STORY HIGHLIGHTS
- The Angolan economy is gradually transitioning from an oil-based growth model to a diversified, resilient, and inclusive economic model.
- The Angola Country Economic Memorandum (CEM) analyzes the country’s economic growth over the past two decades and offers insights into its long-term potential.
- The aim is to identify the main challenges, opportunities, and policy reforms to accelerate the transition to a more resilient, inclusive, and sustainable growth path.
Angola has implemented a series of reforms to restore macroeconomic stability and promote economic diversification. Despite these efforts by the authorities, excessive dependence on the oil sector remains a key challenge. Oil accounts for approximately 30 percent of GDP, 65 percent of revenues, and more than 95 percent of goods exports, while the growth of the non-oil economy remains weak. In addition, oil price shocks have translated into macroeconomic instability and fiscal crisis, slowing down the real economy.
The Country Economic Memorandum: Moving Beyond Oil serves as a diagnostic tool to support Angola’s policymakers in advancing the economic diversification agenda outlined in the National Development Plan (NDP) 2023–2027 and the Long-Term Vision (Angola 2050). It identifies three main challenges:
- Macroeconomic instability from oil dependency and volatility – which has not helped develop a strong private sector and foster job creation.
- Low productivity across firms, due to a challenging business environment.
- Limited access to services like electricity, transport, and digital tools — and the low-level of human capital.
As a result, poverty and inequality are stubbornly high: Approximately one-third of Angolans live below the international poverty line (USD 2.15/ day), and economic inequality is substantial, as reflected by a Gini index of approximately 0.51. Additionally, Angola’s human capital index (HCI) of 0.36 is among the lowest in Sub-Saharan Africa. Unemployment has a significant impact on young people and women, with roughly one-third of the population unemployed. Moreover, approximately 80 percent of jobs are in the informal economy.
To address these challenges, the Country Economic Memorandum offers a roadmap toward a more sustainable and inclusive growth model, which makes better use of the country’s existing resources while also laying the foundation for future prosperity. It is built on three policy priorities:
- Pursuing macroeconomic stability by improving macro-fiscal management.
- Boosting productivity growth to create jobs.
- Expanding access to basic infrastructure and invest in human capital.
The development of the Lobito Corridor also offers a unique opportunity to accelerate economic transformation. With the right reforms, it could be a catalyst for diversifying Angola’s economy and connecting it to regional and global markets.
Economic growth could nearly double by 2050 if the country accelerated implementation of structural reforms targeting macroeconomic stability; boosting productivity growth; expanding physical and human capital endowments; and making use of its substantial agricultural potential.