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Oil for Expertise Could Trigger Angolan-South African Trade Deal

South African President Jacob Zuma and many of his cabinet ministers are in Angola Wednesday for Mr. Zuma's first official state visit since becoming president.

A government statement describes the visit as the largest business-related delegation to Angola since South Africa's 1994 democratic elections.

Cornelius van der Waal, program manager for the energy and power supplies team of Frost and Sullivan Africa in Cape Town, is watching developments.

"Angola is one of those relative success stories in Africa at the moment. I think they've moved out of the era of conflict and war and, as a result of the oil money that they are receiving, Alot of the money is now being pumped into projects," he says.

Angola has what South Africa wants

South Africa at this stage (is) obviously an oil dependent country…. So we import all our oil, mainly from Iran. And there's a golden opportunity for us on our doorstep to partner with another African country and develop projects for mutual benefit,' he says.

"South Africa has a lot of engineering skills…expertise in management, financial systems…. And these skills are dearly needed in Angola at this stage," he says.

Van der Waal says South African companies have a "huge opportunity" before them.

And then there's China

China is eager for Angolan oil as well and has given the country financial aid and expertise. But does South Africa view China as a competitor?

"Yes, to some extent…. But I think the level of development in Angola is of such a nature that they can do with more help than just from the Chinese. I think there's a bit of a feeling in Africa that different African countries need to help one another," he says.

Weighing the risks and benefits

Angola has been the target of many corruption allegations. Van der Waal calls it a "major stumbling block for future development."

"Corruption in Angola is a significant problem, same as in Nigeria. It's one of those areas that's not really being addressed sufficiently. I think that the Angolan government is doing some things right in terms of…corruption, but I don't think all the areas are being addressed," he says.

He says a major deal with Angola could boost the South African economy.

"In the short term, I think it will open up new markets for South African companies. Obviously, we would like to have access to some of the minerals and the oil," he says.

Van der Waal says many Frost & Sullivan clients are interested in Angola.

"Money is very closely linked to resources and…empowers countries, such as Angola and Nigeria. So, yes, certainly, Angola is very high on the radar for most companies trying to expand into Africa," he says.

He says he understands why it's taken so long for South Africa to make a make trade and investment push in Angola.

"The level of development in Angola has been so low for so long that it's just been very difficult to talk from the same page. However, a lot of the oil money is now starting to flow through into projects. If you go into Luanda, it's just a beehive of activity," he says.

He says it's now ripe for investment.

"I think it's long overdue and it should have probably happened before," he says.