LUANDA, June 2, 2023 — Angola aims to accelerate economic diversification, private investment, and jobs by creating more favorable business conditions for micro, small and medium enterprises (MSMEs), with support from the World Bank. Approved this week by the World Bank Group Board of Directors, the $300 million Accelerating Economic Diversification and Job Creation Project will benefit an estimated 12,000 firms, creating direct and indirect jobs as a result of project activities, and help Angola transition from an oil-driven and state-led development model to a private sector-led model that is also inclusive and climate resilient.
Although Angola’s economic growth accelerated last year to about 3.1%, thanks to higher oil revenues and improved economic management, approximately one-third of Angola’s 34 million population live on less than $2.15 per day (2017 purchasing power parity), accounting for 11.7 million people in 2023. Angola’s economy does not create enough jobs for a young and increasing workforce, and informal employment is high. Women are at a disadvantage: compared to men, women have less paid employment (18% versus 31%) and earn half as much.
“This project will build on the government’s reform agenda and lay strong foundations for diversified growth that creates more and better paying jobs, particularly for women and youth,” said Juan Carlos Alvarez, World Bank Country Manager for Angola and Sao Tome and Principe. “It will help the Ministry of Economy and Planning in its endeavor to enable sustainable and inclusive growth by facilitating investment and trade, improving access to productive infrastructure, and broadening access to finance and technologies, including digital and management capabilities.”
The project aims to increase private investment and climate-resilient growth of MSMEs in non-oil value chains, particularly in the Lobito corridor which has the potential to play a central role in Angola’s economic diversification and transformation. The corridor, served by the Benguela rail line, runs 1,344 kilometers from the Lobito port to Luau, on the border with the Democratic Republic of Congo (DRC), and crosses four provinces (Benguela, Huambo, Bie, and Moxico) which are home to 8 million people or 25% of Angola’s population. These four provinces are important agriculture areas, with value chains in cereals (maize, soybeans, wheat, and rice), tubers, beans, vegetables, and fruits.
The government plans to partner with the private sector, develop linkages between economic agents along the corridor, and develop productive infrastructure to build value chains. The expansion of economic activity in the Lobito corridor offers an opportunity to develop quality logistics services that benefit agrobusinesses and help reduce post-harvest losses, improving food and nutrition security.