Xi Jinping Backs Chinese firms willing to help Angola diversify economy from oil

Angola, China relationship went deeper on Friday after the Asian country pledged to support the African country’s effort to diversify its economy from oil.

This happened after Chinese President, Xi Jinping, backed Chinese firms looking to invest in Angola’s agriculture and manufacturing sectors.

This announcement comes as Angola, a significant oil-producing nation in Africa, seeks assistance in diversifying its economy and reducing its dependency on oil revenue.

President Xi expressed China’s willingness to collaborate with Angola on key infrastructure projects and facilitate the entry of robust Chinese companies into Angola for various forms of cooperation during a meeting with Angolan President Joao Lourenco at the Great Hall of the People in Beijing.

Angola’s decision to depart from the Organization of the Petroleum Exporting Countries (OPEC) in December and its subsequent agreements with China underscore the country’s strategic shift towards economic diversification and structural reforms.

The move is quite significant for other oil producing countries in Africa who have only been playing lips service to economic diversification from oil.

President Xi emphasized that Chinese companies could play a pivotal role in supporting Angola’s agricultural modernization, industrialization, and economic diversification—a testament to China’s commitment to fostering long-term economic and political ties with African nations.

The economic ties between China and Angola run deep, with Angola owing Chinese creditors nearly $21 billion, according to World Bank data.

This substantial financial stake has positioned China as a key player in Angola’s economic transformation.

The recent signing of an investment protection agreement between China and Angola, coupled with tariff-free access for Angolan goods to China’s consumer market, further solidifies the economic partnership between the two nations.

Moreover, the upgrade of bilateral ties to a comprehensive strategic cooperative partnership signifies a new chapter in Sino-Angolan relations, promising enhanced trade and investment opportunities.

Chinese investments in Angola have surged to approximately $12 billion since Angola joined China’s Belt and Road Initiative in 2014, with a significant portion allocated to the energy sector.

However, Angola’s vast reserves of base metals and agricultural resources, including sugarcane, coffee, cotton, and livestock, present untapped potential for growth and development.

Despite Angola’s rich resource endowment, the country’s heavy reliance on oil revenue poses challenges to its economic diversification efforts.

The International Monetary Fund’s recent assessment highlighted the risks associated with Angola’s oil-centric economy, projecting a decline in the oil sector and raising concerns about achieving targeted growth rates.

As Angola embarks on a path towards economic reform and diversification, the support and partnership of Chinese firms are poised to play a crucial role in driving sustainable development and fostering economic resilience.

By leveraging China’s expertise, investment, and technological capabilities, Angola can unlock the full potential of its non-oil sectors and chart a course towards a more diversified and resilient economy.

The evolving economic cooperation between China and Angola not only holds promise for both nations’ economic prosperity but also exemplifies the broader trend of deepening Sino-African relations.

The partnership between China and Angola holds immense potential to drive economic diversification, enhance bilateral trade, and propel Angola towards a more resilient and prosperous future.

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