The Angolan economy is among the world’s most growing, following the consolidation of the political stability.
Angola has been guaranteeing the national reconstruction and setting steady steps towards the macro-economic stability and development of the basis for a strong economic development.
The political stability and investments in the rehabilitation and modernisation of the productive infrastructures have been leading to a major flow of goods and people, increase of local and foreign private investment and alteration to the basic structures of the economy.
After the period of hyper-inflation of 1996 that reached an accumulated rate of 3,000 percent, Angola is recording over the last few years an inflation of about 10 percent (12,2 percent in 2006, 11,79 in 2007 and 12,8 in 2008).
In accordance with the Report of Execution of the General Program of the Government, between 2002 and 2006, Gross domestic product (GDP) grew 89.6% and the annual accumulated rate of inflation in December of the year of 2007 was 12,20%, less 6,3 perceptual points than in 2005. The unemployment rate recovered 4% in comparison with 2005.
The increasing in the internal production of mercantile goods and services, with particular incidence in the sectors of agriculture and industry (mining and oil) surpassed the forecasts for the year 2006.
In 2006, the diamond-producing sector registered a growth of 30,9% against 16.2% verified in 2005, while the petroliferous industry, according to fuel concessionaire of Angola (Sonangol), invested 48,9 billions American dollars since 1976 until the first semester of the year 2007.
In accordance to Sonangol, in next the four years (2008 to 2011), the oil industry will spend 66 billions dollars of which 51.6 billions in projects of deep and extreme-deep waters and in the new tablets bided in 2006 and 2007.
Angola is positioning itself, gradually, as the greatest “black gold” producer in Africa, being currently the second supplier of China, after Saudi Arabia, and the seventh of United States of America.
In 2008, the National bank of Angola reveled that the bank credit in national currency grew around 60.7%, in real terms, and the credit in foreign currency had a 42.2% evolution. The liquid international reservations are evaluated in 11 billion American dollars, after having reached in 2006, 8 billion American dollars.
The national currency (Kwanza) has been stable, playing more effectively its role as a trade and reserve value.
The rollback to the negotiations with the creditors of the Paris Club contributes also to improve the image of Angola. After 15 years without fulfilling its responsibilities, at the end of the year of 2006 and in the first trimester of 2007, the late debt (capital and interests) with the creditors of the Paris Club was liquidated, in the amount of 2.3 billions American dollars.
The advances reached in the internal economic scene reverberated in the country position in the exterior. Several entrepreneurial missions, namely from Germany, Canada, Holland, Japan, Portugal, Sweden and other countries, have been in Angola with the objective of exploring the market.
The growth is fundamental that Angola continues with its poverty and famine fight programme, through the main projects of rehabilitation of infrastructures and foment to the productive activity, coupled with institutional reforms.
Angola has an abundance natural resources particularly petroleum and diamonds, as well as iron, manganese, copper, phosphate, granite and marble.
The main petroleum exploration areas are situated near the Cabinda, Zaire (Soyo) and Luanda. Oil production in Angola currently accounts for about half of GDP and about 75% of government revenue. With oil production forecast to double over the next three years, projections for the government’s fiscal position in the medium term are dependent on both the value of oil production and the proportion that will accrue to the government.
The diamnond-rich Lunda zone is considered to be one of the world’s most important diamond production areas. Angola is the fourth-largest producer of rough diamonds in the world. Angola has considerable potential to further increase diamond output, and benefits from a high proportion of its production being of gem quality. Angola’s diamond deposits include kimberlite deposits and alluvial deposits. Diamonds production in Angola is divided between the formal sector, with companies operating under licences issued by Endiama and an informal sector comprised of artisan diggers, many without a licence.
Fishing is an important resource for Angola. With 1, 650 km of coast, Angola is rich in fish, molluscs and crustaceans. Fishing is concentrated in the province of Namibe, where cold-water species are predominant Tropical species appear in the south, in the province of Benguela, where fishing also plays an important role.
Forests are situated mainly in Cabinda (Mayombe forest) where there are abundant stocks of great economic value such as blackwood, ironwood, ebony and African sandalwood.
Angola is potentially a wealthy country, with enormous resources of oil, gas and diamonds, as well as considerable hydroelectric potential, varied agricultural land and adequate rainfall. Despite these resources, the effects of decades of war have resulted in economic performance below potential in the industrial, manufacturing and agriculture sectors, where most of the population has traditionally been employed.
Since peace, April 4th, 2002, the performance of Angola’s economy at the macroeconomic level has improved, resulting in a more stable economy. The improvement has been praised by the International Monetary Fund.
This stability has been achieved by a strategy of macroeconomic adjustment, mostly through inflation reduction and exchange rate stabilization. Macroeconomic stability continues to be one of the most important objectives of Angola’s government.
The implementation of these measures benefited from the high international oil prices, which have generated an important increase in foreign currency inflow into Angola, with consequent improvements in the natural accounts and balance of payments accounts.
The Angolan government is focusing on public investment namely in basic infrastructure, to enhance the economic conditions for the development of the non-oil sector.
The main objective of this investment programme is to reduce the strong dependence of the Angolan economy on oil, decrease its vulnerability to an eventual oil price reduction, and simultaneously support the recovery of other sectors of the economy. The investment plan has two main objectives:
- Build infrastructure to support the normal development of economies activities.
- Direct investment promotion in key sectors such as agriculture, fishing and animal husbandry, farming and industry.
SOME REASONS TO INVEST IN ANGOLA
Potentially one of Africa’s richest countries, Angola offers great opportunities for investment in various sectors. Angola is blessed with large naturally rich agricultural regions in the Luanda, Bengo, Benguela, Huila, Cabinda and Kwanza Sul areas. Also in place is a young and dynamic emerging entrepreneurial sector that owns underdeveloped property and resources, eager for partnerships that will give them acess to additional capital, new technology and know-how. Likewise, significant public sector interests exist in banking, transportation, energy and water, which are in the process of privatization.
EXAMPLES:
- Petroleum – Greater production and greater source of foreign currency. Recent industry using advanced technology achieving high levels of profitability.
- Diamonds – Large reserves and high production, and a source of foreign currency. New technology is playing a role in this sector.
- Forests – Rich forests of tropical wood.
- Cattle-raising – Significant natural resources.
- Fishing – Angola has a long coast rich in crustaceans and valuable varieties of fish. It has a dynamic industry with developing infrastructure.
- Building construction/public works – An entire country to rebuild and de-mine.
- Agriculture – Thanks to a good hydrographic distribution and a varied ecology, Angola has a large potential for production of tropical and subtropical crops.
