Angola has been working on a series of reforms aimed at restoring macroeconomic stability and promoting economic diversification. However, the country's heavy reliance on the oil sector remains a significant challenge. Oil contributes to about 30 percent of Angola's GDP, 65 percent of revenues, and over 95 percent of goods exports. The non-oil economy continues to grow weakly, with oil price shocks causing macroeconomic instability and fiscal crises that slow down the real economy.
The "Country Economic Memorandum: Moving Beyond Oil" is designed to assist Angola’s policymakers in advancing economic diversification as outlined in the National Development Plan (NDP) 2023–2027 and the Long-Term Vision (Angola 2050). It highlights three main challenges:
1. Macroeconomic instability from oil dependency and volatility, which has hindered private sector development and job creation.
2. Low productivity across firms due to a challenging business environment.
3. Limited access to services such as electricity, transport, digital tools, and low human capital levels.
Poverty and inequality remain high in Angola; about one-third of Angolans live below the international poverty line of USD 2.15 per day. Economic inequality is substantial, reflected by a Gini index of approximately 0.51. Additionally, Angola’s human capital index (HCI) stands at 0.36, one of the lowest in Sub-Saharan Africa. Unemployment significantly affects young people and women, with around one-third of the population unemployed. Furthermore, approximately 80 percent of jobs are within the informal economy.
To tackle these issues, the Country Economic Memorandum provides a roadmap for sustainable and inclusive growth that better utilizes existing resources while laying a foundation for future prosperity through three policy priorities:
- Pursuing macroeconomic stability by improving macro-fiscal management.
- Boosting productivity growth to create jobs.
- Expanding access to basic infrastructure and investing in human capital.
The development of the Lobito Corridor presents an opportunity for accelerating economic transformation in Angola. With appropriate reforms, it could serve as a catalyst for diversifying Angola’s economy and connecting it to regional and global markets.
If structural reforms targeting macroeconomic stability; boosting productivity growth; expanding physical and human capital endowments; and utilizing agricultural potential are accelerated, economic growth could nearly double by 2050.