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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 30 million (2018). 

Economic Overview 

For years, Angola’s economy suffered from the effects of lower oil prices and production levels despite significant progress on macroeconomic stability and structural reforms. Since 2015, the oil sector, which accounts for one third of gross domestic product (GDP) and roughly 95 percent of exports, had declined sharply. In 2020, as the COVID-19 pandemic hit, real GDP contracted by 5.5 percent, marking the fifth consecutive year of recession, with a total GDP decline of 9.9 percent.

In 2021, the Angolan economy showed signs of recovery and is estimated to have exited the long recessionary cycle with real GDP growth of 0.2 percent. The non-oil sector recovered, supported by the removal of COVID-19 related restrictions and the lagged impact of macroeconomic reforms. This offset a renewed contraction of the oil sector which declined despite higher oil prices.

The outlook for 2022 is favorable, especially due to the continued rise of oil prices and a temporary rise of production levels. As the transformation of a state-led and oil-funded economic model to a private-sector-led growth model is a complex and long-term process, the oil sector will continue to play an important role during the transition period. However, the continued government efforts to diversify the economy have been boosting non-oil sector growth.

Over the past years, macroeconomic stability has been safeguarded through a more flexible exchange rate regime, appropriate monetary policy, fiscal prudence, and debt reprofiling with major bilateral creditors. Key reforms delivered since 2017 include the Law on Preventing and Combating Money Laundering, the Fiscal Responsibility Law, and the Privatization Law. Financial regulation was enhanced by the approval of a new Financial Institutions Law in May 2021 which strengthens the resolution powers of the Banco Nacional de Angola (BNA) and includes enhanced corporate governance requirements. In addition, the BNA’s organic law was amended in 2021 to strengthen its autonomy. Moreover, a one-stop window for investors was set up to improve the business climate.

The BNA continued its efforts to keep the exchange rate flexible by allowing an increasing number of companies to sell foreign exchange directly to commercial banks. As a result, the exchange rate has appreciated by 23 percent year-on-year in February 2022. However, inflation has remained high, increasing to 27.3 percent in February 2022 compared to 24.9 percent a year prior, driven by import restrictions and supply side constraints related to the COVID-19 pandemic and rising global commodity prices.

Overall, Angola’s macroeconomic reforms are already producing some positive results as non-oil economic activity expanded before and after the COVID-19 shock, as indicated by the 41-percent growth in non-oil exports in 2021.

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.  

A proposal for a punctual review of the country's constitution is currently under discussion in parliament. Local election legislation and other laws will be on hold until the constitutional review process is concluded. 

Next Parliament and presidential elections are expected to take place in August, 2022.

Last Updated: Apr 07, 2022

LENDING

Angola: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments
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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
External Affairs Associate
Luanda, Angola
+244 222 393 389
For project-related issues and complaints