Angola scores low on human development indexes despite using its large oil reserves to rebuild since the end of a 27-year civil war in 2002. Fighting between the Popular Movement for the Liberation of Angola (MPLA), led by Jose Eduardo DOS SANTOS, and the National Union for the Total Independence of Angola (UNITA), led by Jonas SAVIMBI, followed independence from Portugal in 1975. Peace seemed imminent in 1992 when Angola held national elections, but fighting picked up again in 1993. Up to 1.5 million lives may have been lost - and 4 million people displaced - during the more than a quarter century of fighting. SAVIMBI's death in 2002 ended UNITA's insurgency and cemented the MPLA's hold on power. President DOS SANTOS pushed through a new constitution in 2010 and was elected to a five year term as president in 2012.
Southern Africa, bordering the South Atlantic Ocean, between Namibia and Democratic Republic of the Congo
petroleum, diamonds, iron ore, phosphates, copper, feldspar, gold, bauxite, uranium
Population - distribution
most people live in the western half of the country; urban areas account for the highest concentrations of people, particularly Luanda
Portuguese 71.2% (official), Umbundu 23%, Kikongo 8.2%, Kimbundu 7.8%, Chokwe 6.5%, Nhaneca 3.4%, Nganguela 3.1%, Fiote 2.4%, Kwanhama 2.3%, Muhumbi 2.1%, Luvale 1%, other 3.6%
LUANDA (capital) 5.506 million; Huambo 1.269 million (2015)
- Conventional long form
- Republic of Angola
- Conventional short form
- Local long form
- Republica de Angola
- Local short form
- Geographic coordinates
- 8 50 S, 13 13 E
- Time difference
- UTC+1 (6 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Angola's economy is overwhelmingly driven by its oil sector. Oil production and its supporting activities contribute about 50% of GDP, more than 70% of government revenue, and more than 90% of the country's exports. Diamonds contribute an additional 5% to exports. Subsistence agriculture provides the main livelihood for most of the people, but half of the country's food is still imported.
- External debt stocks
- US$ 27,991,041,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -10,272,841,903
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 29,289,391,478
- Exports of goods and services
- US$ 29,596,771,749
- Total Merchandise Trade
- FDI, net inflows
- US$ 9,282,167,512
- Commercial Service Exports
- US$ 1,256,163,318
bananas, sugarcane, coffee, sisal, corn, cotton, cassava (manioc, tapioca), tobacco, vegetables, plantains; livestock; forest products; fish
petroleum; diamonds, iron ore, phosphates, feldspar, bauxite, uranium, and gold; cement; basic metal products; fish processing; food processing, brewing, tobacco products, sugar; textiles; ship repair
- crude oil, diamonds, refined petroleum products, coffee, sisal, fish and fish products, timber, cotton
- China 44.5%, India 8.9%, US 7.8%, Spain 6.3%, France 4.5%, South Africa 4.2% (2015)
- machinery and electrical equipment, vehicles and spare parts; medicines, food, textiles, military goods
- China 22.4%, Portugal 14%, South Korea 11.2%, US 7%, UK 4.2%, France 4.1%, South Africa 4.1% (2015)
- Country Risk Rating
- A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high.
- Business Climate Rating
- The business environment is very difficult. Corporate financial information is rarely available and when available usually unreliable. The legal system makes debt collection very unpredictable. The institutional framework has very serious weaknesses. Intercompany transactions can thus be very difficult to manage in the highly risky environments rated D.
- Major oil producer
- Production of liquefied natural gas re-launched
- Significant economic potential: diamonds, copper, iron, gold, agriculture, and hydraulic resources
- International backing
- Vulnerability to oil price volatility
- High unemployment (26%), strong social inequalities and regional disparities
- Infrastructure shortcomings
- Fragile banking sector
- Political and economic control held by a concentrated elite
The oil sector, which accounts for almost 40% of GDP, is expected to continue as the main driver of Angolan growth in 2017. Higher oil production could effectively contribute to a slow recovery in activity, thanks to the Mafumeira Sul (Chevron), East Hub (ENI) and Kaombo (Total) projects. Activity in the hydrocarbons sector could also be buoyed by the production of liquefied natural gas (LNG), which restarted at the Soyo site in 2016, after a one-year suspension. The construction and real estate sectors are likely to continue to be hampered by a decline in public investment, while private investment will be constrained by the maintenance of high interest rates (16% in October 2016).
Inflation, which exceeded 39% in September 2016, looks set to remain high in 2017, continuing to affect household consumption. Inflationary tensions, pushed upwards by higher fuel prices, import restrictions on numerous products (mainly food) and the consequences of the depreciation of the kwanza, will endure. Another fall in the exchange rate against the dollar will intensify the rise in prices.
Angola, being highly dependent on China (destination for almost half its exports, main financial backer and major investor), could be hit by the slowdown in that country's economy.
Inflation reached historically high level in June (32%), mainly due to the impact of the kwanza's depreciation against the dollar and higher domestic fuel prices following the removal of fuel subsidies. The government’s decision to impose price limits on basic items and tight monetary policy (the Bank of Angola raised its interest rate from 14% to 16% end of June 2016) may moderate annual rise which is expected nevertheless to exceed 20%.
The 2017 draft budget presented by the government at the end of 2016 foresees a deficit of 6% of GDP, based on a relatively conservative oil price assumption ($46/barrel) and a growth forecast on the optimistic side of 2.1%. Revenues could be affected by less dynamic than expected activity, even if the resumption of hydrocarbon production (70% of budgetary revenue) is expected to prevent another sharp fall in government earnings. Current spending trends are likely to be kept under control so as to avoid deterioration in the public finances. Social spending cuts will, however, be curbed in view of the parliamentary elections in summer 2017. Moreover, the guarantees granted by the State to state-owned enterprises could put pressure on the budget, because of the poor financial position of some public entities, notably the oil company, Sonangol.
The public debt, about 60% of which is denominated in foreign currencies, has more than doubled since 2013 and is likely to continue to grow in 2017. As Angola renounced a loan of USD 4bn in June 2016, money it had previously requested from the IMF, financing conditions (especially Chinese) will be less concessional than those of that international institution, which is likely to lead to a further increase in the debt repayment burden. Uncertainties over the State's ability to meet its financial obligations threaten to worry investors.
With hydrocarbons representing over 95% of export income, the absence of another fall in the oil price together with increased production should help improve the current account balance in 2017, especially as weak domestic demand is likely to dampen imports.
Downward pressure on the exchange rate, which fell almost 20% against the dollar between January and end October 2016, could last and push the government to devalue the kwanza once again. The lack of foreign-currency liquidity and the economic slowdown is expected to continue to weigh on the banking system, itself highly dependent on the oil sector.
Since independence, the country has been led by José Eduardo dos Santos and his party (MPLA). The size of the opposition, although increasing, is still too small for a change to be considered. The next general elections are scheduled for 2017 and President Dos Santos (aged 73) has announced that he will step down in 2018, without presenting a plan for his succession. Given the political and economic hold the president and his party have, a chaotic succession could destabilize the country.
The president carried out a ministerial reshuffle in September 2016, replacing, in particular, his finance minister, in post for over three years. Beyond the tensions within his own camp, those between the MPLA and the main opposition party (UNITA) are expected to increase in the run-up to the elections. Meanwhile, popular discontent over inequalities and poverty, exacerbated by the economic slowdown and rising inflation, is intensifying the risk of social unrest.
Governance is a weak point of the country, due, in particular, to widespread corruption (Angola is ranked 201st out of 209 on the World Bank's Corruption Index).