Official name: Republic of Angola
- Capital: Luanda
- Area: 1,246,700 sq km
- Population: 19,625,353
- Official language: Portuguese
- GDP current: $129.3 billion
- GDP growth: 4.2%
- GDP per capita: $ 7,300
- Inflation: 14.27%
- Labour force: 10.18 million
- Unemployment rate: 26%
- Currency: Angolan kwanza
Top export destinations: China 48.1%, US 8.9%, India 8.8%, Spain 5.6%
Top import destinations: China 23.7%, Portugal 16.3%, US 8.1%, South Korea 7.1%, Brazil 5%, South Africa 4.2%, France 4.1%
Main exports: crude oil, diamonds, refined petroleum products, coffee, sisal, fish and fish products, timber, cotton
Main imports: machinery and electrical equipment, vehicles and spare parts; medicines, food, textiles, military goods
GDP by sector of origin – % of total
With a population of around 24 million, Angola has the third largest economy in sub-Saharan Africa.
The country is still rebuilding since the end of a 27-year civil war in 2002, following its independence from Portugal in 1975.
Oil remains the key driver of the economy – Angola is the second largest oil producer in the region – and oil production and its supporting activities contribute to approximately 50% of GDP, more than 70% of government revenue, and more than 90% of the country's exports.
Increased oil production supported growth averaging more than 17% per year from 2004 to 2008 while a postwar reconstruction boom led to high rates of growth in construction and agriculture.
However, the global recession that started in 2008 stalled economic growth. In particular, lower prices for oil and diamonds during the global recession slowed GDP growth to 2.4% in 2009, and many construction projects stopped because the government accrued $9 billion in arrears to foreign construction companies when revenues fell in 2008 and 2009.
The International Monetary Fund (IMF) has predicted 3.9% GDP growth in 2015, slightly down on previous years and largely linked to the recent slide in world oil prices, on which Angola remains heavily dependent.
Angola appears to be at a critical juncture in its economic development with the African Development Bank warning that structural reforms are now imperative to accelerate economic diversification, and reduce its dependency on natural resources.
Strengths of the Angolan market
- The economy has had an average double-digit growth since 1990
- A growing middle class
- A young population (50% under 21) who are eager to learn
- Abundant natural resources
- Angola is focusing on diversification, which opens up many opportunities
Using its considerable natural resources, in particular oil and gas, the Angolan government is looking to diversify its economy, resulting in significant opportunities for investment in the country.
The UK is one of the largest investors in Angola. In 2013 the UK and Angola agreed on a High Level Prosperity Partnership, one of only five across Africa. This is beginning to develop a strong relationship in trade between the two countries.
A number of well-known UK companies operate in Angola, including BP, Diageo, G4S, Aggreko, GSK, BA Iberia, Standard Chartered Bank, Investec, Wood Group and GE Oil and Gas. There are also lots of small and medium sized British companies.
The fastest growing sectors in Angola are:
- Oil and gas
- Construction and infrastructure
Challenges of the Angolan market
- Poor power supply nationwide
- Weak infrastructures across most sectors
- Government bureaucracy when awarding and paying for contracts
- High unemployment
- Lack of skills amongst the populace
The Angolan economy has been hit hard by the sharp decline in international oil prices. This has led to sizeable cuts in public spending causing considerable delays in State’s payment to suppliers and restrictions on foreign currency supplies, with a knock on effect felt in all sectors.
Devaluation of the kwanza to the US dollar continues, with some predicting eventually by as much as 25% to 40%. Consequently higher prices are being charged for all imports, leading to increased inflation.
The IMF suggests the economic situation in 2016 is likely to remain challenging in Angola as international oil prices are not expected to recover and risks are on the downside.
Growth is projected to remain stable at 3.5 per cent in 2016, with the oil sector growing by about 4 per cent. The non-oil sector is expected to show a small improvement, growing by 3.4 per cent year-on-year, driven mainly by a stronger recovery in agriculture.
Inflation is projected to slow to 13 per cent at end-2016, as the effect of the recent monetary tightening is expected to be felt more clearly in the second half of 2016.
Bribery and corruption remain prevalent throughout Angolan society, particularly within the civil service and police. However, the government has declared a zero-tolerance approach and a number of important pieces of legislation designed to address the problems have been passed.
Angola’s infrastructure spending has significantly increased over the past few years. However, the recent drop in oil price has inevitably led to some scaling back, with certain projects being delayed. As a result, the government is looking for more inward investment along with Public Private Partnerships mechanisms. Areas of infrastructure growth include:
- New housing
- Improving public services
- Developing the tourist sector
- Improving transport links across the country
- ‘Luanda 2030’ – an ambitious plan to make Luanda a 21st Century capital
- New ports, dams, and airports etc
Angola has just under half its total land mass of dedicated to agricultural land. With most goods currently being imported, the growth potential of this sector is enormous. The Agriculture sector is seen by the Angolan Government as a top priority and there is a huge push to bring inward investment.
Opportunities within this sector include:
- Equipment supply
- Training and education
- Food processing and manufacture,
- Poultry and fish farming
- Distribution, haulage, storage and waste recycling
Education and training
With about 50% of the population 21 or under, the demand for education is exceeding supply. English training is in huge demand and training is required in virtually every discipline.
From 2016, The Ministry of Education is planning to make English compulsory at grades 5 and 6 in public schools.
Opportunities for UK companies include:
- Corporate training
- Setting up English schools
- Supply of equipment and resources
- Distance learning products
- Collaboration with local universities
- Behavioural and social training
Angola is looking to invest $16 billion on improving the sector, including in renewable energy. It has ambitious plans to build new power stations and generating units. Only 20-30% of the population has an electricity system and these are subject to frequent power cuts. There is a high dependency on oil run generators.
Opportunities for UK companies include:
- Oil and gas supply chain
- Generation infrastructure, mainly based on water resources and natural gas
- Renewable energy technologies
- Implementing energy metering and monitoring systems
British Embassy Luanda
Rua 17 de Setembro, 4
Caixa Postal 1244
Tel: +244 222 334 582/83
Republic of Angola Embassy
22 Dorset Street
Tel: +44 207 299 9850