Angola's Vast Economic Potential: Angola's many natural resources make it one of Africa's wealthiest nations. Oil: The Engine of Angola's Economy Producing nearly 700,000 barrels a day, Angola is the second largest oil producer in sub-Saharan Africa. Crude oil accounts for 90 percent of total exports, more than 80 percent of government revenues and 42 percent of the country's GDP. Oil output is expected to reach one million barrels per day by the year 2000. The country's known recoverable reserves are currently estimated to total almost 4 billion barrels, but continuing exploration finds new reserves at the same rate oil companies deplete old ones. Approximately 15 foreign companies, including Chevron, Texaco, Exxon and Occidental, have invested more than $8 billion in Angola. Oil companies are attracted by Angola's low operating costs, favourable geology and good business terms. U.S. firms continue to invest more money in Angola. Chevron, which has been operating in Angola for over 40 years, announced it had discovered four new offshore fields with 300 million barrels of recoverable oil. It plans to invest $2.8 billion between 1994 and 1998 to develop deep-water oil fields off Angola's coast. Texaco has been in Angola for more than 25 years and will invest $600 million to develop new fields. Halliburton was recently awarded a $200 million dollar contract to develop oil well services in Cabinda province, which will benefit all oil companies operating there. Diamonds Before 1975, Angola was the world's fourth largest producer of diamonds. Economists estimate that Angola's alluvial reserves total between 40 and 130 million carats. In addition, there are untapped diamond reserves in volcanic pipes called kimberlites. Angola's six known kimberlite pipes, among the ten largest on earth, hold an estimated 180 million carats worth several billion dollars. Currently, official and unofficial diamond production is estimated to be worth $700 million per year. Angola recently announced changes to its production program, which outlines its goal to produce more than 2 million carats of diamonds annually. Other Minerals With substantial deposits of gold, iron ore, phosphates, manganese, copper, lead, quartz, gypsum, marble, black granite, beryl, zinc and numerous base and strategic metals, Angola has been described as one of the world's biggest and least developed mineral treasure troves. The government has developed a policy framework to encourage investment in the mining sector. It has ended the state monopoly on geological studies and mineral prospecting and will award concessions to both foreign and national companies for prospecting as well as production. Agriculture Angola was self-sufficient in most food crops and a major exporter of coffee and sisal at independence. The potential remains to redevelop the once very prosperous agricultural sector. The United Nations estimates the country has from 5 million to 8 million hectares of prime agricultural land as well as areas suitable for grazing. The country's different climatic zones enable farmers to grow a wide variety of crops, including: cassava, yams, maize, bananas, beans, cotton, manioc, palm oil, potatoes, sunflowers, citrus and numerous vegetables. Prior to war, Angola was the world's 4th largest coffee producer with outputs totalling 200,000 tons each year. In 1995-96, Angola more than doubled its coffee output thus demonstrating that this once rich export sector is making a recovery. Coffee production during the 1996-97 seasons is forecasted at 8,000 tons and is projected to reach 120,000 by 1998-99. Angola recently submitted a plan to the International Coffee Organization that would overhaul the sector over the next two years. Under its privatisation program, the government plans to liquidate all 33 state-owned coffee companies and to invite international investors to bid for the largest plantations. Timber Angola also has considerable timber resources. Valuable tree species, including rosewood, ebony, and African sandalwood, as well as mahogany, tola and mulberry can be found in the northern forests that have been untapped since independence. Nearly 150,000 hectares of eucalyptus, cypress and pine plantations are waiting to be rehabilitated. Fisheries Angola's 1.600-kilometre coastline offers some of the richest fishing grounds in Africa. The annual catch once averaged 300,000 tons a year. The government has deregulated fish prices and, with World Bank assistance, set up the Angolan Support Fund for Fisheries Development to support the development of the industry. The U.S. Trade and Development Agency recently commissioned a feasibility study on this potentially lucrative sector. Electric Power Generation Angola possesses enormous hydroelectric potential because of the large and powerful rivers that cross the country. Once completed, the 520-mw Capanda Hydroelectric Dam on the Kwanza River will double Angola's generating capacity and provide enough power to meet the country's needs for the next four decades. Angola currently generates more electricity than it needs and could very well be a regional exporter of hydroelectric energy. Angola is part of an international consortium to develop power stations along its border with Namibia. Manufacturing Before independence, Angola's manufacturing sector employed 200,000 people and produced $650 million worth of goods. With the end of the war and an infusion of capital, technology and training, food processing and light industry should recover quickly. Angola previously produced beer, sugar, wheat flour, cooking oil and soft drinks as well as textiles, soap, paint, plastic and glues. Heavy industry, including cement and steel tube production, oil refining, vehicle assembly and tire production, account for about 15 percent of the country's manufacturing output.