The World Bank in Angola

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). 

Economic Overview 

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.

Political Context 

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

While a new Country Partnership Framework (CPF) is planned for FY23-28, the overarching strategy of the World Bank Group‘s current support activities in Angola focus on pillars within the previous CPF, focusing on   promotion of more inclusive development, consisting of two core objectives (pillars) and one foundation plank of a cross-cutting nature.

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 CPF 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 nine existing investment projects (net commitment of $1.8 billion) with International Bank for Reconstruction and Development (IBRD) financing, and the three current Reimbursable Advisory Services (RAS). 

Last Updated: Sep 13, 2022

Health

The Health System Performance Strengthening Project (HSPSP) is targeting assistance to more than 200,000 people in five municipalities and has so far achieved the following in response to the COVID-19 pandemic:

• $15 million was made available for urgent and immediate health sector response, and supported World Bank technical assistance in conducting a quantification of COVID-19 needs, serving as the basis to outline areas of need, inform procurement, and help coordinate donor support.
• Purchased personal protective equipment, bio-safety and diagnostic materials, and operationalized the logistical response, including contact-tracing and field-based training.
• Assisted national COVID-19 immunization coverage in relation to the target population over 12 years of age, estimated at 18,932,660 people. Immunization rates achieved: 75% with the first dose (14,233,499 people immunized), and 41% with the complete primary series of 7,823,366 people immunized). 1,132,822 booster doses were also administered, totaling 22,322,578 doses administered.S

Social Protection

The Social Protection Strengthening Program is at a crucial stage with four components: Cash Transfer, Productive Inclusion, Municipalization of the Social Action, and Unified Social Registry.

• With a target aim to benefit 1.6 million poor and vulnerable families by the end of 2022, the Cash Transfer component of the project has already registered more than 82,9475 households across the country. As of August 30th, 2022, more than 588,000 households have received cash payments. More than 62% of beneficiaries are women.
• Productive inclusion has been implemented in 9 provinces and 10 municipalities, the main lines of work including agriculture, honey production, animal husbandry, community saving schemes, and product processing. This has benefited more than 17,000 direct beneficiaries and 84,000 indirect beneficiaries in economic and productive initiatives focusing on agriculture, fishing, animal husbandry, honey production, sewing, motorcycle taxi, community saving schemes, product transformation and handcrafts. 
• The Municipalization of the Social Action component has trained 534 local technicians and built 25 Integrated Social Action Centers. The following services were delivered in the three centers:
  • 18,000 people got their first birth certificate and received their identity documents;
  • 981 grievance redress cases on the project have been submitted;
  • 953 people attended workshops on COVID-19 and child protection;
  • 32 cases of family conflict resolutions were mediated.

Water 

The first phase of the Water Sector Institutional Development Program (WSIDP), also known as PDISA has supported the creation and strengthening of six new water supply utilities that are providing household services to more than 800,000 new customers. 1,000 km of network was installed in Uige, Malanje, Ndalatando, Huambo, Kuito, Lubango, and Luena. The utilities financial and operational performance has improved significantly and a new regulator and a new water resources management institution have been created.

A second generation of the project, WSIDP2 ($350 million), is now effective and will scale up the infrastructure activities, provide increased institutional strengthening and incorporate sanitation activities. WSIDP2 also secured funds from the Agence Française de Développement ($150 million) and the European Investment Bank ($100 million).

Social and Economic Infrastructure 

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 Local Development Project (PDL), is in its fourth phase, providing 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.

Agriculture 

The 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 has also strengthened farmers’ organizations and helped create 725 farmers’ field schools. These helped train more than 50,0000 smallholder famers to boost the production of the major crops targeted by the project.

Last Updated: Sep 13, 2022

The World Bank Group continues to leverage its support by working closely with 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 United Nations agencies (UNDP, UNICEF, the World Health Organization, UNFPA, FAO), the African Development Bank, the European Commission, USAID, the French Development Agency, as well as the oil sector companies on innovative cooperation opportunities. 

Last Updated: Sep 13, 2022