Written by Ricardo Soares de Oliveira | From The Africa Report

Even in the times of ‘Africa rising,’ few of the continent’s states have exuded the self-confidence of Angola.

Some economists may find the authoritarian, state-led development strategies of Ethiopia or Rwanda more admirable, but it is Angola that has posted a tenfold increase in its gross domestic product since the end of the civil war in 2002, making it sub-Saharan Africa’s third-largest economy and about three times the size of Kenya’s in 2013.

Armed with oil money and the 2002 victory against the União Nacional para a Independência Total de Angola rebels, whose leader Jonas Savimbi had enjoyed support from the US and apartheid South Africa, the Movimento Popular de Libertação de Angola (MPLA) regime has rebuilt war-torn Angola with minimal input from Western governments and NGOs.

Luanda’s skyline changed beyond recognition as the elite sought to create an African Dubai that fit its ambitions.

In a remarkable post-colonial reversal of fortune, Some of Angola’s oligarchs have become Portugal’s largest foreign investors.

But although Angolan decision-makers bluster about their country’s emerging-power status, in reality it is rather brittle.

Some of the accomplishments are real. Although at a staggering cost, Angola’s infrastructure has been partly rebuilt.

Technocrats were empowered to stabilise the economy, build up the country’s hard-currency reserves and make Angola more presentable for some forms of foreign direct investment.

The MPLA’s style of governance after the war, while politically intolerant, has at least placed large-scale violence out of the picture.

These are impressive achievements. However, four major challenges prevent Angola from advancing much further and may even imperil the progress of the past few years.

First, Angola remains one of the world’s most oil-dependent economies: oil accounts for 97% of export revenue. This makes Angola extremely vulnerable to the vagaries of the oil price.

The MPLA regime has made impressive promises to diversify the economy, but its record does not stand much scrutiny.

Agricultural investment consumes an estimated 1% of the country’s budget, much of it on big agribusiness projects, but it has failed to produce many jobs or crops.

Industrialisation has been slow and chaotic. Factories lacking electrical supply have been built and operated by foreigners through turn- key contracts. Their meagre and expensive output is uncompetitive in local, let alone foreign, markets.

Beyond the rhetoric, the Angolan oligarchs around the presidency, the party and the military show very little interest in investing in productive sectors. They prefer to put their money in foreign real estate and investment portfolios, not local industry and agriculture.

Read more at The Africa Report