTAenvisionsmorethan25.IfAngolais

holdingbackfromjoiningtheSADCFTAoverfearsofbeingfloodedbyalargeproductive

economy like South Africa, then what can it think of the TFTA, whose proposed

membershipwillincludedynamicactorslikeEgypt,Sudan,EthiopiaandKenya?Given

thatAngolahadsignedtheSADCPoTwithoutseeminglyplanningtoeverimplementit,

fewholdexpectationsthatitwilljointheTFTA,despiteappearingtotakeanactivepart

inthenegotiationprocess.

26



C o N C L u S I o N

AngolasaysitcannotentertheSADCFTAbecauseitdoesnothavethe‘conditions’in

whichtodoso,thatitsproductiveindustryisstillrecoveringfromdecadesofwar,and

thatopeningitsborderswouldinviteafloodofcheapimportsintothecountry.Although

thereissometruthinthisreasoning,thereisalsosomehypocrisy,asAngolahasalready

subjecteditselftobeing‘flooded’byrestofworld(RoW)cheapimports,particularlyfrom

China,BrazilandPortugal.

CuttingtariffsforimportsfromSADCwouldalsoallowAngolatoexportdutyfree

toSADC.Asdiscussed,Angolahas little toexport, thoughtherearegreenshoots in

itsagriculturalandmanufacturingsectors,withbrandssuchasRefriango(softdrinks)

findingnewmarketsintheregion.Angola’sprimaryconcernistoreduceitsreliance

onimports(whicharemostlyRoW)anddevelopitsownindustryinordertocreate

jobsanddiversifytheeconomyfromitsconcentrationoncrudeoil.Theprotectionist

policies,includingthetoughtariffregimes,speaktothis,butstudieshavequestioned

theeffectivenessofprotectionism.Itisquestionablewhethersuchpoliciesreallyprotect

theeconomy,ormerelyafewpoliticallyconnectedbusinessmen.Inthelongerterm,

thesepoliciesmaydomoredamagethangoodtolocalindustries,whichwilllackthe

competitivenessandefficiencyfoundinmoreliberalmarketplaces.

Inthelongterm,Angolahasambitionstoexpanditsexportmarkettobeyondthat

ofjustoil.ButbycuttingitselfofffromSADCwiththisprotectivestance,Angolarisks

damagingregionaltradetiesthatitwill,inthefuture,dependonforitsexports.Thehigh

costoflivinginAngolaiswelldocumentedandroutinelyblamedonthedependenceon

expensiveoverseasimports,yettheGoAisreluctanttoallowlower-costimportsfromits

SADCneighbourstobringthesecostsdown.Governmentofficialsandbusinessleaders

acrosstheSADCblocarefrustratedbyAngola’sbehaviour,yetnooneispreparedto

publiclychallengethestatusquo.Instead,thereisatacitacceptancethatAngolaisa

sovereignstate,whosepositionmustberespected.

ItishardtoknowwhetherAngola’seconomicdiversificationprogrammewouldhave

advancedmorequickly–orifitstradewithSADCwouldhaveincreasedsubstantiallyin

volume,givenitslimitedexportbasket–ifithadalreadyimplementedthePoT.What

isclearthough,isthatbystayingoutsidetheFTAAngolahaskeptitstradewiththe

regionataminimum,maintainingitsfocusfirmlyonlonger-distancepartnerslikeChina,

PortugalandBrazil,andhavingeverythingverymuchonitsownterms.

e N D N o t e S

1 TheRISDP(RegionalIndicativeStrategicDevelopmentPlan)wasfirstpublishedin2003,

settingouta15-yearroadmapfortheSADC.Itwasreviewedandupdatedin2011.

2 Inits2012 Audit of the Implementation of the SADC Protocol on Trade, SATHnotesthatalthough

intra-SADCtradevolumeshaveincreasedsubstantiallysincetheintroductionofthePoT,the

focusremainsonexports(usuallynon-value-added);intra-SADCtradeasapercentageofall

tradehasremainedstagnantataround15%.

