Angola INDUSTRY
Workers build drying racks at a small government-run fishing
village.
Under the Portuguese, the manufacturing sector grew
rapidly
because of the substantial increase in the size of the
white
settler population, the creation of a large domestic
market for
goods, and the strict exchange controls imposed in 1962
that
encouraged investment in local industry. The manufacturing
sector
was dominated by light industries that produced consumer
goods,
especially the food-processing industry, which accounted
for 46
percent of the value of manufactured output in 1973. In
contrast,
heavy industries accounted for only 22 percent of output.
When the
settlers fled, most small manufacturing firms were left
without
their clerical work force, their managers, and even their
owners;
in 1976 only 284 out of 692 manufacturing businesses were
operating
under their old management. In reaction to the decline in
the
manufacturing sector, in March 1976 the MPLA government
enacted the
Law on State Intervention and nationalized all of the
abandoned
businesses. However, by 1985 industrial production was
only 54
percent of its real value in 1973.
In the years immediately following independence, the
government
spent large sums to put plants back into operation, but
its plans
were overly ambitious, and it overestimated the state's
capacity to
keep factories supplied with necessary materials and
inputs. In the
early 1980s, investment was cut drastically, as the
government
sought to control expenditures and the foreign exchange
deficit.
Because of limited funding, projects were more carefully
selected,
and there was clearer recognition of the need for
simultaneous
restructuring in other sectors, particularly those
supplying raw
materials for manufacture. By 1986approximately 180
companies were
operating in the manufacturing sector, and their output
was equal
to about 13 percent of GDP. Of that amount, state-run
companies
accounted for 56 percent.
Among the most acute problems for industrial
rehabilitation
were shortages of raw materials, unreliable supplies of
water and
electricity, and labor instability. The decline in
domestic
production of many raw materials has been especially
critical in
the decline in local manufacturing. For example, by 1986
only a
small fraction of the 8,000 tons of cotton needed annually
by the
textile industry was supplied locally, while during the
early 1970s
Angola exported raw cotton. The deterioration of the water
supply
system has also damaged many industries, especially
breweries, as
have cutoffs in electricity supply. Furthermore, labor
problems, a
consequence of a shortage of skilled workers and
disincentives to
work for wages in an inflated economy, have depleted the
local work
force. Foreign exchange constraints have also prevented
many
industries from importing the necessary raw materials.
Data as of February 1989
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