Angola welcomes return of old colonial power

Financial Times: 

After rising by 35 per cent in 2008, Portuguese exports to Angola have continued to grow, strengthening the country’s position in second place behind China.

These inflows have been accompanied by growing numbers of Portuguese emigrants. With Portugal’s economy hard hit by the international finance crisis recession and unemployment rising, thousands of Portuguese have flocked to the oil and diamond-rich country.

This is all a far cry from 1975 when, on the eve of Angolan independence, an estimated 500,000 Portuguese fled the country, as if – in the words of the Polish writer Ryszard Kapuscinski – “from an infectious disease”. Broadly, the newly independent Angolans, too, did not lament the departure of the Portuguese, who were notorious as among the more repressive and mean-spirited colonists.

But now, in the wake of the end of the civil war eight years ago, diplomats estimate at least 100,000 Portuguese are in Angola, twice as many as three years ago, although some immigrants did leave last year.

Antonio Prata, head of international relations at Angola National Investment Agency, claims that in the past year Portugal’s presence in Angola “has acquired a completely different dimension” although he concedes it is a “love-hate” relationship.

Portuguese investments account for about 20 per cent of all foreign inflows monitored by the agency, he says. “Many of these businesses have very little chance of surviving in Europe so they internationalise and Angola is the obvious place.”

“The Portuguese relationship has been consolidated,” adds one European diplomat, noting recent initiatives to bring Angolan and Portuguese commercial law into line.

In 1975, as the colonists’ dreams disintegrated and a bitter civil war between rival liberation movements gathered pace, a new wooden city of crates emerged as the Portuguese packed up their belongings, wrote Mr Kapuscinski.

Today, on the very same streets, the burgeoning Portuguese commercial presence is immediately visible, with construction companies such as Teixeira Duarte and Soares da Costa, competing with Chinese and Brazilian builders.

Billboard advertisements for Blue, a popular cola-style soft drink launched five years ago by Refrianga, a Portuguese company, are more prominent than those for established brands.

The Portuguese businesses face some formidable obstacles: Angola has one of the least friendly business environments in the world according to the International Finance Corporation’s annual Doing Business survey.

Ricardo Bordalo, the Luanda representative of Agencia Lusa, the Portuguese press agency, fears that some smaller businesses could simply run out of money. In addition, foreign investors are encouraged to take local equity partners and as Mr Pires de Lima puts it, the process of “conciliating a lot of interests” can be a “major headache”.

Finally, although culture and language may give Portuguese businesses an edge over some of its foreign competitors, they face a tough challenge from an equally well-equipped and commercially more powerful rival: Brazil, not to mention China, which regards Angola as one of its most important African partners.

Portuguese consumer goods brands may be popular in Angola but so too, increasingly, are Brazil’s, and nowhere more so than in the low-income urban areas where purchasing power has helped fuel recent growth.

Roque Santerro, the vast sprawling market that occupies several square kilometres above Luanda’s port, is named – like two other Luanda markets – after a character in one of the Brazilian soap operas that are very popular among the poor. At his clothes stall there, “One Love”, a 38-year-old market trader, says his favourite country – and best source of “quality merchandise” – is Brazil.

But Mr Pires de Lima stresses the importance of the Portuguese return cannot be over-stated. “We are really keen,” he says. “Angola can be an important part of our story.”

Posted via email from Jim Nichols