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Russian bank lends US $1.5 billion to Angola
Oil exports and foreign loans have spurred economic growth and have fuelled a reconstruction boom in Angola.
The local government agreed to the loan from VTB Capital, the investment arm of Russian’s second largest bank VTB Group, for a series of public investments projects including infrastructure.
VTB Capital is one of four Russian lenders who have funded almost $300 million of loans to Angola as far back as 2011.
The US $1.5 billion loan is one of several the Angola government has taken on in recent months coinciding with a significant fall in tax revenue due to lower oil exports, Angola’s primary source of tax revenue.
“Angola is seeing strong economic growth and great improvements”
Gaspar Lino is considered an expert in African business and is currently participating in state and infrastructure funding representing Russian State Corporations in Africa.
Lino said that the Government of Angola “is investing a lot in the country's infrastructure and creating the base for future development and economic growth. This industrialization of the country will mean Angola becomes less dependent on tax revenues deriving from oil.”
With the growing number of Russian corporations investing in Angola, Russia could be set to overtake the African nation’s biggest economic partner, China.
Major aspects of relations between the two countries are China’s loans in exchange for oil as well as involvement in Angolan infrastructure, according to China Briefing.
Meanwhile, following a pledge earlier this month by US company General Electric Co to invest $2 billion in Africa by 2018, its CEO Jeffrey Immelt said Africa's rich natural resources and potential swell in local demand for electricity primed the region for investment.
According to Reuters, GE also extended their ‘country-to-
“What you have is huge demand and actual supply, and what's in the middle is gaps in financing and technology and localization,"
ALL EYES ON AFRICA
In October 2013 Bloomberg reported how VTB Capital planned to increase fixed income and equity-market business in Africa, as the Russian giant believes the region offers “the best expansion opportunities.”
We see Africa as our biggest growth market in the near future” Makram Abboud, VTB Capital’s chief executive officer for the Middle East and Africa, said in an interview in Moscow according to Bloomberg.
VTB’s interest in investment opportunities afforded by Africa is shared by other Russian corporations. In a recent Eurasia Review article one source explained how “‘there is enough room and gaps in Africa for Russians to fill too, in a meaningful way, which can benefit all parties involved. The poor and low level of infrastructural development in Africa constitutes a huge business for Russian construction companies to step in. Energy is another sector Russians can help in developing.”
Several delegations from African states – including Angola – visited Moscow earlier this year as Moscow seeks to strengthen ties with Africa.
As far back as January 2011 former Angolan Trade Minister Maria Idalina Valente echoed the Gaspar Lino’s words, saying that Angola’s biggest challenge was the diversification of its economy beyond oil, something the south-central African state is making great strides to achieve.
For more information about Gaspar Lino visit: http://gasparlino.com/