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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Second largest oil producer in Africa, Angola also has the fifth largest GDP in sub-Saharan Africa. After a long civil war, the country posted one of the highest economic growth rates in the world, driven by its oil wealth. Angola was then severely affected by the fall in oil prices and by the fall in world demand (notably from China). In 2021, it entered its seventh year of recession (-0.7% GDP), hit by the COVID-19 pandemic, the collapse of oil prices and restrictions under the OPEC+ production agreement, but the non-oil sector started to recover. According to IMF estimates, the economy should pick up to 2.4% in 2022 and 3.3% in 2023, supported by the implementation of planned growth-enhancing structural reforms and a rebounding oil sector. A resurgence of Covid-19 infections, social unrest and weakened public finances are potential downside risks.

Already impacted by decreasing oil revenues since 2015, the Angolan economy was further hit by the Covid-19 pandemic that broke out in 2020. In 2021, higher oil prices, loosened restrictions, policy discipline and commitment to reforms helped the economy to start recovering. In addition to the stimulus plan designed to tackle the social impacts of the crisis, the authorities pursued the three-year reform program supported by the IMF. It aimed to restore external and fiscal sustainability, improve governance, and diversify the economy to promote sustainable, private sector-led economic growth (IMF). Fiscal discipline lead to a substantial budget surplus of 2.6% GDP in 2021, a trend that is projected to continue in 2022 (2.1% GDP) and 2023 (2.5% GDP) (IMF). Despite being still very high, public debt dropped from an estimated 136.5% GDP in 2020 to 103.7% GDP in 2021 (IMF). It is forecast to further decline to 90.8% GDP in 2022 and 83.3% GDP in 2023 (IMF). Driven by supply-side factors, inflation soared to an estimated 24.4% in 2021, and should gradually decline to 14.9% in 2022 and 9.9% in 2023, as global food inflation moderates and the central bank maintains a tight policy stance (IMF). The IMF-supported program came to an end in 2021, but the Angolan authorities remain committed to their plan of economic reforms, as reflected in the prudent fiscal stance adopted in the 2022 budget. Among the many challenges faced by the country, strengthening debt sustainability, addressing the financial sector’s weaknesses, diversifying the economy, improving governance and developing human capital and infrastructure should be key priorities (IMF).

President Joao Lourenço initiated numerous reforms aimed at reducing the influence of the dos Santos family on the economy, improving the perception of the business climate and getting the country out of the crisis, but the social situation of Angola remains tensed. Inequalities, economic sluggishness and inflation are nourishing people's dissatisfaction. Only a third of the population has access to electricity. The income per capita has been gradually increasing, especially in the metropolitan regions, but poverty and unemployment rates remain high. According to the African Development Bank, the pandemic is expected to exacerbate the 2019 official poverty incidence of 40.6%. Poverty is more dominant in rural areas (58%) than in urban areas (19%). The unemployment rate rose to 34% in the third quarter of 2020, with youth unemployment rising to a high of 56.4% (AFDB). According to the World Bank data (modelled ILO estimate) unemployment rate was at 7.7% of labour force in 2020. Violence in the region of Kasaï (Democratic Republic of Congo) provoked the arrival of more than 30,000 refugees in Angola.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 84.5258.3870.3474.9579.30
GDP (Constant Prices, Annual % Change) -0.5-5.4e-0.72.43.3
GDP per Capita (USD) 2,805e1,881e2,2012,2772,339
General Government Balance (in % of GDP) 1.6e-0.02.62.12.5
General Government Gross Debt (in % of GDP) 113.6e136.5103.790.883.3
Inflation Rate (%) 17.122.324.414.99.9
Current Account (billions USD) 5.140.875.164.273.54
Current Account (in % of GDP) 6.11.5e7.35.74.5

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Angola is Africa's second largest oil producer, a net producer of natural gas and also the third largest producer of diamonds in the continent, surpassed only by Botswana and the Democratic Republic of Congo. The Angolan economy - the fifth largest in sub-Saharan Africa - is dominated by the oil and gas industry, which accounts for about 50% of its GDP and is the primary source of revenue for the country (more than 70% of government revenue and 90% of Angola's exports come from oil activities). In addition to diamonds, the country also produces gold, granite, gypsum, marble, and salt, and possesses numerous undeveloped minerals with potential for extraction including beryllium, clay, copper, iron-ore, lead, lignite, manganese, mica, nickel, peat, phosphate rock, quartz, silver, tungsten, uranium, vanadium, and zinc. The industrial sector represents 45.9% of GDP and 7% of employment.

