"The oil curse is a possibility here - but it has the opportunity to change the curse into a blessing if it puts good policies in place and improves transparency," Francisco Carneiro told Reuters.

Last week the World Bank released a new report on Angola which advises the government to make a full transition from a centralised economy to a free market and better manage its spending.

Angola has one of the fastest growing economies in the world - projected to grow 31,4 per cent in 2007, according to the International Monetary Fund (IMF).

Oil production, buoyed by the end of a 27-year civil war in 2002 and heavy foreign investment, has risen more than 10 per cent to 1,4 million barrels per day since last year.

Output is expected to hit two million b/p/d in 2007.

Carneiro warned that time is running out to ensure that its newfound economic fortune is put to good use, in vital areas like infrastructure and employment.

"Oil will peak in five to six years and then decline.

To build the infrastructure will take time, so needs must be managed with civil society participation," he said.

Critics have for long bemoaned what they see as the Angolan government's opaque finances.

Earlier this year the government for the first time published its signature bonuses received from companies bidding for new offshore acreage.

But Carneiro said this is not sufficient and accused state-oil company Sonangol of continuing to operate outside the budget.

He said, worryingly, the rise in oil production and accompanying exchange-rate appreciation has seen a steep decline in agricultural exports, rendering it difficult to develop local industries and create employment.

"Government is spending money but not generating employment.

This is a serious concern - government has to be more upfront about how to help the poor," Carneiro said.

Angola's relations with the World Bank and the IMF have been strained due to the Bank's concerns about corruption and a lack of democratic progress.

The government has responded by strengthening political and financial ties with developing nations, particularly China, which has provided more than US$3 billion in oil-backed credit and loans since 2005.

Nampa-Reuters

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