LUANDA (Reuters) – Angola received nearly $2.6 billion in non-oil private investment in 2005, according to preliminary government figures seen by Reuters on Tuesday which highlighted a surge of interest in the country.

The National Agency for Private Investment (ANIP), in a provisional annual report for 2005, said it had approved 290 investment projects amounting to $2.57 billion.

The agency did not provide comparative figures.

A petro-boom is helping to fund reconstruction in Angola country following the end in 2002 of the south-west African country's 27-year civil war.

Most of the investments were in the construction sector, representing 85.4 percent of the total, followed by projects in industry, transportation and communication.

Angola is sub-Saharan Africa's second-largest oil exporter after Nigeria, pumping 1.3 million barrels a day (b/d) -- a figure the government expects to rise to 2 million b/d by 2008. "The prime aspect (for investment) is political stability," said Dealdino Balombo, head of ANIP. "Then comes economic stability and now there is confidence in the Angolan economy."

Angola's non-oil economy is expected to grow 11.9 percent in 2006, contributing to predicted overall GDP growth of 27.9 percent according to the Ministry of Finance. However, according to Robert Bunyi, head Africa analyst at South Africa's Standard Bank, the investment has not come all at once: "(It) could stretch over the medium term of 3 to 5 years due to the long lead times of infrastructure investments."

The figures reflect Angola's efforts to diversify away from oil toward a focus on industry. Oil accounts for over 80 percent of fiscal receipts, and is expected to grow at 37.2 per cent in 2006 according to Ministry of Finance figures, but provides only a fraction of the jobs in a country where unemployment is rampant.

"Oil will continue to be the backbone due to its sheer scale plus the rate of expansion envisaged. I'm not sure if this is enough evidence of diversification or conversely is it just evidence of the benefits of a booming oil sector," Bunyi said.

Former colonial power Portugal, the United States and South Africa were some of the biggest investors, along with China, where businesses have taken advantage of a $3 billion oil-backed credit line Beijing extended to the Angolan government. However, Balombo also acknowledged that there is still a long way to go: "Lack of human capital and infrastructure is the main problem. But we are creating a new generation with new skills imparted by foreigners."