Overview

  • A vast country with a long coastline and central plateau, Angola thrusts inland across Southern Africa to border Namibia, Botswana, Zambia, and the Democratic Republic of the Congo. Its principal cities, including its capital, Luanda, look west over the South Atlantic to Brazil, another Portuguese-speaking nation (like itself). It has a population of more than 28.8 million (2016).

    Economic Overview

    The new administration of President João Lourenço, which took power after the 2017 general elections, has embraced reforms on several fronts to achieve macroeconomic stability and create a favorable environment for economic growth. After devaluing the currency, the government took further steps toward a more transparent and market-based foreign exchange market. Monetary policy remained tight and a substantial budget surplus was achieved in 2018. The new macroeconomic framework is being supported by a three-year International Monetary Fund Extended Financial Facility (EFF) in the amount of $3.8 billion, with an immediate disbursement of $990.7 million.

    The government has also made progress in the implementation of more structural reforms. Two new laws that are essential to enhance private sector-led growth and competitiveness have been approved: the private investment law and the antitrust law, followed by the creation of a competition authority. The government took first steps to reform public utilities, utility tariffs and subsidies, and to privatize or liquidate some state-owned companies by creating IGAPE – the statement of expenditure surveillance unit – raising energy and water tariffs and creating regulatory agencies for fuel and oil.

    Despite significant progress on macroeconomic stability and structural reforms, Angola is still suffering the effects of lower oil prices and production levels, with an estimated gross domestic product (GDP) contraction around 1.5% in 2018. The oil sector still accounts for one third of GDP and more than 90% of exports. Economic growth is expected to remain subdued in 2019 because of a lower oil price forecast and the oil production cap set by the OPEC agreement.

    Higher oil revenues and fiscal consolidation resulted in an estimated budget surplus of 4.8% of GDP in 2018, the first surplus since 2013. The budget proposal for 2019 maintains the focus on fiscal consolidation and will be revised to take into consideration the recent decline in the oil price. Public debt has increased on the back of the currency depreciation and larger financing needs, reaching 85%  of GDP at end-2018. Angola will have to maintain gradual fiscal consolidation, improve revenue mobilization and implement strong reforms in public financial management practices to put public debt on a sustainable path.

    Exchange rate misalignments were reduced in 2018 with greater exchange rate flexibility. Exchange rate misalignment and depleting foreign reserves prompted the National Bank of Angola (BNA) to abandon the fixed peg to the U.S. dollar and ease currency controls in January 2018. The kwanza has depreciated by 47% in nominal terms against the U.S. dollar between January 2018 and 2019. With greater exchange rate flexibility, the parallel-official exchange rate spread has decreased significantly and is fluctuating around 30%, compared to 140% at the beginning of the year. Gross international reserves reached $16.7bn in January 2019, covering close to six months of next year’s imports.

    The Central Bank adopted a restrictive monetary policy to anchor inflation and to offset the impact of the exchange rate devaluation. Inflation declined from 22.7% to 18.2% year-over-year in January 2019 due to tight monetary and fiscal conditions, however anticipated utility and fuel price subsidy reforms are expected to increase prices level in the short term.

    Financial sector vulnerabilities have been rising with the economic slowdown, and financial soundness indicators show a mixed performance. Some banks faced liquidity challenges in 2018 due to tight monetary policy and exchange rate depreciation. The BNA has implemented policies to address financial sector vulnerabilities, including a threefold increase in the minimum share capital requirement for banks. In the beginning of 2019, the BNA has ordered the closure of three commercial banks for failing to meet the new minimum capital requirements.

    Political Context

    Angola has maintained political stability since the end of the 27-year civil war in 2002. In 2010, a constitution established a presidential parliamentary system with the president no longer elected by direct popular vote but instead as the head of the party winning the most seats. The 2010 Constitution sets a limit of two, five-year presidential terms. The country’s first local elections are planned for 2020.

    Internationally, Angola is becoming more assertive and demonstrating a more steadfast commitment to peace and stability in Africa, particularly in the Great Lakes region where Angola has secured a commitment to economic and political sanctions against the region’s armed rebel groups.

    Development Challenges

    Angola has made substantial economic and political progress since the end of the war in 2002. However, the country continues to face massive development challenges, which include reducing its dependency on oil and diversifying the economy; rebuilding its infrastructure; and improving institutional capacity, governance, public financial management systems, human development indicators, and the living conditions of the population.

    Large pockets of the population live in poverty without adequate access to basic services, and the country could benefit from more inclusive development policies.

    lastupdated: Mar 28, 2019

  • World Bank Group Commitment to Angola

    World Bank Group (WBG) activities in Angola are undertaken as part of the Country Partnership Framework (CPF) for 2014-2016 and which were extended through 2018. The overarching strategy of the CPF is the promotion of more inclusive development, and it consists of two core objectives (pillars), and one foundation plank possessing a cross-cutting nature. The pillars and foundation are as follows:

    • Pillar I focuses on supporting integrated national economic diversification by revitalizing rural economies to create greater competitiveness and employment. The focus is on the strengthening of the non-oil economy, with an emphasis on rehabilitating traditional lines of business that suffered greatly during the war, as well as technical assistance for the energy sector.
    • Pillar II focuses on enhancing the quality of service delivery and instituting a strong social protection program to improve the quality of life of the population and equip individuals to take a greater role in the development of the country.
    • The Foundation Plank of the CPS revolves around building human and institutional capacity to approach the levels common in middle-income countries, complementing the two strategic pillars.

