Population 27.4 million
GDP 3,485 US$
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major macro economic indicators

  2015 2016(e) 2017(e) 2018(f)
GDP growth (%) 0.9 -2.6 -2.5 1.9
Inflation (yearly average, %) 10.2 32.1 32.0 20.3
Budget balance (% GDP) -3.3 -6.0 -6.1 -5.5
Current account balance (% GDP) -10.0 -6.4 -5.2 -4.5
Public debt (% GDP) 64.64 79.8 65.0 73.0


(e): estimated (f): forecast


  • Significant oil production
  • Launch of liquefied natural gas production facilities
  • Significant economic potential: diamond, iron, gold, leather, agriculture, fishing, hydropower
  • International financial support


  • vulnerability to the reversal of oil prices
  • High unemployment (26%), strong social inequalities and regional disparities
  • Infrastructure deficiency
  • Fragile banking sector
  • Control of politics and economy by a small elite
  • Conflict with the separatists of the Cabinda enclave


Increased oil production supports a constrained rebound

Negatively impacted by the strong inflation and the political uncertainty prior to August 2017 elections, growth remained negative in 2017. In 2018, it should turn back into positive territories thanks to the commissioning of the Kaombo oil field (Total) in the summer. Oil sales, which account for more than 90% of export earnings, could benefit from higher oil prices. However, the dynamics of Chinese demand, in a context of a slowing economy is a risk. Investment in expensive offshore projects is expected to stagnate as oil operators limit their spending on the development of new ones since the fall of prices in 2014. Outside the oil sector, growth prospects remain weak. The budgetary imbalance should restrict public investment, particularly in the construction sector, despite the infrastructure projects that will be presented in the 2018-2022 National Development Plan currently being drafted. Excluding oil, the difficult business climate and corruption remain obstacles to increased foreign investment flows. The new private investment law, adopted in May 2018, should, nonetheless, help supporting such flows. The pre-requisite of domestic partnership for foreign investors was abolished and taxes were reduced in target areas, both measures increasing the country’s attractiveness.  An increase in the minimum wage decided in mid-2017, the first such increase since 2014, will not support household consumption in 2018. In fact, while its decline is expected to continue in in the rest of the year 2018, inflation will remain high and thus continue to undermine household income. Moreover, while the Angolan external position remains precarious, price developments will remain vulnerable to a further depreciation of the local currency (kwanza) in 2018.


Budgetary and external imbalances still a threat

In 2018, fiscal consolidation efforts are expected to be stepped up. Progress in mobilizing non-oil revenue will be a priority. In particular, the increase of several consumption taxes and a review of tax exemptions are planned. However, the improvement in revenues should remain dependent on oil revenues (70% of revenues). Expected to increase in 2018 thanks to higher prices and increased production, these revenues would allow the government to regain a little more breathing room. The deteriorating financial situation of some public entities and the banking system will continue to weigh on the budget, while debt service is becoming increasingly important. This increase is related to the rapid rise in the debt burden. The greater weight of debt servicing is due to the rise in the deficit and the sharp devaluation of the kwanza (since the peg to the dollar was abandoned in January 2018). The debt – which is often on non-concessional terms – is 78% denominated in foreign currencies and public debt in percentage of GDP should considerably increase in 2018. The government intends to increase the share of local debt (mainly in kwanza) to finance the deficit.

The current deficit is expected to continue to decline in 2018, in line with the price of black gold. However, the surplus in the balance of goods will still be too small to compensate for deficits in services and income. With FDI and portfolio investment still weak, the external situation will remain extremely fragile, forcing the country to finance itself from external debt. Since the decision of the National Bank of Angola’s (NBA) to make the kwanza more flexible to curb the depletion of its foreign exchange reserves, the currency has lost a quarter of its value before stabilising. The difference between the official exchange rate and the parallel rate still indicates, however, a possibility of further depreciation.


Changing faces in the leadership of Angola

Unsurprisingly, the People's Liberation Movement of Angola (MPLA) won the August 2017 general election. However, after serving as leader of the country for 38 years, José Eduardo dos Santos (73), who remains president of the MPLA, gave up his seat to his former defence minister João Lourenço. Anxious to assert his authority, the new president made a name for himself by making several changes at the head of the state media, the BNA and national diamond companies (Endiama, Sodiam). One of the most notable changes is the ousting of Isabel dos Santos, daughter of the former president, as the head of the state-owned oil company (Sonangol). Nevertheless, despite these changes, the president's ability to implement economic and social reforms will be scrutinized. Indeed, the discontent of the population persists in the face of inequality and poverty, exacerbated by slow economic activity and inflation. The new president's focus on fighting corruption, improving governance and the business climate will need to be followed by reforms to unblock private investment. Although progress in electricity supply and the obtaining of building permits has allowed Angola to move up seven spots in the latest Doing Business 2018 ranking, the country remains at the bottom at both the regional and global level (175th out of 190); proof of a business climate that remains poor.

Relations with Congo (Kinshasa) may be tense after violence in the Kasai region has led to the influx of more than 30,000 refugees into Angola.


Last update : June 2018

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