3 Memberstateshadagreedthatalltariffphase-downsweretobecompletedbyJanuary2015,


27


withtheexceptionofMozambique,whichhadnegotiatedanextensionto2015forimports

fromSouthAfrica.

4 tralac(TradeLawCentreforSouthernAfrica),The Regional Indicative Strategic Development

Plan – SADC’s Trade-Led Integration Agenda: How is SADC Doing?,TradeBrief,April2012.

Stellenbosch:tralac,2012.

5 ImaraSecuritiesAngola,Angola: Private Sector Profile, September 2012.ProducedfortheAfDB

(AfricanDevelopmentBank).UnitedKingdom:ImaraSecuritiesAngola,2012.

6 WorldBankstatistic,http://www.worldbank.org/en/country/angola.

7 ImaraSecuritiesAngola,op. cit.

8 Forexample,badroads(poorquality,vulnerabletoextremeweather,congested)canslow

downthetransportationofgoods;customsofficialscandelaycross-bordermovement;border

postscanlackcapacityandfurtherhinderprocessingtimes.

9 UN Comtrade data sourced from http://www.trademap.org, accessed March 2013.

ThewebsiteisrunbyMarketAnalysisandResearch,ITC(InternationalTradeCentre),Geneva,

Switzerland,whichallowsfortheinteractiveaccessoftradedata.

10 ThesestatisticswerequotedinaspeechgivenbyPresidentdosSantosinLuandaon26March

2013.

11 PearceJ,‘IMF:Angola’s“missingmillions”’,BBC,18October2002.

12 An Outbreak of PeaceisthetitleofabookabouttheendofAngola’scivilwarwrittenbyBBC

Angolancorrespondent,JustinPearce.ThetitlecomesfromanexpressionPearceheardfrom

aWesterndiplomat.CapeTown:DavidPhilip,2005.

13 SADCSecretariat,‘Selectedindicators2011’,March2013,http://www.sadc.int/files/6213/6267/

6607/Selected_Indicators_2011_with_charts06March2013_FINAL.pdf.

14 IMF, Regional Economic Outlook: Sub-Saharan Africa, October 2012, http://www.imf.org/

external/pubs/ft/reo/2012/afr/eng/sreo1012.htm.

15 IMF,Angola: Staff Report for the 2012 Article IV Consultation and First Post Program Monitoring,

August2012,http://www.imf.org/external/pubs/ft/scr/2012/cr12215.pdf.

16 DeCarvalhoKV,ChianequeL&ADelgado,Inequality in Angola.Johannesburg:OSISA(Open

SocietyInitiativeforSouthernAfrica),2009.

17 Duringthewaryearsinterprovincialroadblockscurbedpeople’sfreetravelaroundthecountry.

Setuptolimitmovementinaconflictthatbecameattimesabattleoverterritory,thechecks

becamebribeopportunitiesforpoliceofficersandsoldiers.

18 ThesestatisticswerecitedbySonangol’sCEOatthecompany’sannualresultsconferencein

LuandainFebruary2013.

19 Angola’sonlyrefineryinLuandaprocessesaround40 000bopd,sothecountrymustimport

significantamountsofrefinedproductstomeetdomesticdemand.Asecondrefineryisplanned

forthecoastaltownofLobitobutconstructionhasbeenbesetwithdelays,withnocompletion

dateinsight.

20 FormerAngolaneconomyminister,ManuelNunesJunior,citedbyPortuguesenewsagency,

LUSA,23March2013followingaconferenceinLuanda.

21 Angolawashithardbythecollapseof theoilprice in2009,andforcedintoarranginga

standbyagreementloanwiththeIMFtosupportitsdwindlingliquidity.

