When Angolan author José Eduardo Agualusa was told he had won one of the world’s richest book prizes, it realised a dream. The author, whose novel A General Theory of Oblivion has scooped the €100,000 (£88,000) International Dublin literary award – formerly known as the Impac prize – has long desired to build a library in his adopted home on the Island of Mozambique.

“What we really need is a public library, because people don’t have access to books, so if I can do something to help that, it will be great,” Agualusa says. “We have already found a place and I can put my own personal library in there and open it to the people of the island. It’s been a dream for a long time.”

The happy symmetry of channeling money from a prize chosen by librarians around the world into a new library is not lost on the writer. “It is funny … I really appreciate the fact that the prize is chosen by librarians.”

Not that he thought he would be the first choice of those voting in the Dublin-based literary award. “I was really surprised,” he says, on getting the phone call that informed him of his win. “A close friend, Mozambican author Mia Couto, was also on the shortlist, and I really believed he was going to win.”

But it is easy to see why a global audience voted for a novel in which a woman bricks herself into her flat on the eve of Angolan independence, only to emerge 28 years later. Ludovica Fernandes Mano, a Portuguese expatriate, fears for her fate in the newly independent African state, so instead chooses to live in isolation for three decades, only experiencing the outside world through snippets of neighbours’ conversations, a window and a radio that gradually dies, as she distils all she sees into diaries, and later on the walls of her apartment.

Agualusa is one of the biggest literary stars in the Portuguese-speaking world; A General Theory of Oblivion was also nominated for the 2016 Man Booker International prize and his earlier novel The Book of Chameleons won the Independent foreign fiction prize after its 2007 translation. Mining the turbulent recent past of his home country to write a plot so well imagined that it was rumoured to be based on a true story, Agualusa shows how a small country’s internal conflicts can be exploited by other nations.

Though he resists comparisons with the present-day conflict in Syria, the author admits the novel is prescient. “What is significant for me about the book is that it is about fear of the other, about xenophobia, which is a very topical theme,” the 56-year-old says. “This is important in Angola, but also everywhere else.”

Set in Angola, which was a cold-war frontline as a Soviet and Cuba-backed government fought against US-trained and South Africa-backed insurgents, A General Theory of Oblivion also examines the country’s transformation from a Marxist-Leninist state into one of the fastest-growing economies in the world. It is just the latest novel in which Agualusa uses fiction to better understand his country’s shift from conflict to prosperous peace. “When I wrote my first novel Creole, it was because I wanted to understand Angola and my place within her. You can’t explain the present if you do not understand the past.”

While he says Ludovica’s story was not based upon a real event, a similar, true story did emerge later: “After the book appeared, in Mozambique it came out that a couple had lived almost 30 years in a closed place just like Ludo. It’s crazy, but [my book] has become true by accident.”

The novel was translated by British writer Daniel Hahn, who has worked with Agualusa on five other books. The two will share the prize money, with €25,000 going to Hahn, who says: “My career began with Agualusa.” Over the years, the two have formed a comfortable relationship, one that Hahn says enables him to stay true to the “music, cadence and comedy” of Agualusa’s prose.

“One of the things that has changed is that when we first worked together, I would visit him and we worked very closely, because it is important to reassure the writer that the translator is not a lunatic or idiot and that I know what I am doing,” says Hahn.

As a tribute to the closeness of their relationship, Hahn adds that he plans to use half of his winnings to launch the £2,000 Translators Association first translation prize. The rest of the money? “I’m going to spend it on plumbing in my new home. You have no idea how excited I am that I will have central heating,” he said.