VZCZCXRO8127
PP RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLU #0823/01 2911234
ZNR UUUUU ZZH
P 171234Z OCT 08
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC PRIORITY 5101
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 03 LUANDA 000823 
 
SIPDIS 
 
STATE FOR USITC, AF/S AND AF/EPS 
 
E.O. 12958:  N/A 
TAGS: ETRD OTRA AO
SUBJECT: USITC STUDY ON SUB-SAHARAN AFRICA: ANGOLA OVERVIEW 
 
REF: STATE 85109 
 
SUMMARY 
------- 
 
¶1. (U) Embassy Luanda is pleased to provide the following overview 
of Angola's infrastructure conditions and export competitiveness for 
the USITC.  In the six years since Angola emerged from civil war, 
the government has embarked on huge public investment projects to 
revitalize the country.  Investments to rehabilitate roads, ports, 
the agricultural sector and the electric grid are starting to 
develop a friendlier investment climate. END SUMMARY. 
 
Overview of Land Transport 
-------------------------- 
 
¶2. (U) At the time of independence in 1975, Angola had a total of 
76,676 kilometers of road network: 7,777 kilometers of paved road, 
28,018 kilometers of gravel roads and 36,528 kilometers of earth 
roads.  During Angola's decades of civil war, roads and bridges were 
destroyed, leaving communities isolated for many years. Railway 
infrastructure and rolling stock were devastated. Airport runways 
and other airport infrastructure were destroyed as well.  Much of 
the road network has received little or no maintenance since war's 
end in 2002.  According to the Ministry of Public Works, by the end 
of 2008, 4,500 kilometers of regular roads will be rehabilitated. 
Landmines continue to be a concern in Angola.  The government, with 
assistance from international donors, is actively clearing 
landmines, but much work yet remains. 
 
¶3. (U) Since war's end in 2002, the government has been rebuilding 
transportation networks.  Construction companies from China, 
Portugal, and Brazil are busy throughout the country.  The quality 
of the new work was questionable, especially at first, but improved 
inspection regimes are knitting the country back together again. 
Similarly, the major east-west railroads are under reconstruction, 
with completion dates from late 2008 through late 2011. 
 
Port services 
------------- 
 
¶4. (U) Angola has four main ports: Luanda, Lobito, Namibe and 
Cabinda. The port of Cabinda serves the northernmost province. Plans 
drawn up to construct roll-on/roll-off container terminals at Luanda 
and Lobito have not been implemented. There are two terminals at the 
Luanda port: Unicargas (for both container and general cargo; and 
Multi-terminals, for general cargo. 
 
¶5. (U) The port of Luanda is a natural harbor where the seaward 
shelter provided by Luanda Island and the bay secure anchorage for 
vessels of nearly any size. The maximum draught at the access 
channel is 9.5 meters and at the quays 9.5-10.0 meters, with the 
exception of the local traffic terminal at Cabotang, where it is 
3.5-5.5 meters. One constraint on port operations is port access. 
The Port of Luanda is in the center of the city, which seriously 
constrains its growth in the medium and long term. New sites are 
being developed north of the present site. Construction of a new 
container terminal in Cacuaco, about 20 km from Luanda, and 
development of a dry port in Viana, 30 km from Luanda, are planned. 
 At least US$70 million will be invested in the dry port project by 
the Multi-Parks Company.  In 2007, the port of Luanda handled 
444,867 containers, corresponding to 3,032 million tons of cargo, 
compared to 3.19 million tons in 2004, and 2.01 million tons in the 
first six months of 2005. The Port Authority projects port traffic 
to reach 7.4 million tons in 2010 and 12 million tons by 2020. 
 
¶6. (U) The port of Lobito is also important and likely to become 
more so when the railroad to Huambo is completed. Lobito's waiting 
time of two or three days compares favorably with Luanda's, which 
varies between  weeks and -- in extreme cases -- several months. 
Port of Lobito Deputy Director Pedro Joaquim partly attributes 
Lobito's faster times to a difference in port organization. 
Luanda's piers are proprietary, while the Port of Lobito handles all 
ships on a space-available basis, according to Joaquim. 
 
¶7. (U) The commercial port of Namibe was built in 1961 and is 
considered Angola's best natural port, with a harbor up to 12 meters 
deep and a large bay with ample room to expand port activities.  It 
is also the most run-down of Angola's ports.  Many of the port's 
cranes are out of repair. The functional cranes date back to the 
1970s.  The port authority plans to lengthen the commercial port by 
500 meters and to rehabilitate the iron-oreloading terminal to 
accommodate ore from the planned reconstruction of the iron mines in 
Huila province. 
 