Despite its potential, the agricultural sector is underdeveloped and not very productive, contributing to 9.5% of GDP but employs 51% of the population. Only about a third of Angola's arable land is used for harvests; of those, only 100,000 out of 5 million arable hectares benefit from machinery and/or animal traction for sowing and harvesting. Angola's agriculture mainly consists of subsistence farming. The key industrial crops are coffee and cotton. The Government heavily invested in coffee, sugarcane and ethanol productions, which should help to diversify agricultural revenues and exports.

The services sector (banking, communication, tourism) is also growing rapidly, accounting for 39.6% of GDP and employing 42% of the population. Tourism is growing, although there is a severe shortage of hotels and other types of accommodation. The construction sector is booming (9% of GDP), driven by a large reconstruction program launched by the government.

The supply and demand shocks induced by the COVID-19 crisis particularly affected the oil sector, mining production and transportation and services, which were hit hard by the lockdowns. In 2021, manufacturing, trade and construction sectors drove the recovery while the oil sector remained downbeat (Focus Economics).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 50.7 6.8 42.5
Value Added (in % of GDP) 9.4 44.8 41.4
Value Added (Annual % Change) 6.9 -8.4 -1.3

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Angolan New Kwanza (AON) - Average Annual Exchange Rate For 1 USD 163.66165.92252.86364.80578.26

Source: World Bank - Latest available data.

 

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Foreign Trade

Angola has considerably liberalised its trade scheme over the last few years. Trade represents around 67% of the country's GDP (World Bank, latest available data). The country is a member of SADC (Southern African Development Community) and ECCAS (Economic Community of Central African States), and signed the African Continental Free Trade Agreement in May 2019. Custom duties are relatively low (9.5% in average). The imports of certain products, such as pharmaceuticals and agricultural products, still require authorisations from the concerned official ministries. Angola has also adopted the SADC guidelines on biotechnology, which ban the import of biotechnological particles. Delays in customs clearance at the ports still remain a major problem.

Oil exports account for more than 95% of total exports. The country is also a major exporter of diamonds and is exporting liquefied natural gas to the American, European and Japanese markets; other exports include, coffee, sisal, and fish. Imports mainly involve machinery, vehicles, spare parts, medicines, food, textiles, and military goods. Angola's main trade partners are China (more than 60% of exports), India, the European Union (Spain, Portugal) and the United States. In 2020 and 2021, Angola's oil revenues were impacted by the collapse of oil prices and restrictions under the OPEC+ production agreement.

Thanks to its comfortable oil revenues, Angola historically records a large but volatile trade surplus that should continue in the coming years. In 2020, merchandise exports decreased to USD 20.9 billion (from USD 34.7 billion in 2019), while imports dropped to USD 9.5 billion (from USD 14.1 billion). Services exports fell to USD 66 million (from USD 455 million in 2019), while imports dropped to USD 5.4 billion (from USD 8 billion) (WTO). In 2020, the trade balance declined to USD 11.4 billion, down from its 2019 level (USD 20.6 billion) (World Bank). Due to the fall in oil exports and the persistent impacts of the COVID-19 pandemic, the trade surplus narrowed further in 2021.

