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Rediscovering Angola

August 18, 2009

Language and historical ties have helped Portugeuse investors gain a profitable foothold in oil-rich Angola. Now, with unemployment rising in Portugal and across Europe, entrepreneurs are heading south in large numbers.

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A graphic depicting the portuguese and Angolan flags
History and language make Angola a top destination for Portuguese investorsImage: AP Graphics/DW Fotomontage

Angola has seen some of the fastest economic growth of any country in recent years, thanks to oil output rivaling Nigeria's. While its economy has since cooled, it is still seen by Portugal, the former colonial power, as a huge opportunity, thanks to an ambitious development program that is sucking in capital and skilled labor.

According to figures from the Portuguese-Angolan Chamber of Commerce, Portugal's exports to Angola – from beer to construction materials – leapt by one third last year to 2.2 billion euros, making it Portugal's fourth largest trading partner. Portuguese direct investment has tripled to 634 million euros, mostly in public works and construction.

Palm trees along the waterfront, Luanda, Angola.
Many Portuguese are moving to Angola to escape the clouds of recessionImage: picture-alliance / Jorn Stjerneklar / Impact Photos

In March, Portuguese Prime Minister Jose Socrates welcomed Angola's president, Jose Eduardo dos Santos, for his first ever official visit. They signed accords aimed at boosting trade and investment still further.

At the ceremony, dos Santos hailed what he called a “solid friendship” and agreements that he said were “a great sign of confidence” in his administration. After years in which Portugal kept its distance from an Angolan regime labeled undemocratic by its critics, money really does appear to be talking loudest.

More than money

Aerial view of oil rigs off the Angolan coast
Large oil and gas reserves are funding the government's development pushImage: AP

But for Angola to develop its economy, and lift out of poverty the majority, who live on less than two dollars a day, it needs more than money.

“The lack is obviously skilled human capital,” said Jose Caetano of Lisbon-based recruiting agency Talent Search, who now spends most of his time in Angola. “Our mission is to hire and develop talent, with some expatriates, and programs to develop local human capital.”

With unemployment rising in both Portugal and the European countries to which the Portuguese traditionally emigrate, it is not just executives who are heading south. Most of the visa applicants queuing outside the Angolan consulate in Lisbon each week in their hundreds are entrepreneurs and tradesmen; according to officials. With skills lacking in Angola, plumbers, for example, can earn several times than they would at home.

Former colonizers return

There are now well over 100,000 Portuguese in Angola, though accurate estimates are hard to come by given that many Portuguese were born or lived in Angola before independence in 1975 and have dual nationality. As former colonizers, however, they are not always welcome.

"When I arrived in Luanda I felt a certain aggression, and the fact that I was Portuguese didn't make me feel very welcome,” said Joao, one of many Lisbon advertising men who have had a spell in Angola. “I felt like I had dollar signs on my forehead, with everyone trying to get something out of me.”

Rubbish lies on the ground near a marketplace in a poor area of Luanda
Not all Portuguese expatriates feel welcome in LuandaImage: picture-alliance/ZB

Like many Portuguese unable obtain a work visa, he travelled to Angola as a tourist to stay for three months before returning to Portugal to pick up another three-month tourist visa. In the end, he didn't do a second stint, not least because the conditions – living and working in the same house for example – were unsustainable in the long run.

Warning signs in an oil-dependent economy

Joao also noted warning signs in the economy, explaining that a number of construction companies involved in public works projects now face bankruptcy because they have not been paid for up to 12 months.

The Angolan government has admitted that the drop in the oil price from last year's peak of $147 a barrel to $30 in early 2009 knocked its budget out of kilter, and has promised to settle debts by the end of the year. It has forecast the economy will pick up soon, and insists that no major public projects will be cancelled.

Africa's El Dorado retains its pulling power

For the most part, Portuguese enthusiasm for this African ‘El Dorado' remains undimmed.

“The biggest opportunity for the next decade will be Angola and other emergent countries,” said Jose Caetano of Talent Search. “Angola will be a huge opportunity for professionals either beginning a career, or who at the end of their career can spend three to five years teaching, delivering skills to locals.”

Jose Caetano, Talent Search human resources
Caetano spends most of his time in Angola nowadaysImage: Talent Search

With the number of migrants heading south expected to remain steady, Portugal's state agency for foreign investment has set up an office in Luanda, offering detailed help for entrepreneurs setting up locally.

Angola is also being courted by the US – Secretary of State Hillary Clinton made a stopover on her recent African tour – and by China. But for Portugal, a small economy buffeted by global turmoil, Angola remains a beacon for companies and individuals alike.

Report: Alison Roberts
Editor: Sam Edmonds