¶8. (U) In 2005, the port of Cabinda launched a four-year plan to 
modernize existing infrastructure and develop new capacity, with the 
aim of boosting its regional importance.  In 2007, as part of the 
central government's Public Investment Program for Cabinda, the port 
was granted $100 million to finance expansion costs. The 
enhancements, which are expected to be completed this year, will 
 
LUANDA 00000823  002 OF 003 
 
 
allow the port to receive ships of greater capacity and also handle 
cargo for neighboring countries.  After the expansion, Cabinda's 
port will have a nine-meter-deep maneuvering basin for ships with a 
loading capacity of over 1000 tons, and its access channel will be 
80 meters wide, allowing for the simultaneous passage of two ships. 
With the improvements in place, officials estimate that the port 
will register annual growth of 50-70% from 2008 to 2010.  In 2002, 
the port of Cabinda received roughly 2,000 containers.  In contrast, 
the port received roughly 12,000 containers in 2007. 
 
Electricity distribution 
------------------------ 
¶9. (U) Empresa De Distribuicao De Electricidade (EDEL) is 
responsible for supplying electricity to Luanda, while the Empresa 
Nacional de Electricidade (ENE) is responsible for 15 provinces in 
the rest of the country. Both operate under the Ministry of Energy 
and Water (MINEA) and are subject to government price controls. The 
current price regime does not cover operating costs, and, faced with 
difficulties in collecting revenue, ENE and EDEL require subsidies 
to stay in operation. 
 
¶10. (U) Electricity distribution is moving slowly toward technical 
adequacy in Luanda, but managerial problems remain.  A new dam built 
with Brazilian assistance produces sufficient power for the city's 
needs, but the transmission lines are still not reliable.  Prices 
will have to be raised to fund operations, but a tradition of free 
electricity presents problems for implementing new rate structures 
to pay for improvements.  Hydroelectric power served many cities 
before the civil war, but the dams and their generators must be 
repaired if power is to be restored.  Consequently, hydroelectric 
power restoration is moving forward slowly. 
 
¶11. (U) MINEA has four dam projects underway and plans to increase 
transmission capacity and create a national electrical grid serving 
15 cities.  Over the next seven years, MINEA plans to add 6,000 MW 
in generating capacity nationwide. 
 
The Agricultural Sector 
----------------------- 
 
¶12. (U) Agriculture, including livestock and forestry, accounts for 
about 8 percent of Angola's GDP.  The main crops are bananas, 
plantains, sugar cane, coffee, sisal, maize, cotton, cassava, 
tapioca, tobacco, and vegetables; livestock and forest products 
could also become significant.  Of the country's area of 124 million 
hectares, 54 million are potential pasture land and 35 million are 
arable.  Of the three main agricultural and ecological zones, one is 
dependent on seasonal rains, the second is a transitional zone 
suitable for growing drought-resistant crops, and the third is an 
arid zone that would require substantial irrigation for agriculture. 
 Areas of rain forest are substantial. 
 
¶13. (U) Before independence, Angola was a major agricultural 
producer, self-sufficient in food, and a substantial exporter of 
many crops.  At present, the country has no formal agricultural 
exports, and even informal cross-border trade with interior 
countries is limited, given the sparse populations along the eastern 
borders and the distance between these borders and major production 
areas.  The damage caused by the civil war forced the country to 
become a major net importer of food and agricultural products. 
Coffee production was the most severely affected, dropping to near 
zero.  Before its civil war, Angola was the world's fourth largest 
exporter of coffee.  Exports plummeted in 1974, right before 
independence, and have not recovered.  Both Arabica and Robusta 
coffee bushes remain in place in a number of provinces and continue 
to be harvested.  One association of growers claims it could readily 
produce 2,000 metric tons per year of organic coffee.  Staple grains 
were adversely affected during the war.  Roots and tubers were less 
affected and production has increased dramatically in recent years, 
especially cassava. 
 
¶14. (U) Angola produces citrus fruit, but not for export.   It does 
not produce shea butter in significant quantities, nor does it 
export pineapples.  Angola does not use or export hides in 
commercial quantities.  It has no leatherworking industry, does not 
raise rubber trees and does not have a rubber industry. 
 
Textiles and Apparel 
-------------------- 
 
¶15. (U) Angola has no textile or apparel industry.  The last textile 
plant in Angola closed in 1998.  One company twice attempted making 
clothing in Angola, but abandoned the effort because of costs and 
difficulty in training staff.  That company moved its operations to 
India. 
 
Tourism Services 
---------------- 
 
¶16. (U) Angola does not have a tourism industry.  Angola's 
immigration law does not recognize tourism and requires a letter of 
 
LUANDA 00000823  003 OF 003 
 
 
invitation from a domestic sponsor for all visitors.  Hotel space is 
extremely tight, especially in the capital.  To have a reasonable 
chance of reserving a room, business visitors need to make 
arrangements three months in advance.  Construction of new hotels is 
currently underway in Luanda and other cities in the country. 
Angola does have tourism potential, particularly in eco-tourism.  It 
possesses a long and diverse coastline and various ecosystems. 
Wildlife in the South of the country is slowly migrating north from 
Namibia after fleeing during the civil war. 
HAWKINS