Angola

Angola has a land mass of 1,247 million km² and a coastline of 1,650km that stretches from the mouth of the Congo River in the north to the mouth of the Cunene River in the south, and is bordered by Namibia to the south and the Democratic Republic of Congo to the north. It includes the northern enclave of Cabinda.

It has a population of 39.3 million and GDP of US$113.7bn which is expected to grow by 3.0% in 2025. Government debt has reduced from 71.4% of GDP in 2023 to 63.3% in 2025. Its currency is the Angolan Kwanza.

The country was a Portuguese colony before independence in 1975, which led to a ruinous civil war from 1975 to 2002 between the ruling People\'s Movement for the Liberation of Angola (MPLA) and the rebel movement Unita, supported by the South African apartheid government and the US. Angola maintained political stability since 2002 under the corrupt administration of former president José Eduardo dos Santos, who stepped down in 2017 after 38 years in power. He was succeeded by the former minister of defence João Lourenço.

The oil sector accounts for between 35% and 45% of GDP and more than 90% of exports, with the Cabinda province on the north coast accounting for about 60% of Angola\'s oil production, the bulk of which comes from offshore reserves. Angola is also Africa’s third-largest diamond producer.

Inflation remained elevated driven by exchange rate pressures and higher food prices. The central bank raised monetary policy rate by 150 bps in 2024 and streamlined liquidity management, resulting in a better alignment of the interbank rate with the policy rate. The currency depreciated by over 10 percent against the U.S. dollar in 2024. Adverse market expectations and a high external debt service continue to weigh on the exchange rate. The government\'s active cash and debt management helped mitigate liquidity pressures.

The recovery is expected to continue but risks to the outlook remain high. Growth is expected to remain at 3 percent in 2025 while inflation is projected to ease with the fading of cost-push factors. The resolution of maintenance bottlenecks in key extraction blocks and government-led efforts to incentivize production should help sustain oil production. However, high external debt service constrains development spending, and oil dependence remains a drag on sustainable growth. Liquidity risk could intensify should financing conditions deteriorate, further crowding out social spending, and exerting pressures on the exchange rate.With presidential elections scheduled for 2027, an early start of the political cycle risks slowing down the implementation of economic reforms.

Economic diversification remains elusive as oil production declines and global decarbonization looms in the medium term. The agriculture sector has grown faster than the economy for four consecutive years, and several indigenous private sector companies have diversified their portfolio from oil services and construction into agro-processing.

Angola’s economic fortunes have been tied to global oil demand, which brought volatile growth and left the country with high levels of poverty and inequality. Reforms over the past five years have improved macroeconomic management and public sector governance. Macroeconomic stability has been enhanced through a more flexible exchange rate regime, central bank autonomy, sound monetary policy, and fiscal consolidation.

The Angolan National Petroleum and Gas Agency has increased transparency in sector management and regulation, removing conflicts of interest and developing and attracting investment. Since the new agency was set up in 2019, the state oil company Sonangol no longer holds exclusive rights for the prospecting, research and production of oil and gas.

Recently the Angolan government has introduced several reforms to liberalise the petroleum sector to encourage more oil exploration and the development of a downstream oil sector. The liberalisation of the downstream oil and gas sector is likely to provide a number of opportunities for small and medium-sized businesses in terms of the distribution and retail of petrol and gas. Among these, there could be opportunities for small operators to run fuel stations.

Angola has the natural resources to become one of Africa\'s leading agricultural countries, as the diverse and fertile region is suited to a variety of crops. It also has an abundance of fresh water and arable land, and international landmine clearing efforts have opened up extensive areas of land for farming.

The Southern African Development Community (SADC) is a regional economic community made up of 16 member states – Angola, Botswana, the Comoros, the Democratic Republic of Congo (DRC), Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia and Zimbabwe.
Exploration for lithium is carried out in Angola, Cameroon, Côte d’Ivoire, Madagascar, Mozambique, Rwanda and Tanzania.


Sources: Who Owns Whom sector reports, CIA Factbook, African Development Bank, World Bank, Trading Economics, African Statistical Yearbook and IMF. ?>