22 WiigA&IKolstad,Does Diversification Improve Institutions in Resource Rich Countries?, Chr

MichelsenInstitute(CMI)andCentrodeEstudoseInvestigcao(CEIC)AngolaBrief,published

onlineforCMIandCEIC,December2012,http://www.cmi.no/publications/file/4670-does-

diversification-improve-institutions-in.pdf.

28



23 UNComtrademirrordatapresentedbytheInternationalTradeCentre,http://www.trademap.

org,accessedJuly2013.

24 Personalinterviewsthattheauthorhasconductedoverthepastfewyearswithbusinessesin

Namibia,SouthAfricaandBotswana,andregionaltradeconsultants.

25 AccordingtotheCNCbulletin,importsofcementproductsfellby4.98%fromQ3toQ4,while

importsofmaltbeerandmeatproductsrose20.66%and32.75%respectively.Thisisaclear

reflectionoftheChristmasperiod.Dataaccessedfromhttp://www.cnc-angola.cominMarch

2013.

26 AngolaplayedanactiveroleintryingtoleadregionalresponsetotherecentM23rebelcrisis

inDRC.InMarch2013PresidentdosSantoshostedaTripartiteSummitwithPresidentJacob

ZumaofSouthAfricaandPresidentJosephKabilaoftheDRCinthedaysafterthesigningof

thelatestpeaceaccord.

27 UNComtrade,datasourcedfromhttp://www.trademap.org,accessedMarch2013.

28 TheUSAIDsponsoredteamwereofferingtechnicalsupporttotheSADCSecretariat.Thefinal

reportaboutthismissionwaswrittenbyconsultantsfromTheServicesGroup,aUS-based

international consultancy firm. The report was sent to the author by TIFI at the SADC

Secretariat.

29 USAID(TheServicesGroup)onbehalfoftheSADCSecretariat,Angola and the Implementation

of the SADC Protocol on Trade.Botswana:SADC,2004.(ThisisbeforeSATHwasformed.)

30 Ibid.

31 Personalinterview,formerSADCemployee,Johannesburg,November2012.

32 A1992electionheldfollowingthesigningoftheLusakaPeaceAccordwasnotcompletedafter

UNITA’sleader,JonasSavimbi,contestedthepresidentialresultsaheadofarun-offvote.

33 Bythistimeinvestigationswerewellunderwayintotheso-calledAngolagatescandalaround

allegedarmssalestoAngola,involvingIsraelidiamondmagnate,ArcadiGadyamak;French

Algerianbusinessman,PierreFalcone;ChristopheMitterand,sonofformerpresidentFrancois

Mitterand;andformerFrenchinteriorminister,CharlesPasqua.Despiteguiltyverdictsin

2009,anumberofsentenceswerelaterreducedandsomeconvictionsoverturned.

34 SeevariousstudiesoftheAngola–Chinarelationship,including:AlvesA,The Oil Factor in

Sino–Angolan Relations at the Start of the 21st Century,OccasionalPaper,55.Johannesburg:

SouthAfricanInstituteofInternationalAffairs,2010;CorkinL,Uncovering African Agency:

Angola’s Management of China’s Credit Lines.Aldershot:Ashgate,2013.

35 China Daily, ‘Angola’ssocialdevelopmentdrivesuptradewithChina’,28March2012.

36 PresidentdosSantosrarelytravelstosummitsorevenonstatevisits,soitwassignificantthat

heattendedthisone.

37 Angola PressisAngola’sstate-ownednewswireservice.Itsreportsarepro-governmentbut

provideagoodsourceof informationandstatistics inacountrywhere littlegovernment

informationisavailable.

38 Angola Press,‘LançadaemJoanesburgoZonadeComércioLivre’,17August2008.

39 Ibid.

40 Angola Press,‘CondicionadaadesãodeAngolaàZonadeComércioLivre’,14August2008.

41 Angola Press,‘Angoladefendeconsolidaçãodezonadelivrecomércioantesdauniãoaduaneira’,

14August2010.