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 19,24614,46315,79814,1279,543
Exports of Goods (million USD) 25,16434,61340,75834,72620,937
Imports of Services (million USD) 12,54612,9039,7728,0085,415
Exports of Services (million USD) 1,15698563145566

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 53.452.366.464.362.6
Trade Balance (million USD) 14,54820,15024,96020,59911,394
Trade Balance (Including Service) (million USD) 2,6437,34115,50212,8815,881
Imports of Goods and Services (Annual % Change) -24.71.5-16.9-0.0-23.3
Exports of Goods and Services (Annual % Change) -18.4-4.21.20.8-6.8
Imports of Goods and Services (in % of GDP) 25.223.325.524.927.3
Exports of Goods and Services (in % of GDP) 28.129.040.839.335.3

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) -0.30.50.21.73.8
Volume of imports of goods and services (Annual % change) 22.10.90.95.04.8

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Member of African Union (AU)

Member of Southern African Development Community (SADC)

Member of Common Market for Eastern and Southern Africa (COMESA)

Member of Economic Community of Central African States (ECCAS)

Member of Organization of Petroleum Exporting Countries (OPEC)

 

Main Partner Countries

Main Customers
(% of Exports)
2019
China 61.3%
India 9.9%
Spain 3.4%
United Arab Emirates 3.2%
Portugal 3.2%
See More Countries 18.9%
Main Suppliers
(% of Imports)
2019
China 14.3%
France 14.1%
Portugal 12.9%
Belgium 6.3%
South Korea 5.3%
See More Countries 47.1%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President : Joao Manuel Goncalves LOURENCO (since 26 September 2017) - MPLA ; the president is both chief of state and head of government
Vice-President : Bornito De Sousa Baltazar DIOGO (since 26 September 2017) - MPLA
Next Election Dates
Presidential elections: August 2022
Legislative elections: August 2022
Main Political Parties
The MPLA party remains the largest parliamentary force and has had no real political challengers since independence. The largest parties include:

- Popular Movement for the Liberation of Angola (MPLA): social democracy, secured 150 of 220 recognized seats for an absolute majority
- National Union for the Total Independence of Angola (UNITA): centre-right, main opposition, strong grassroots support and is defined by its legacy as a guerrilla movement
- Convergence Angola Salvation Wide-Electoral Coalition (Casa-CE): faction that broke away from UNITA
- Social Renewal Party (PRS): centre-left
- Angolan National Liberation Front (FNLA): centre-right
Executive Power
The executive power is held by the Government. Following the general election, the head of the list becomes president, the second is appointed vice-president. The position of prime minister was abolished in 2010. The president is responsible for the appointments and powers of the government (ministers, secretary of state). The government is not answerable to the National Assembly. The president is also responsible for the appointment of four out of seven judges to the Constitutional Court (including its president), judges of the Supreme Court, Court of Auditors and High Military Court, the Attorney General of the Republic, governors and vice-governors of the provinces of the State, the governor of the National Bank of Angola. He is Commander-in-Chief of the Armed Forces.
Legislative Power
Angola has a unicameral legislative system. The parliament is called the National Assembly and has officially 223 seats. Its members are elected under a system of proportional representation by universal suffrage for a five-year term. In practice, the National Assembly has only 220 members. It is responsible for voting the law, granting the tax and controlling the activities of the government. However, the President of the Republic has significant legislative power, which renders the role of oversight of the Assembly's governmental activities ineffective.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Angola, please visit the Ministry of Health with the official data. Official information on the progress of the epidemic in Angola is consolidated by the official news agency ANGOP. The agency provides a daily epidemiological update, which includes key national figures.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Angola and the current sanitary measures in vigour, please consult the Angolan government platform, including the up-to-date information on the containment measures put in place and public health recommendations.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the Ministry of Finances.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Angola on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the information on the economic recovery scheme put in place by the Angolan government to address the impact of the COVID19 pandemic on the Angolan economy, please visit the website of the Ministry of Economy and Planning. The information on the Angolan economic emergency plan is available here.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Angolan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Angola in the IMF’s Policy Tracker platform.
Support plan for businesses
For the information on the local business support scheme established by the Angolan government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, please consult the portal of the Angolan Ministry of Economy and Planning.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters
To find out about the support plan for exporters put in place by the Angolan government, please consult the Presidential Decree on the government's official portal.
 

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