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Slow progress

Antonio Cascais / imJune 12, 2013

Two years ago, German Chancellor Angela Merkel and Angola’s President Eduardo dos Santos agreed on a 'strategic partnership.' But progress has been slow and Germany is still only a minor player in Angola.

Participants attend a session at the German-Angolan Business Forum
Image: DW/A. Cascais

The German business sector realised some time ago how attractive the west African state of Angola is.

With the signing of a 'strategic partnership' during a state visit in 2011, Chancellor Angela Merkel hoped that German companies would find it easier to gain access to the former Portuguese colony. Other countries such as China and Brazil were already active in Angola.

The country has large mineral deposits, especially diamonds and oil. In recent years, it experienced strong economic growth. In 2012 alone, the country's Gross Domestic Product grew by 8 percent.

A general view of the port of Luanda Photo: AFP
Angola's capital Luanda is undergoing massive reconstruction after 27 years of civil warImage: AFP/Getty Images

That figure comes from the Bonn-based German Trade & Invest Agency (GTAI). It makes the authoritarian-ruled Angola one of the fastest growing economies in the world.

But the German-Angolan alliance is not developing as quickly as it could two years after its inception. This was the general impression conveyed at the "German-Angolan Economic Forum," held from 4 to 7 June, 2013 in Angola.

The meeting was organized for the fifth time by the German-African Business Association (Afrika-Verein der Deutschen Wirtschaft), together with the Delegation of German Business and Commerce. The meeting acts as a platform for the promotion of German-Angolan trade and investment relations.

Fifty German representatives and around 200 from Angola discussed current projects and investment opportunities in the fields of construction, infrastructure, agriculture and energy supply.

Hurdles for investors

The case of Angola shows how sub-Saharan Africa still plays only a minor role for the German economy. "In the Sahel region, Angola now ranks third in importance to the German economy, after South Africa and Nigeria," says Andreas Wenzel from the Southern Africa Initiative for German Business (SAFRI).

The volume of bilateral trade between Germany and Angola has increased tenfold in the last six years. But in absolute terms, joint trade is still at a very low level, 800 million euros ($1billion) annually..

By comparison, the trade volume between Germany and Algeria last year was twice as high. One reason is the obstacles imposed by the Angolan government on foreign investors.

Andreas Wenzel from the Southern Africa Initiative for German Business. Photo: Antonio Cascais
Andreas Wenzel is an expert on German business in sub-Saharan AfricaImage: António Cascais

Under recently adopted legislation, foreign companies may invest no less than 750,000 euros. This figure represents an insurmountable obstacle for many small and medium sized businesses.

"We approve investments of up to 10 million Euros in a pretty unbureacratic way," Jose Chinjamba, chief of the Angolan National Private Investment Agency (ANIP), told DW.

Chinjamba did not comment on criticism of the starting figure by smaller German companies, adding only that investments exceeding 10 million euros require additional approval from the Angolan Economics Ministry.

"We're not big enough for such amounts," says Günther-Peter Storbeck, one of the 50 German partipants at the forum.

His firm,G.F.H in Hamburg, sells German machinery to South Africa, Zimbabwe and Botswana. Now he wants to expand into Angola. But he says there are problems.

"If you have to wait forever to get a visa, you lose all your enthusiasm. You have appointments but you can't enter the country." But Storbeck also has some words of praise. "The people are nice, friendly and very open to Europeans. I can walk around the capital at night without any problem."

Desire for transparency

"We have seen a very dynamic country. A country that wants to move forward. That can be seen everywhere. It's a country which, by African standards, has an impressive infrastructure, "sums up Christoph Kannengiesser from the German- African Business Association.

He was in Angola for the first time to attend the forum. “It's a country with problems, but also a country that has plenty to offer entrepreneurs," is his verdict.

Most of the Germans at the forum are interested not only in doing quick business deals, but also want to engage in long term, sustainable investment in Angola.That means maintaining voluntary environmental and social standards, commitment to human rights and support for civil society.

Germany businessman Günther-Peter Storbeck Photo: Antonio Cascais
German businessman Günther-Peter Storbeck (r) hopes to sell machinery in AngolaImage: DW/A.Cascais

But this is not easy in a country that has an authoritarian leader. Politically, the former Portuguese colony is far from being a perfect democracy. President Jose Eduardo dos Santos has been in power for 34 years.

Corruption and oppression are typical features of his style of governance. "Angola is not as transparent in many areas as we would like it to be," Andreas Wenzel from SAFRI told DW.

At the time of Chancellor Merkel's visit two years, a German arms deal with Angola's navy made headlines in the German media. Following a meeting with President dos Santos, Angela Merkel was quick to say the deal was about patrol boats to monitor border security.

Now, two years later, Angola's economics minister Abrahao dos Santos Gourgel dismisses the sensitive topic. "To be honest, I know next to nothing about about any arms deal," he said. "I think we should concentrate on other areas of economic cooperation."