by Richard Chidowore
The possible end of the war in Angola, following the recent signing of a peace accord by the MPLA-Ied government and Unita, has raised hopes that the war-ravaged but resource-rich country is now poised for investment and economic development.
The agreement, signed in the Zambian capital Lusaka on 20 November 1994, could mark an end to 19 years of one of the bloodiest conflicts in the world.
However, there has been speculation in Luanda that Unita leader Jonas Savimbi, who did not attend the signing ceremony, is critically ill. Reports say Savimbi was injured during fierce fighting before the capture of his Huambo headquarters in November.
The news sheet Imparcialfax, published in the capital Luanda, has raised doubts over Savimbi’s signature in the document authorizing Unita secretary general Eugenio Manuvakola, to sign the Lusaka Protocol.
The news sheet says it carried out a comparative graphological study between that signature and another made in 1992 in Huambo, and concluded that the former signature came from a rubber stamp while the later was written by hand, which suggests, according to Imparcialfax, that Savimbi is incapacitated.
Unita parliamentarian in Luanda say they do not have concrete information about Savimbi, but argue that if their leader was physically incapacitated, it would be normal for a troika to be formed to lead the party.
However, what most people seem to agree on is that the peace agreement signals an end to the conflict that claimed more than half a million lives. War resumed after Savimbi refused to accept the results of the Unsupervised elections of September 1992 that gave victory to President Eduardo dos Santos’ government.
Peace in Angola should open the door to an international effort to help rehabilitate the shattered infrastructure and stabilise the economy of an impoverished but fertile land rich in oil and diamonds.
The peace accord offers hope to millions of rural Angolans who were internally displaced, to be able to return home.
“For us the people of Angola, we have lived through very difficult times. For the man in the street, we want to see weapons replaced by books, pens, and schools,” said Luanda resident Tito Rangel.
Under very difficult conditions, the MPLA government has been trying to implement an economic and social programme (PES) which aims to open the economy to market forces. The peace settlement is expected to create a conducive environment for the implementation of the ambitious targets set for the PES, which — like a previous reform programme abandoned when the war resumed – could not be realised without peace.
However, economic conditions will remain fragile due to huge social disruptions caused by the fierce fighting, the destruction of many industries and the impact of low world prices on the country’s main export – oil.
The war confined organised economic activity to the main urban areas controlled by government and the coastal oil producing sector, as most infrastructure and trading systems inland have been destroyed.
This had particularly affected diamond output, as the main producing fields in the northern Lunda Norte province had been under Unita control since May 1993.
The situation, however, has been reversed following the government’s recapture of the strategic diamond-rich area of Cafunfo in September 1994. It was from this area that Unita mined the diamonds that helped it wage war on the Angolan government. The Cuango Valley, which once contributed some 90 percent of all national diamond production is in Cafunfo area.
Coffee, once Angola’s biggest export, has suffered a precipitous decline and despite the recent sharp improvement in global prices, most plantations are in a poor state or in unsafe areas. With oil accounting for about 97 percent of total export earnings, a recovery in global prices will be crucial to restoring Angola’s external credit. In the short term, growth in oil production could regain momentum during 1995-96 with the development of new fields in Cabinda.
The overall balance of payments deficit reached a record $1.5bn in 1993. With no debt rescheduling agreements during the past five years and foreign exchange reserves virtually exhausted. Angola’s total debt obligations which now stand at around $l l bn will be difficult to meet.
Although the government’s economic team has held initial talks with the IMF, an aid package on the scale required is unlikely to be negotiated until the peace accord is being implemented.
During the first 10 months of 1994, there was an inflation rate of 411 per cent, meaning that product prices went up five times on average between January and October. By the end of 1994, annual inflation was well above the 260 per cent rate predicted by the government in March.
The local currency, the kwanza, was devalued by 46 percent in October, the most severe drop on record. The severe devaluation saw the introduction of the new 500,000 kwanza notes which amount to less than US $1.
Critical shortage of goods and services at official prices has led to the rapid development of parallel markets, in which prices are freely determined by demand and supply. Though parallel markets charge much higher prices than the official markets, they play an important role in the Angolan economy providing most consumers, and even many producers, with the only opportunity to obtain goods and services in short supply.
Insecurity in many areas of the country has severely affected production, especially in the agricultural sector. Until recently it was estimated that less than 20% of the Angolan territory was relatively safe from war disruptions.
The brutal war has intimidated foreign technicians, some of whom have been captured by Unita. It has also forced the exodus of hundreds of thousands of peasants into the urban and other relatively safe areas where most of them depend on food relief.
The displacement has also seriously disrupted agriculture, leaving a third of Angola’s more than 10 million people dependent on aid .
Industrial production is almost at a standstill, Almost all goods in the markets, from foodstuff to electrical appliances, are imported from Europe or South Africa.
Many important infrastructure facilities have been destroyed including bridges, hydroelectric dams and power pylons, railway tracks, mines, manufacturing plants, coffee plantations among others.
In the absence of war in Angola – and Mozambique which recently held successful multi-party elections won by the incumbent Frelimo party –land-locked countries in the region could make a choice between trade routes in Angola, Mozambique, South Africa and Tanzania. Currently most trade is through South African routes.
“Angola is rich in natural resources and so it will be economically sound for neighbouring states to get their oil, for instance, from a SADC member state to promote intra-regional trade,” said a Harare-based economist.
Security and growth. even in South Africa, argues Greg Mills. Of the Johannesburg-based South African Institute of International Affairs, depend on ending the conflict in Angola which is currently preventing South Africa from taking full advantage of that country’s trade potential.
“South Africa will benefit enormously if it has countries around it that have credit, money to pay for services and things to export,” said Mills.
Meanwhile, a South African company De Beers intends to exploit diamonds in Cuando Cubango Province in the south west of the country from 1995. Moises Chingongo, Angola’s geology and mines deputy minister, says that a study is already underway in the area.
He says that his ministry intends to create a provincial office in Cuando Cubango to attract geologists and other technicians of the sector.
Now that most major towns are under government control and therefore relatively safe, indications are that the much needed investment could start to flow in. (SARDC)
