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 33.08 million (2022).
In 2021, Angola exited its five-year recession, with GDP growing 0.8 %. The removal of COVID-19 related restrictions, the lagged impact of macroeconomic reforms, and the government’s efforts to diversify the economy boosted non-oil growth, especially in agriculture and services. This more than offset a renewed contraction of the oil sector, ending the country’s long recessionary cycle.
The positive economic momentum has continued into 2022, with the economy growing by 2.6 % year-on-year in the first quarter. Main drivers were an increase in oil production levels as well as continued strong performance of non-oil sectors. Mostly as a result of high oil prices, Angola experiences favorable macroeconomic conditions such as a high level of net international reserves, exports, and fiscal revenues, a strengthening currency, and declining public debt to GDP. Using this momentum, public spending picked up in the first quarter of 2022 compared to the first quarter of 2021, notably on goods and services and investments. This spending boost mostly benefited the education, social protection, housing, agriculture, and communication sectors as well as defense and security.
However, the scars of the COVID-19 shock and the lengthy recession – GDP declined by a cumulative 10.2 % between 2016 and 2020 – remain evident. Around a third of the population lives in poverty (less than US$ 2.15 per day as per the updated international poverty line), facing high unemployment and a rising cost of living. Food inflation remains high at 24% year-on-year in July 2022, though it is declining (from 31.6 % a year prior).
Economic growth is forecast to average around 3% over the coming years, with higher non-oil growth compensating for a structural decline of oil production. Given rapid population growth, per capita GDP is expected to remain fairly flat, presenting challenges to poverty reduction. This highlights the need to accelerate economic growth and promote inclusion by deepening reforms and making strategic investments in human capital, infrastructure, and the productive sectors of the economy.
Transforming the state-led and oil-funded economic model into a sustainable, inclusive, private-sector-led growth model requires high-level political commitment, strong coordination and communication capacity, and solid institutions. While much remains to be done to achieve this transformation, the Angolan government has taken important steps to safeguard macroeconomic stability and delivered on several key reforms. This includes a more flexible exchange rate regime, active debt management, the Law on Preventing and Combating Money Laundering, the Fiscal Responsibility Law, and the Privatization Law.
The authorities are also actively addressing financial sector vulnerabilities. In addition, the Banco Nacional de Angola’s organic law was amended in 2021 to strengthen its autonomy. A new payment system law and improvements in telecommunications regulation are expected to result in improved access to financial services including through mobile money.
Angola's fourth post-war elections were held on August 24, 2022 and the ruling MPLA (Popular Movement for the Liberation of Angola) party won with 51% of the vote. UNITA (Union for the Total Independence of Angola), the main opposition party, secured 44% of the votes, its best results ever. The results confirmed a second and final term for President João Lourenço.
Overall, the opposition won 96 seats, up from 70 in the 2017 elections. The New government comprises 23 ministers and 3 ministers of State.
Last Updated: Sep 13, 2022