Reports. In-depth reports on the risk factors and threat implications of economic and financial statecraft.

Although Angolas path to democratization has been bogged down by the entrenched interests of the political elite and rampant corruption, the country has found significant success in economic terms by tapping into its vast oil wealth. Today, China takes a massive 48.1% of the countrys total exports, primarily in the form of oil deliveries. Of the 94% of Angolan exports that are made up of crude oil, some 50% go to China.

Angolas 9 billion barrels of crude oil reserves make it the second largest oil producer in Africa (behind Nigeria), producing and exporting about 1.7 million barrels per day. Due to its insufficient refining capacity, however, Angola exports essentially all of its heavy crude oil abroad. A majority of Angolas oil assets (nearly 60% of the countrys proven reserves) lie in the exclave of Cabinda, surrounded by the DRC, exposed to the pressures of separatist fighters with roots in the countrys bloody civil war. Many Cabindans, who face hunger, disease and poverty disproportionate to the rest of the country, feel they have not benefited from the regions oil wealth.

Although the countrys oil comprises about 50% of national GDP, 95% of exports and 70% of government revenue, Angola also boasts vast deposits of diamonds, copper, gold, marble and quartz. The oil industry remains dominant, however, and under the control of the Angolas state-owned enterprise, Sonangol, often described as a shadow government littered with corruption. In 2011, for example, the IMF discovered a $32 billion discrepancy in Angolas national accounts, most of which had flowed through Sonangol,amounting to one-quarter of the countrys GDP.

Much of Chinas financial support for Angola, notwithstanding the oil deliveries it is designed to secure (and, more recently, the fiscal deficits it is helping to bridge), has been used by Angola for infrastructure development that hold considerable strategic value for the country and the region, particularly with regard to the transportation corridors they open up. Perhaps the most significant among these is the Caminho de Ferro de Benguela (CFB) Railway that stretches across Angola from Lobito to Luau (on the border with DRC). The majority of these projects funded by China have involved the hiring of Chinese companies to fulfill them.

Excerpted Deals and Transactions:

• In late-2015, Angola reportedly took on $6 billion in financing from China, which, although ostensibly dedicated toward investment in infrastructure and public goods, is likely to be used as a gap filler during the current fiscal shortfall. There were also negotiations over a currency swap for Angola to use its access to Chinese renminbi in order to overcome liquidity crises.

• Huawei and ZTE Corporation are both highly active in Angola, highlighted by: ZTE deploying the first ever WiMAX network; ZTE being contracted to work on a classified secure telecom network for the Angolan Armed Forces; ZTE managing the operations of Movicel, Angolas state-owned phone company; Huawei deploying the first LTE network in the oil-rich Cabinda province; and, in August 2015, Huawei announcing an upgrade to the West Africa Cable System (WACS) that stretches from South Africa to the United Kingdom

• In 2008, the China Road and Bridge Corporation announced plans to construct a 12-mile bridge across the DRC linking Angola and Cabinda, a small, resource rich Angolan exclave along the Atlantic Coast, bordering the DRC to the south and the Republic of Congo to the north. The bridge, however, does not appear to have materialized further than initial planning, and the exclave remains remote and secluded.

• The China International Fund (CIF) is a private Chinese-owned investment group that was incorporated in Hong Kong in November 2003. It is 99% owned by Dayuan International Development, a syndicate commonly referred to as 88 Queensway Group. The groups key personnel and management is comprised of individuals with little business experience, but that have firm control over other entities registered to the companys Queensway address and various connections to Chinese SOEs and state intelligence. Companies linked to Sam Pa, the suspected leader of 88 Queensway Group, have an extensive global footprint, including highly questionable deals in Zimbabwe, Sudan, Tanzania and North Korea.

• A series of multi-billion-dollar oil for infrastructure loans from the China Export-Import Bank and the China Development Bank (CDB) have permitted Angola to rebuild while circumventing Western constraints and conditionality. Loans were offered with lower interest rates and longer maturities and grace periods than Western credits. The strings that were attached, however, involved payback coming in the form of oil deliveries and the employment of Beijing-approved Chinese companies to build the funded infrastructure projects (taking as much as 70% of the work).