OIL

Angola is Africa's second-largest oil producer after Nigeria.

In 2003 the government earned $3.89 billion from oil revenues, according to IMF figures. The IMF predicts that oil production will double to 2 million barrels per day by mid-2007.

The government has pledged to make its oil sector more transparent after IMF investigators in 2003 found evidence of widespread corruption, estimating that one billion dollars a year went missing.

Much of Angola's oil wealth lies in Cabinda, an Angolan enclave situated between the Democratic Republic of the Congo (DRC) and the Republic of the Congo where a decades-long separatist conflict is simmering.

The Angolan government is taking out some major loans on the basis of its oil revenues. China has lent the government $2 billion against Angola's future oil revenues. The money is being used to help rebuild the country's infrastructure.

DIAMONDS

Angola is one of the world's largest diamond producers.

During the war, rebel forces controlled many of the diamond mines and sold diamonds to buy arms. As a result the United Nations imposed sanctions on such "conflict diamonds".

In a bid to clean up the industry after the war and crack down on smuggling, the government has expelled more than 300,000 illegal foreign miners since 2003. Amnesty International has reported severe human rights abuses carried out by police against suspected diamond smugglers.

State diamond company Endiama has signed a series of deals with foreign investors, including De Beers. The diamond giant pulled out of Angola in 2001 over a dispute with the government and Endiama. It has now signed an agreement to prospect for diamonds in a 3,000-square-kilometre (1,160-square-mile) concession area in northeastern Lunda Norte province.

Partnership Africa Canada says that despite a projected income of $900 million in 2005 from diamond mining, many people living in the diamond-rich provinces of Lunda Norte and Lunda Sul still have no drinking water, electricity or roads.

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