The Republic of ANGOLA : Economic Perspectives

Former Portuguese colony, Angola’s independence was proclaimed on November 11th, 1975, but Angola only found peace in 2002 after :
• 13 years of war of independence
• 27 years of East-West civil war in the context of “cold war”

The repercussions of the war were considerable :
• Enormous reduction of the agricultural activity of the country
• Massive destruction of its industry sector
• Influx of rural people towards the cities, in particular, the capital Lunda which currently
hosts a quarter of the population of the country.

Following the civil war, driven by its oil wealth, Angola has posted one of the highest economic growth rates in the world. But in 2020 the country experience a sixth year of recession, hit by the Covid-19 pandemic, collapsing oil prices and production restrictions (OPEC+ deal).

The IMF expects the country’s economy to recover by 2.4% of GDP in 2022 after two precedent years of slowdown.

In 2020, the supply and demand shocks induced by the Covid-19 crisis affected the oil sector, mining production, transport and services, hard hit by the lockdowns :

  • The Primary Sector employs 50.7% of the working population and only contributes to 9.4% of GDP. The sector is undeveloped and unproductive : only a third of the country’s arable land is used for subsistence farming. The main crops are coffee and cotton. 
  • While it employs only 6.8% of the working population, the Secondary Sector, mainly based on oil and gas, contributes up to 44.8% of GDP. Angola is the second largest oil producer, a net producer of natural gas and the third largest diamond producer behind Botswana and Democratic Republic of Congo : more than 70% of government revenue and 90% of Angola’s exports come from oil activities.  
  • The Tertiary Sector employs 42.5% of the working population and contributes to 41.4% in the breakdown of GDP. 

With more than 31 million inhabitants, the 12th most populous country in Africa, Angola, is the continent’s 6th economy behind Algeria and Morocco, with an estimated GDP around US$ 70.34 Billion in 2021. However, social situation in Angola remains tense :

• Only a third of the population has access to electricity
• Poverty is more widespread in rural areas (58%) than in urban areas (19%)
• Unemployment rate is estimated at 28% and remains high among young people in urban areas (38%)

Population (2020 UN)32.51 million inhabitants
GDP / Capita USD (2021, IMF)USD 10.0
HDI (2020, UNDP)79th over 190
Doing Business (2020 World Bank rank) 75th over 190
Corruption Perceptions Index 202136h over 180
Unemployment rate (FMI 2021)9.7%

Angola is one of the African countries best endowed with soil and subsoil resources :
• The second Sub-Saharan oil producer with 1.4 Mb per day. Its gas reserves are little exploited and estimated at 300 Billion m3.
• The 4th producer of diamonds in the world. The country has large reserves of diamonds at the Catoca mine, as well as a few Iron, Copper and Gold mines.
• Is covered by 70 M ha of the Tropical forest of which 2.4 M ha are considered productive.
• Is equipped with significant water and hydroelectric resources, in particular thanks to the Cambambe, Capanda and Lauca dams on the Kwanza river.

On a Demographic point on view, Angola is the 12th most populated African country with a population estimated to be more than 31 million inhabitants. The infant mortality rate is one of the highest in the world (51.6% in 2018) and the HDI index is very low (149 rank / 189 countries in 2019). Growth rate is at 4.10% with life expectancy at birth is 61 years.

On a Political point on view, since independence, the country has been led by the Popular Movement for the Liberation of Angola (PMLA). Last national elections held on August 2017 took place in a peaceful climate led to the election of President João Lourenço (former Minister of Defense). The newly established reform program undertook by the President is based on 4 axes :
• Less economic centralization
• Greater openness towards new partners
• Fight against corruption and nepotism
• Economic diversification
• Enterprise privatization

On an Economical point of view, Angola is a rich country but very inequal. The capital Luanda accounts for almost 65% of GDP and it is facing major urbanisation problems. Angola belongs to both Southern Africa (member of Southern Africa Development Community SADC : 16 States) and to the Equatorial Africa zone (also a member of Economic Community of Central African States ECCAS : 11 States). Due to budget cuts the budget balance deterioration was limited to a deficit of -0.5% of GDP in 2020. The priority of the government remains the stabilisation of public finance which is estimated to generate a budget surplus of 2% in 2021 and 2022. On the opposite, public debt has has climbed to 136.5% of GDP in 2020 fueled by Kwanza depreciation and lower oil prices and is expected to slightly decrease at 103.7% of GDP (2022) and 90.8% of GDP (2023). Inflation rose from 17.1% in 2019 to 22.3% in 2020, climbing again at 24.4 before declining to 14.9% in 2022.

Economic Indicators201920202021e2022e 2023e
GDP ($ Billion current price)230.87205.46225.86231.69246.72
GDP growth (%)2.2-
Inflation rate (%)
Public debt (% GDP)
Current balance (% GDP)-

The Central Bank of Angola (BNA)

The central bank is tackling inflationary pressures by tightening monetary policy. The fragile banking sector is being restructured : the two ailing public banks are still being restructured. In 2016, Angola experienced a drastic drop-in tax revenue, forcing the authorities to cut spending budget by a third. Foreign exchange reserves were then used to defend fixed exchange rate are currently at a floor amount of US$ 10 Millions. Between January 2015 and October 2019, the country’s currency devaluated by 370% against the dollar. The devaluation combined with the collapse of tax revenues caused national debt soar and exceed 90% of GDP. The 1.4 million barrels per day production is not enough to reduce the deficit. The BNA tax sets at 20%.

Focus on Angola’s Exports and Imports

In 2019, South Africa was the 65th economy in the world in terms of GDP (current USD) (63th in the total exports and 107th in total imports). The country exported USD 32.9 Billion and imported USD 9.52 Billion, resulting in a positive trade balance of USD 23.38 Billion

The top exports of Angola are Crude Petroleum  ($28.5B), Diamonds ($1.78B), Petroleum Gas ($1.7B), Refined Petroleum ($375M) and Passenger and Cargo Ships ($120M). Angola exports mostly to China ($20.5B), India ($3.37B), United Arab Emirates ($1.29B), Portugal ($1.07B), and Spain ($957M).

The top imports are Refined Petroleum ($596M), Scrap Vessels ($566M), Poultry Meat ($262M), Rice ($193M) and Palm Oil ($162M). It imports mostly from China ($2.06B), Portugal ($1.39B), Nigeria ($566M), Belgium ($551M), and United States ($513M). 


To sum up, Angola is a country with a rich unexploited soil and where the political atmosphere is still highly linked to corruption. Lunda, once the most expensive capital in the world, has become one of the most toxic economies, where every road, tower, bank, petrol station or hypermarket is linked to images from the former regime of José Eduardo Dos Santos : a regime whose billionaires did not create jobs. But the new government is implementing many reforms to reduce the influence of the Dos Santos family on the economy, improve the perception of the business climate and lead the country out of the crisis.



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