Angola may be unable to implement part of a $42-billion programme to rebuild its infrastructure because of the global financial crisis and drop in oil prices, the country's president said on Tuesday.
Angola, which rivals Nigeria as sub-Saharan Africa's largest oil producer, has embarked on a massive upgrade of railways, ports and other infrastructure destroyed during a 27-year civil war. It is also investing heavily in developing the economy beyond the oil sector.
The spending is being financed largely by oil revenue and loans linked to oil production. But fears that the world economy is headed for a recession have pushed oil prices from a record high above $147 a barrel in July to about a third of that level.
"If there isn't a quick economic recovery, some of our plans may be put into question and we may lack the resources to continue rebuilding the nation and relaunching our non-oil sectors," President Jose Eduardo dos Santos said.
He was speaking at the opening ceremony of the Gulf of Guinea Commission, a bloc comprised of Angola, Cameroon, the Republic of Congo, Gabon, Equatorial Guinea, Nigeria, the Democratic Republic of Congo and Sao Tome and Principe.
While arguing that Angola was relatively protected from the financial storms engulfing the United States and Europe, the Angolan leader urged Gulf of Guinea nations to work together to seek solutions to problems that might arise from the crisis.
The region is the hub of sub-Saharan Africa's oil sector, accounting for 15 percent of world oil production and attracting heavy investment by Western oil majors, Chinese state firms and others keen to tap into the vast offshore reserves.
But the growing uncertainty in the oil sector has sent a chill through the region and crunched national budgets.
Angolan Finance Minister Severim de Morais told Reuters that his government might lower the oil price projection in place for the 2009 budget if prices continued to fall. Angola has calculated its budget based on an oil price of $55 per barrel.
"We are closely monitoring the situation," he said.
Oil makes up over 80 percent of the southwestern African nation's exports and a projected 58 percent of gross domestic product in 2008, according to the World Bank.
Angola's economy, one of the fastest growing in the world since 2002, when its war ended, is forecast by the World Bank to expand by 11.8 percent in 2009 after projected 15 percent growth in 2008, buoyed by growth in agriculture, construction and other non-oil sectors.
