Angola, SA shake on R1,75bn credit line

The long-awaited and much-hyped first state visit to South Africa since 1994 by the president of Angola has encouraged investment in South Africa’s oil-rich neighbour.

Highlights included a credit line of R1,75-billion, promises of new multiple-entry visas, and a commitment to regional development.

To celebrate the ANC’s historic links to Angola’s liberation movement, the MPLA, President José Eduardo dos Santos was presented with the Order of the Companions of OR Tambo, the highest honour awarded to a non-South African, for his personal support for the ANC during the struggle years.

President Jacob Zuma made much of the liberation bonds between the two countries, referring to his Angolan counterpart as a “comrade, friend and brother”.
Zuma said: “This historic visit will go down in the history books as the final cementing of relations between two nations who will be forever bound by a history of struggle, sacrifice and common dedication to freedom, justice and a better life for all in the respective countries and continent.”

This outpouring of friendship for Angola signals a clear détente between the two countries. Relations were strained under the presidency of Thabo Mbeki, who advocated dialogue as a way of resolving Angola’s civil war.

In a series of speeches and official conversations both presidents emphasised the need to improve trade ties between the two countries, while Dos Santos said his government was exploring the possibility of creating multiple-use entry visas for South African businessmen.

Both heads of state referred to the need for regional cooperation—through organisations such as the Southern African Development Community—and talked of the importance of promoting peace and stability through economic development.

A number of bilateral accords were signed, in areas such as public works and infrastructure development, energy implementation and telecommunications and information technology.

Declarations
Perhaps the most significant development was the signing of a “declaration of intent on the utilisation of financial facilities”.

This will allow for the opening of credit lines from South African institutions to fund development projects in Angola.

The Development Bank of South Africa (DBSA), the Industrial Development Corporation and the Export Credit Insurance Corporation have agreed to put up cash potentially running into billions of dollars.

The DBSA announced a “milestone agreement” to provide R1,75-billion in credit to Angolan bank Banco Africano de Investimentos in partnership with the African Development Bank.

Aguinaldo Jaime, head of Angola’s private investment agency ANIP, told the Mail & Guardian: “The two countries have recognised that you can boost investment only if you have financial mechanisms in place. This is what we have learned with Portugal, China and Brazil.”

SA’s commitment
Addressing South African and Angolan business leaders in Pretoria on the sidelines of the presidential visit, South Africa’s minister of trade and industry, Rob Davies, emphasised the government’s commitment to trade with Angola.

“Angola is without doubt one of the major new growth prospects in the SADC,” he said.

“I would go so far as to suggest that economic development in Angola in the years ahead is likely to become one of the major impetuses towards economic dynamism in the region.”

Davies praised the credit agreements, saying that the new financing models, with transport developments being launched through the Cunene Development Corridor initiative—between Angola, South Africa and Namibia—would strengthen the growing relationship between the two countries.

At the business forum opportunities were outlined for trade and investment in mining, agriculture and agri-business, construction and infrastructure development and telecommunications and technology.

Jerry Vilakazi, chief executive of Business Unity South Africa, said Dos Santos’s visit had been very positive for both countries and that while there was similar enthusiasm after Zuma’s visit to Angola in August 2009 there were “concrete developments” on this occasion.

“There has definitely been progress since the president’s visit.
Then, we were still trying to test out business opportunities and understand the Angolan environment,” he said.

“Some South African companies have had their fingers burned in Angola. But the difference now is that we feel able to put these issues on the table and discuss them openly.”

Difficulties in extracting foreign exchange from Angola and problems with accessing visas were among the gripes raised by South African businessmen at the forum.

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