42 Ibid.

43 Angola Press, ‘SADC trabalha para membros aderirem ao protocolo de livre comércio’,

13August2011.


29


44 JoaoCaholo’sofficedeclinedSAIIA’sapproachforaninterview,referringustotheofficeofthe

ExecutiveSecretary,whichinturndirectedustotheTIFIDirectorate.

45 Personalinterviewsandemailexchanges,membersoftheSADC’sTIFIDirectorate,Gaborone,

September2012toMarch2013.

46 SADC,Recordofthe26thMeetingoftheSADCCommitteeofMinistersofTrade,30November

2013.Maputo,Mozambique,pp.7–9.

47 AECOM International Development on behalf of USAID/SATH, 2012 Audit on the

Implementation of the SADC Protocol on Trade.Botswana:USAID,2012.SATHisaGaborone-

basedofficefundedbyUSAID,andhasledseveralauditsoftheSADCPoTimplementation.

48 Ibid. ThisinformationwassourcedfromaratifiedrecordofthemeetingoftheSADCtrade

ministersinMaputo,Mozambique,November2012.

49 IntheabsenceoffunctioninformationdepartmentsatGoA,directrequestsforinformationand

interviewsweresenttoofficialsintheministriesofplanning,commerce,industryandforeign

affairs.LetterswerehandedinpersontoDraBeatriceMorais(Angola’sleadonSADCtrade)on

thesidelinesofanSADCmeetinginMaputo.Viaemailcorrespondence,herofficepromised

tofollowup,butdidnot.Letterswerealsohanded,inperson,totheinformationandtrade

attachésattheAngolanembassyinSouthAfricarequestinganinterviewwiththeambassador

there,butagaintherewasnoresponse.

50 Silveira,C,‘TaxadacervejapodeseramáximadaPautaAduaneira’,Expansao,13April2013,

http://expansao.sapo.ao/noticias/nacional/detalhe/taxa_da_cerveja_pode_ser_a_maxima_da_

pauta_aduaneira.

51 SeevariousreportsbytheWorldBank,IMFandAfDBurgingAngolatodiversifyitseconomy

away from oil. For example, AfDB, African Economic Outlook Report for Angola in 2012,

http://www.africaneconomicoutlook.org/en/countries/southern-africa/angola/,AfDB,2012.

52 Personalinterviews,Bevcanmanagement,Luanda,November2011.

53 AlmeidaH,‘Angolatospend$18bntoendpowercutsby2016’.Reuters,3September2010.

54 ThereareoveradozenflightsaweekbetweenLuandaandvariouscitiesinPortugaloperated

bynationalcarriersofbothPortugalandAngola–TAPandTAAGrespectively.

55 CommuniquefromJoséSeverino,PresidentoftheAssociaçãoIndustrialdeAngola(Angolan

Industrial Association), a well-respected and vocal business organization which sits on

governmentadvisorycommittees,March242013.

56 Telephonicinterview,CEOofLonrho,GeoffreyWhite,March2013.

57 TheLobitoCorridoristhestripacrossAngolalinkingtheAtlanticcoastlinetotheminesofthe

DRCandZambia.ThroughitsheartrunstheBritish-builtCaminhodeFerrodeBenguelaor

BenguelaRailroad,whichoncelinkedLobitowithMaputothroughanetworkoftracksacross

thecontinent.

58 Angola scorespoorlyon theWorldBank’sEaseofDoingBusiness,placedat172outof

185countries.Itisalsoranked80outof82bytheEconomistIntelligenceUnitBusiness

EnvironmentSurvey,whichplacesitat16outof17countriesregionally.

59 WeimerM, ‘Angola:Celebrating tenyearsofpeace’,April 2012,ChathamHouse,2012,

http://www.chathamhouse.org/events/view/182731,p.7;Transparency International2012

CorruptionsPerceptionsIndex,whereAngolaisranked157outof176countries/territories.

