Angola Investing Logistics to Unlock Trading and Transport Hub Potential

Connectivity is a priority of the Angolan government, with substantial investment being made in the country’s transport infrastructure to create an integrated grid of road and rail networks, airports and deepwater ports. This logistics system is the key to unlocking Angola’s potential as a trading nation and a transport hub for the whole of southern Africa. Blessed with one of the most extensive coastlines in Africa, Angola also possesses some of the continent’s most well-established railways. This makes it perfectly positioned to transport the valuable natural resources found not only within its own borders, but also in landlocked and mineral-rich neighboring countries, including Zambia and the Democratic Republic of Congo (DRC).

At the heart of this travel grid is the extensive Benguela Railway, which connects the Atlantic Ocean with the mineral deposits of Central Africa. The railway has recently been modernized with a government investment of $1.9 billion, and Angola is offering incentives to private investors to support an extension of the 1,344-kilometer (835-mile) railway to the border with Zambia and its famous copper belt. “The expansion potential is enormous,” says Otoniel Mario de Almeida Manuel, Technical Executive Manager of the Benguela Railway. “Railways are the agents of economic growth and development.”

The rail extension is intended to facilitate the global export of copper and cobalt produced in Zambia and DRC via Angola’s Atlantic port of Lobito. Currently, these materials are mostly transported via Durban, South Africa, and Dar-Es-Salaam, Tanzania—journeys four times as long as those taken on the “Lobito Corridor,” as the Benguela Railway route is known. “From the geopolitical and geo-strategic viewpoints, the Lobito Corridor is the shortest route,” says Manuel. The Benguela Railway already transports copper and manganese from Congo and carries sulfur, sodium and construction materials in the opposite direction for use in industry. It is benefiting from a modernization program that has enabled the acquisition of 50 locomotives from General Electric, new passenger cars and cargo wagons, and the construction of station buildings and installation of modern signaling and telecommunications systems. Manuel notes that Rovos Rail, a luxury travel company based in South Africa, has partnered with the Benguela Railway and given it “their quality seal.”

Transport integration is key. The Lobito Corridor, with four airports along its route, is “an array of infrastructures, with railways, roads, airports and seaports that connect several regions,” making Angola “a logistics and transport center for the region of Southern Africa,” says Manuel.

António Henriques da Silva, Executive Chairman Angola’s Agency for Private Investment and Export Promotion (AIPEX), believes that the country’s 1,600-kilometer (1,000-mile) coastline can enable it to transform the African economy by being the international gateway for landlocked nations such as DRC, Zambia and Botswana. “We are going to be able to create the value chains that will help us to grow our economy, but also to grow the economies of other countries,” he says. These advanced supply chains “will enable Africa as a whole and Angola, in particular, to play a much stronger role in the global economy.” Angola’s government has created a development plan designed to support “multimodal transportation through the joining of ports, railways and roads,” explains Ricardo Viegas de Abreu, Minister of Transport.

Angola’s advantage is its strategic position with an Atlantic platform. Its six major ports are benefiting from government-backed modernization and the country is looking to introduce private operators with international credentials. “We have been investing not only in infrastructure, improving ports’ capacity and operational conditions, we have also invested in operational standards,” says de Abreu. Angolan ports comply with International Maritime Organization conventions.

As Angola’s transportation ambitions are on their way to being realized, the country has partnered with the International Civil Aviation Organization and introduced a new airspace management program to increase safety, capacity and efficiency. In the capital, Luanda, an integrated ticketing system enables customers to take a bus, train or ferry using a single ticket. “It will bring a great improvement to urban mobility,” says de Abreu. Angola is working with experts from the Netherlands to maximize supply chain efficiency in the transport of agricultural goods, he says, so “our products can be placed on shelves in Angola and abroad in good condition for consumption.”

Angola’s growing transport sector currently contributes 12% to GDP, and de Abreu asserts that it can be the game changer for the entire Southern African economy. Echoing Manuel, he points out that: “This is a sector that galvanizes and catalyzes economic development.” In terms of governance, President João Lourenço “played a key role” in introducing high standards for eliminating corruption. “As a result,” said Da Silva, “we are seeing that Angola is being perceived as somewhere that not only mentioned that it wanted to tackle corruption but came up with concrete examples of how we dealt with it in a very short period of time.”

In January, Transparency International reported that Angola has doubled its Corruption Perceptions Index (CPI) score and praised its “significant improvement” since the 2017 election of President Lourenço “who has taken steps to crack down on corruption.” Da Silva also told the Bloomberg audience that Angola’s economic plan is based on “what we can achieve for future generations” by lifting people out of poverty through jobs growth. “Employment creation is one of the standards of ESG that we want to have in place.”

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Written by Mercy ANURIKA

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