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Sat, 26 Mar 2016 10:54 - Updated Sat, 26 Mar 2016 10:54

China financing to Angola supports smaller projects

Luanda - The financing of China has become, with the breakdown of tax revenue, even more important to Angola and is being implemented in key projects of smaller dimension and better adjusted to local needs, according to the Economist Intelligence Unit (EIU).

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Photo: Lucas Leitão

Of the USD 6 billion of the Chinese financing under investment now, according to information released by the Ministry of Finance of Angola, USD 5.3 billion will be used to finance 155 public projects across the country, including a dam in Cuanza Norte, new roads and industrial parks, as well as social facilities such as hospitals, medical centres, schools, universities, water and power networks, as well as irrigation.

These options represent a change from the past financing packages, used in large projects, such as roads, railways, stadiums or airports, which have brought visibility, said the EIU in report on Angola.

EIU forecasts point to an economic growth of 1.1% in 2016, less than half of the figure for last year, but it should accelerate to 3.5% next year and 3.8% in 2018.

According to the Reuters news agency, the Chinese financing to Angola has around 25 billion dollars. The jobs provided by the new package will be delivered to Chinese companies, as in previous funding packages, but some changes to the procurement rules were made to increase the involvement of local businesses and workforce.

At least 20% of the works must be subcontracted to Angolan companies and it should be used local building materials whenever possible, which should result in greater local wealth creation and employment, which the government estimates at 365.000 jobs.

Tags Economy   Financing  

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