Angola

Poverty

In terms of gross domestic product, Angola’s economy ranks among the top ten in Africa, and it is among the fastest growing. At the same time, however, more than 40 percent of Angolans live below the poverty line. This discrepancy is due in large part to the country’s economic structure.

The most important goods produced in Angola are oil and diamonds, which account for roughly 99 percent of exports. The economy is greatly affected by international prices for raw materials. Between 2005 and 2008, GDP grew by an annual rate of approximately 20 percent. In 2009, however, growth came to a standstill as a result of the drop in oil prices. Growth is expected to increase by nine percent in 2010. It should also be noted that oil production and diamond mining are in the hands of a small number of companies. Other economic areas are only gradually being explored. Angola is trying to free itself from its dependence on international markets and include a larger share of the population in the value chain.

Prior to the civil war that began with independence in 1975, Angola exported agricultural products and fish. Today only three percent of the country’s arable land is being cultivated. According to the German embassy in Luanda, however, the government is devoting few resources to reorganizing Angola's economic structure; most investments are going to infrastructure projects.

The majority of Angolans therefore live from subsistence farming. The standard of living is correspondingly low: Life expectancy is barely 38 years, the rate of infant mortality is among the highest in the world, and only about 50 percent of Angolans have access to clean water and sanitary facilities.

The government's anti-poverty strategy, adopted in 2009, contains several measures for promoting local business, and these have already been implemented. Conditions for providing microloans have been improved, an incubator for new companies has been put in place, and a number of company services, such as training programs, have been introduced.

Numerous opportunities are available for corporate engagement: Companies can provide jobs for local workers at appropriate wages. Adhering to social standards should be a given for international companies. In addition, long-term anti-poverty efforts can include assisting local communities in implementing health-related and educational projects, building decentralized infrastructure for the electricity and water supply, or promoting local enterprises or subcontractors.

Education

Education is an enormous challenge in Angola. Schooling consists of six years of primary school and six years of secondary school. The quality of public education is often poor, and the educational level of the general populace is low; only 67.4 percent of Angolans can read and write.

Angola has invested considerable resources in education since the end of the civil war. Approximately 18,000 classrooms have been built, and over 70,000 primary school teachers have been hired. Most of these new teachers, however, have no pedagogical training. Overall, more than 75 percent of teachers have never received relevant training. UNICEF estimates that over two million children have attended primary school since 2002, but only 54 percent of them have actually graduated. A mere six percent of children attend secondary school. Consequently, Angola suffers from a lack of qualified workers.

In the area of higher education, the public Agostinho Neto University is gradually being broken down into independent regional universities. There are also a number of private universities.

Major challenges exist in the sphere of vocational training as well. Because of a scarcity of training opportunities, every company has the problem of a lack of qualified local workers. And the few Angolan workers with a higher level of skills end up taking high-paying jobs in the oil industry.

The Angola government has made vocational training one of its top priorities, recognizing that an adequately trained workforce is essential for attracting international companies to Angola. The investment agency ANIP is therefore subsidizing the establishment of in-company training programs. In order to prevent the oil industry from luring these workers away, however, companies will have to offer employment conditions comparable to those of the oil companies (wages, housing and educational benefits, company cars, etc.).

Vocational training is a focus of German development cooperation as well. A bilateral agreement has been reached to facilitate efforts in this area, to be implemented by GTZ. German companies might partner with organizations and agencies active in the sphere of development cooperation.

Health

The overall health situation in Angola is appalling: Life expectancy is 38.2 years; the rate of child mortality is among the highest in the world, with 276 deaths among boys and 243 among girls per 1,000 children under the age of five. Malaria is the main cause of death among children, and accounts for roughly 25 percent of the high rate of maternal mortality.

Particularly in the poverty-stricken areas on the fringes of the large cities, where at least 50 percent of Angolans live, living conditions and the supply of goods and services are extremely precarious. Estimates indicate that only 50 percent of Angolans have access to basic healthcare. The result is that thousands of people die each year from easily treatable ailments such as diarrhea and infections. Malaria, meningitis, tuberculosis and worm-related diseases are also widespread. In contrast to other diseases, the rate of HIV infection is lower than the regional average at 2.1%. This is because Angola was largely isolated from other countries during its civil war, so HIV/AIDs was not able to spread as rapidly as it did elsewhere.

In 2007, the government launched an ambitious two-year plan to improve the health system, allocating 443 million euros for that purpose. The money was used primarily for training personnel and purchasing new medical equipment. In practice, however, these efforts have not been as successful as hoped. In one case, for example, Chinese construction firms built regional and district hospitals, but there were no health workers to staff them.

Corporate efforts focus primarily on improving healthcare for employees and their families as well as the local communities. As in all of sub-Saharan Africa, this includes programs to prevent and treat HIV/AIDS (education, access to voluntary HIV testing and counselling services as well as effective medication). Other GTZ workplace policy programs that have already been implemented in countries like South Africa might serve as models in this context. Measures to prevent malaria and other tropical diseases and in-company medical services would be helpful as well.

Environment

People in Angola have gradually become more conscious of environmental issues since the end of the civil war. Angola issued its first environmental report in 2006. However, institutional weaknesses make it very difficult to monitor compliance with environmental rules and regulations.

The main challenges facing Angola in the field of environmental protection are the following:

• Water shortages: Only roughly 50 percent of Angolans have access to clean drinking water. A lack of sewage systems has led to polluted rivers; deforestation of large areas during the civil war has caused a decline in groundwater levels.

• Deforestation: Forests still cover 35 percent of Angola’s territory, but massive clearing of the forests in the coastal regions has exacerbated the problem of desertification. An alternative energy supply is needed to protect the forests, since some 80 percent of the country’s people currently use wood for cooking purposes. Moreover, tropical timber is felled to be sold and exported illegally.

• Endangered biodiversity: Angola is home to such large wildlife as the elephant, hippopotamus, rhinoceros, gnu and cheetah. Not only the expansion of farmland, but also the destruction that took place during the civil wars and the ivory trade have threatened the survival of numerous species.

• Overuse of soil: Massive overuse of grazing land has led to excession exploitation of the soil and caused erosion. In many cases grazing land and cultivated areas cannot be expanded because large parts of the country are still covered with land mines. 

• Mines: It is estimated that between nine and 20 million land mines are still buried in Angola’s soil. Every 20 minutes someone in Angola is killed by a mine.

However, there is also cause for hope: The national parks, which suffered from neglect during the civil war, are being rehabilitated; one of the most impressive examples is Kissama National Park. It is home to antelope, gnus, water buffalo, zebras, giraffes, ostriches and sea turtles. Its elephants have been on an unusual journey: They were flown in from South Africa and Botswana to make up for the losses caused by poaching. This good-neighborly assistance was provided under the appropriate name of Noah’s Ark.

Other

Corruption

Corruption is widespread in Angola, and official efforts to combat it have been inadequate. According to Transparency International’s Corruption Perceptions Index, Angola’s relative standing has declined by four places since the previous year; it is among the 10 percent of countries with the worst records for corruption. 

In the area of corruption, German companies should maintain a zero-tolerance policy. German companies have a good reputation because they refuse to accept or provide any “favors” beyond the usual business dinners.