Overview

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Context
Strategy
Results
Partners

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
President João Lourenço of the People’s Movement for the Liberation of Angola (MPLA) party, took power in September 2017, after winning 61.7% of the vote and an absolute majority of the legislature. Since then, the government has devalued the currency, tightened monetary policy, and resumed fiscal consolidation, as well as took the first steps to reform public utilities and fuels prices, reduce subsidies, and privatize or liquidate some state-owned companies. Two new laws that are essential to the competitiveness of the country have been approved: the private investment law and the antitrust law, which remove formal barriers to entry in the Angolan market.
Angola is moving gradually towards a more market-based, floating exchange rate regime with a nominal monetary anchor. The National Bank (BNA) promoted a large currency devaluation in the turn of the year, and has been promoting small monthly devaluations since then. It has eased currency controls, increased transparency in foreign exchange allocations through regular auctions and improved communication, in a move towards a more market-based and floating exchange rate regime. The local currency has devalued by 56.7% in relation to the US dollar from January to mid-2018.
Inflation decelerated to 20.2% in June 2018 as opposed to 26.3% in the end-2017, despite the currency devaluation.
External accounts are poised to improve on the back of higher oil prices and the exchange rate realignment. Angola external accounts went quickly from surplus to deficit due to the large drop in oil prices. The external deficit was reduced initially by currency control and import repression, but as the currency is devaluing and the oil prices are increasing, the real exchange overvaluation is being reduced.
Expenditures have been significantly reduced, but budget deficits were inevitable due to the even larger drop in revenues. Budget deficit decreased from 2014 (6.6% of gross domestic product (GDP) to 2015 (3.3% of GDP), but grew back again in 2016 and 2017, reaching 5.3% of GDP as a result of the slowdown in fiscal consolidation. Despite the increase in budget deficit, expenditures were substantially cut and maintained at low levels.
The largest expenditure cuts were to public investments and subsidies. For 2018, the budget foresees fiscal consolidation to rely on payroll and investment cuts. Both oil and non-oil revenues declined more acutely than expenditures and they are partially responsible for the slowdown in fiscal consolidation. Oil revenues went down from 23.8% of GDP in 2014 to 8.2% of GDP in 2016, but they have seen a small rebound in recent years and are expected to reach 10.1%of GDP in the 2018 budget.
Non-oil revenues went down, despite tax policy and administration measures to improve tax collection, reflecting the economic slowdown. Non-oil revenues declined from 9.1% of GDP in 2014 to 6.8%of GDP in 2017, but a small increase to 7.3% of GDP is expected in the 2018 budget.
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.
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.

Last Updated: Aug 27, 2018
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.

Last Updated: Aug 27, 2018
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 (US$24m),). The RAPP pre-test was successfully implemented in early July 2017 and the main data collection took place during February-May 2018. Census results dissemination are expected for December 2018.
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.

Last Updated: Aug 27, 2018
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 as well as the oil sector companies on innovative cooperation opportunities.

Last Updated: Aug 27, 2018