60 ThisisacoreaimofthePNDidentifiedbyMinisterofIndustry,KialaGabriel,duringhis

presentationinLuandaaboutAngolaandtheFTA.

61 MinisterofIndustry,KialaGabriel,madeapublicPPTpresentationinLuandaaboutAngola’s

positionregardingtheSADCFTA.

30



62 Ibid.

63 FewAngolangovernmentdepartmentshavewebsites,andthosethatdorarelyupdatethem.

SADCSecretariatstaffhavecomplainedaboutstrugglingtoaccessup-to-datedataduringtrade

visitsanddiscussions.

64 Personalinterview,tradeconsultant,Mozambique,November2012.

65 Telephoneinterview,privatesectorconsultant,Botswana/Dubai,March2013.

66 EmailcorrespondencewithTIFI,March2013.

67 Personalinterview,formerstaffmemberatSADCSecretariat,Johannesburg,November2012.

68 Telephoneandemailexchange,Namibiantradeexpertandbusinessman,JurgenHoffmann,

Johannesburg/Windhoek,February2013.

69 FlattersF,Implementing the SADC FTA: Where are We? What Next?,technicalreport.Gaberone:

AECOMInternationalDevelopmentforSouthernAfricanGlobalCompetitivenessHub,2010.

70 Ibid, p.6.

71 Ibid, p.7.

72 Thecoreofinfantindustryargumentisthatnascentorstart-upindustriesneedprotectionfrom

older,moreestablishedoftenforeigncompetitorsuntiltheycanachievepareconomiesofscale

andthuscompeteonalevelplayingfield.

73 SACUistheworld’soldestcustomsunion.ItsmembersareSouthAfrica,Botswana,Namibia,

LesothoandSwaziland.

74 Atthetime,theSADCmost-favourednationtariffonpastawas25%.

75 FlattersF,op. cit., pp.37–39.

76 TheServicesGroup,onbehalfofUSAID,Angola and the Implementation of the SADC Protocol

on Trade,PreparedbyTheServicesGroupfortheSADCSecretariatwithfundingfromUSAID.

Botswana:USAID,2004.

77 Ibid.

78 Estimatedataround50%accordingtothisreport(ibid.).

79 Ibid.,pp.v–vi.

80 AccordingtotheMaplecroftFoodSecurityRiskIndex2010,Angolaisrankedtheseventhleast

secureinfoodsuppliesintheworld.

81 RedversL, ‘Living in theworld’smostexpensivecity’,BBC,2February2012;MERCER,

‘Worldwidecostoflivingsurveycityrankings–Globaloverview’,June2012,http://www.

mercer.com/articles/cost-of-living-2012.

82 SeeVinesA et al.,Angola – Drivers of Change: An Overview.London:ChathamHouse,2005.

83 AguilarR, ‘Angola’sPrivateSector:RentsDistributionandOligarchy’,paperpresentedat

LusophoneAfricaConference:IntersectionsbetweentheSocialSciences,CornellUniversity,

2–3May2003.

84 Angolanlaw:Lei do Antigo Combatente de Guerra(Law of the war veteran),DiariodaRepublica,

Luanda,October2002,

85 SeeMarquesdeMoraisRandhisvariouspublicationsaboutallegedcorruptionandtrafficking

ofinfluenceamongthehighranksoftheMPLA.Mostreportsareavailableonhiswebsite,

MakaAngola,http://www.makaangola.org.

86 Personalinterview,tradeanalysis,Maputo,November2012.

87 Ibid.

88 Telephoneinterview,aNamibianexporter,Windhoek,January2013.

89 WeimerM,op. cit.,p.7.

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Documents

Angola, the Reluctant SADC Trader · The central issues guiding the paper are the arguments for and against Angola joining the FTA; the likelihood of Angola ever joining the FTA;