LUANDA, Oct 7, 2008 (AFP) - A floating city or a naval siege? The small bay of Angola's capital Luanda is illuminated at night by a long queue of ships waiting to offload the cargo that feeds Africa's fastest growing economy.

Waiting for up to two months at a time to enter the saturated port, the vessels stretch out as far as the eye can see, bearing testament to the city's struggle to keep up with double-digit growth in the oil-rich state.

Luanda, once seen as the capital of the Portuguese empire, has been rudely awakened from the slumber of three decades of civil war that sent millions fleeing to the city to escape rural violence.

Laden with oil, diamonds and millions of hectares of land that is arable but heavily landmined, the world's eyes have fixed on Angola as Africa's most promising breadbasket and oil producer.

Economic growth -- at just 3.3 percent in 2003, the year after the war ended -- is set to top 20 percent this year.

'We believe that Angola will be a fantastic place. The future will pass through Angola, without any doubts, in terms of Africa,' says Bernardo Soares, the managing director of Pinto Basto shipping company.

Soares, whose company represents transport giant Mediterranean Shipping Company in Angola, is among those with ships waiting at a cost of up to 30,000 US dollars a day before docking in Luanda.

The small port, built at a time when Angola was an exporting country, is like much of the sprawling city -- unable to grow, battling insufficient capacity, collapsing infrastructure and nightmare logistics.

A new port being built 35 kilometres (20 miles) north of Luanda at Barra do Dande will allow Angola to boost imports, but will take years to complete.

'We have to create solutions. It is impossible to match the speed of growth,' Soares told AFP.

A sprawling slum peppered with brand new high-rises and gleaming buildings owned by oil companies, Luanda is a hive of construction activity.

Huge investment from countries such as China and former colonial power Portugal are pouring in to build roads and railways around the country.

'There are road projects, water projects, hospitals, (but) there is the problem of saturation, Angola can't cope with the level of development going on at the moment,' says Alex Vines, Angola expert at London-based Chatham House think tank.

With five million people living in a city designed for 500,000, housing is in short supply, driving rents to thousands of dollars a month.

The devastation of civil war has left the once-prosperous nation unable to produce even the most basic goods, and the ships waiting to enter the harbour carry everything from toothpaste to fresh tomatoes and flowers.

This makes Luanda the world's most expensive city, on a par with Tokyo, where you can get the best of almost anything, as long as you are willing to pay.

Rich red chunks of Argentinian meat, the best Brazilian Cachaca, Portuguese wines and fresh cheese line the shelves of Casa de Frescas -- a supermarket for the superwealthy oil and political elite willing to fork out five dollars for a four-pack of miniature cups of yoghurt.

Economist Lopes Raul decries what he sees as 'virtual development' in the city, saying the growth has not benefited the nearly 80 percent of the country who live on less than two dollars a day.

'Virtual development is when we see very high buildings but by the side of it we see misery. When a foreigner comes to visit he has the impression Angola is growing but ... quality of life, hope, are not growing.

'There is still no structural development so we can serve the people according to what their needs actually are.'

The dominant ruling party -- which swept legislative elections in September -- has pledged change and growth. Many are sceptical, but small changes are becoming visible.

New roads built around the city are still packed bumper-to-bumper, but have already eased the pressure slightly.

Less than a year ago garbage was piled onto city sidewalks to be burned at night. Now the bonfires have died after government started up its first rubbish collection service at the end of 2007.

However Raul feels government is focusing development in the wrong areas, instead of training and building up an impoverished population.

'If people living along a (newly built) railway are not economically prepared to do anything, what economic impact will that have?'