    These objectives will be achieved during the CPF period through stronger attention to quality and implementation of the seven existing projects with International Development Association (IDA), and International Bank for Reconstruction and Development (IBRD) financing, and the three current Reimbursable Advisory Services (RAS).

    The current World Bank portfolio is comprised of nine investment projects (IDA/IBRD) with a total net commitment of nearly $1.05 billion dollars.

    lastupdated: Mar 28, 2019

  • The World Bank (WB) has successfully contributed to Angola’s development by providing support in the following areas:
    The Angola Social Action Fund, commonly known as “Fundo de Apoio Social” (FAS), has been the main World Bank Group (WBG) support program that contributes to promoting decentralization. The project, which has improved poor communities’ access to basic social and economic infrastructure and provision of services, has been in implementation in various phases since 1994. The project, now called the Local Development Project (PDL), is in its fourth phase, including a recently approved International Bank of Reconstruction and Development (IBRD) Additional Financing. The project provides direct financial support and capacity development assistance to poor communities, complementing the government’s efforts in the decentralization process. During the third phase of the project, 1,575 pieces of community infrastructure were constructed and rehabilitated in all 18 provinces of the country, enabling about 2.3 million Angolans to gain access to basic social and economic services. Mechanisms and practices for participatory governance systems have been established, in which local governments are increasingly more accountable to their constituencies. About 7,200 individuals have benefited from the project’s capacity development activities, half of whom received formal training.

    StatCap Project: To improve data for poverty measurement and better allocation of resources for social programs, the WBG started the Statcap Project in May 26, 2017, which aims to enhance statistical capacity. The project includes the Agriculture Monitoring System [RAPP-Agriculture Census and follow-up surveys ($24m),). The RAPP pre-test was successfully implemented in early July 2017 and the main data collection is underway in four provinces. The census is to be carried out in the remaining 14 provinces in May and June. 

    Market Oriented Smallholder Agriculture Development Project (MOSAP)Supports beneficiaries by providing training and new technologies, improving their organizational and marketing skills, and improving their access to extension services and agricultural inputs. It also supported strengthening the farmers’ organizations. About 725 farmers’ field schools were created by the project and helped train more than 50,0000 smallholder famers to boost the production of the major crops targeted by the project.

    Learning for All Project: envisages improving teacher’s skills and knowledge as well as school management in Project-designated areas. The project also envisages to develop a system for systematic student assessment. 

    The project has established 167 pedagogical influencing zones (ZIP) in the project implementation areas. ZIP model creates a school network in which schools share and collaborate with each other in their day-to-day work to deliver high quality education. Each ZIP comprises six to seven primary schools which are within a radio not exceeding 10 kilometers and are led by a coordinator who has been trained by the project to act as trainer of trainers.

    The project has thus far established 167 ZIPs and has covered four out of the six modules planned for the training program. In these modules, a total of nearly 15000 teachers have been trained on methodology of teaching Portuguese language, mathematics, pedagogical supervision, assessment in the classroom and pedagogical differentiation. 

    lastupdated: Mar 28, 2019

  • The WBG continues to leverage its support by working closely with other key stakeholders. This entails closer collaboration with other development partners, the private sector, civil society organizations (CSOs), academia, and think tanks. Some of the institution’s traditional partners include UN agencies (UNDP, UNICEF, WHO, UNFPA), the African Development Bank, the European Commission, USAID, The French Development Agency, as well as the oil sector companies on innovative cooperation opportunities.

    lastupdated: Mar 28, 2019

Api


PROJECTS_LENDING

Angola: commitment_amount_chart

commitment_amount_ibrd


PHOTO GALLERY

More Photos Arrow

In Depth

Digital Revolution = Growth

While fragility is holding back economic growth, the latest Africa’s Pulse says that digital transformation is the way forward.

Monitoring Progress in Policy

In Five Charts: Understanding the Africa Country Policy and Institutional Assessment report for 2017.

IDA in Africa

With help from IDA, between 2012 and 2015, the share of people living on less than $1.90/day dropped from 43% to 35%.

World Bank Africa Multimedia

Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business in Angola

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
Domo Business Center, 86, 7th Floor. Av. Lenin
Ingombotas
Luanda, Angola
+244-222-394677
For general information and inquiries
Wilson Mbanino Piassa
Communications Associate
Luanda, Angola
+244 222 393 389
wpiassa@worldbank.org
For project-related issues and complaints
angola_alert@worldbank.org