Xi Jinping, the president of China, said he would support Chinese companies that make investments in Angola’s agriculture and manufacturing sectors as the oil-producing nation seeks assistance in diversifying its economy, according to state media reports on Friday ( Mar 15 ).
At the Great Hall of the People in Beijing, Xi addressed Xi to the Angolan President Joao Lourenco, who stated that the Chinese side was ready to work with Angola to carry out important infrastructure projects and help powerful Chinese firms to visit the country to pursue different forms of cooperation.
Following Angola’s announcement to keep the Organization of Petroleum Exporting Countries and its cooperation agreements with China in December, Lourenco’s visit comes as a result of its announcement in December.
Xi told Lourenco on Friday Chinese firms had “help Angola reach agrarian modernisation, industrialisation and financial diversification”, the state media report said, part of Beijing’s extended- term drive to enhance economic and political ties with Africa.
Because Luanda owes Chinese lenders only under US$ 21 billion, according to World Bank data, China has a vested interest in Angola’s effort to reform its business.
Luanda does not have enough non-oil revenue sources to finance its transition, so Lourenco, who is accompanied by his agriculture minister on this visit, needs funds to implement structural reforms to reduce its reliance on oil.
In December, China and Angola signed an investment protection agreement, while Angolan firms from Dec 25 have had tariff- free access to China’s massive consumer market across 98 per cent of goods under a separate agreement.
The two leaders also agreed on Friday to improve bilateral ties to the level of a comprehensive strategic cooperative partnership, facilitating more trade and investment.
According to data from the American Enterprise Institute think tank, Chinese companies have invested close to US$ 12 billion in Angola since it joined China’s Belt and Road Initiative in 2014. Just under half of that amount has been devoted to the nation’s energy sector.
The littoral state has plentiful reserves of base metals and ample agricultural resources, such as sugarcane, coffee, cotton and livestock, but they have been neglected compared to oil.
According to the International Monetary Fund’s Executive Board’s assessment of Angola’s economy, “heavy dependence on the oil sector” puts Luanda at a high risk of missing the Fund’s forecast for 2023, where the country’s oil sector is projected to have shrunk by an annual 6.1 percent over the previous year.