Friday, December 17, 2010

Angola, South Africa Cement Ties

Angola, SA cement ties

LOUISE REDVERS - Dec 13 2010 00:00

South Africa is hoping that next week's state visit by Angolan president José Eduardo Dos Santos will cement political and economic ties between the two countries which suffered under Thabo Mbeki's rule but have re-engaged under President Jacob Zuma.

Dos Santos, travelling with a delegation of ministers, is due on Monday and will meet Zuma during his three-day stay.

South Africa's trade and industry department and Business Unity South Africa have organised a business round table to discuss investment opportunities in Angola.

Representatives are expected from most sectors, including mining, oil and gas, finance, infrastructure and construction, agriculture and fisheries, transport and tourism, pharmaceuticals and ICT/telecommunication.

There is talk that Zuma, who has just returned from Cuba after forgiving R16-million in debt and opening a R210-million credit line for Raul Castro's government, could be seeking a similar financing model for Angola, perhaps in return for oil.

With its huge oil reserves, Angola, now sub-Saharan Africa's third largest economy, has significant investment potential. But despite the countries' physical proximity and the historic links between the ANC and Angola's MPLA, South African companies have struggled to do business in Angola.


Apartheid South Africa's support for the Angolan opposition movement, Unita, followed by pressure from Mbeki to negotiate rather than seek a military solution to Angola's civil war led to more than a decade of frosty relations.

Fears about corruption, high capital costs, language barriers and consular difficulties have also deterred potential investors, who have complained about a lack of support from the South African government. But by visiting Angola as ANC president in 2008, and choosing it for his first state visit as South Africa's president in 2009, Zuma is apparently seeking a rapprochement.

Nomfundo Xenia Ngwenya, of the South African Institute of International Affairs, believes Dos Santos's decision to visit South Africa shows Angola is ready to co-operate. "The Angolans are waiting for a big symbolic gesture from South Africa," she said. "This might come in the form of a credit line, which is being used in Cuba as a way to 'unlock' potential for future trade there."

But Lyal White, director of the Centre for Dynamic Markets at the Gordon Institute for Business Science, believes that South Africa may have missed the boat on key investment opportunities in Angola, particularly in the state-to-state models favoured by China and Brazil.

"South Africa and Angola are geographically very close but conceptually and culturally miles apart," he said, although he believed that closer political ties still made sense.

"Angola is an increasingly important player in Africa," he said. "It's important that South Africa engages with it, especially in terms of regional infrastructure and development.

"South Africa and Angola could work together to boost participation at the World Trade Organisation and the G20 to promote African interests globally," he added.

Alex Vines, the head of the Africa Programme at London-based think-tank Chatham House, said nothing much had happened since Zuma's visit "because, although relations are much better president to president, that hasn't filtered down to lower levels of government and society.

"However, Dos Santos's trip to South Africa will send out a strong message that the relationship is serious and things will change. South Africa is looking for investment opportunities and, given that Angola has an ongoing liquidity problem, it could work well for both countries."

Source: Mail & Guardian Online
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