Macroeconomic country-assessment – Angola

The fifth largest economy in sub-Saharan Africa, Angola is a strategic country for the AFD Group in Southern Africa. In a context of oil dependence and persistent socio-economic challenges, AFD is addressing the sustainable development priorities of its local partners, in particular by supporting improved access to water and electricity. The Group also supports Angola’s economic and financial transition by supporting macroeconomic reforms, the modernization of vocational training and higher education, and the strengthening of the entrepreneurial culture. It also promotes the development of a strong agricultural sector, generating more inclusive growth and less dependent on the vagaries of the oil sector.

Produced by AFD's team of country-risk economists, macroeconomic country assessments provide an analysis of development processes in countries in which AFD operates. They also characterize their growth trajectory, and detect economic, social, political and financial vulnerabilities associated with these trajectories. AFD Group is thus in a position to properly measure the challenges and monitor the risks associated with each of its investments.

Emphasis is placed on developing countries, particularly in Africa, for which macroeconomic analyses are rare or infrequent. AFD seeks to complement existing production on the global economic situation, more focused on advanced economies and major emerging countries.

Find out more: Macroeconomic Analyses at AFD

Country-risk analysis is based on a close follow-up over a long period of time and rooted in a fine knowledge of local contexts. Cyclical trends, often highlighted in the news, are always examined in the light of structural trends and of the regional context in which they take place. The aim is to highlight country-specific macroeconomic issues while assessing risks against comparable time- and space-based trajectories.

Country-risk economists place the study of socio-political vulnerabilities, the growth model, the viability of public debt, external balances and the soundness of the financial system at the heart of their assessment, and give specific attention to countries' exposure to climate risks.

Angola is the second largest oil producer in Africa and its macroeconomic performance is very directly correlated with changes in the price of oil. The oil sector represents, depending on the year, nearly 30 to 35% of GDP, 95% of exports and 50 to 60% of government revenues. The fall in oil prices from mid-2014 has led to significant macroeconomic imbalances resulting in five consecutive years of recession. Since 2021, the situation has improved thanks to the sharp rise in oil prices, but the economy remains vulnerable to exogenous shocks. The efforts undertaken by the authorities to diversify the economic model are encouraging but remain insufficient to develop strong growth drivers, while socio-economic and development challenges remain a priority. 

Download our publications on the macroeconomic situation of Angola: 

• “Angola: An extremely volatile oil economy”, in MacroDev Panorama n°42, September 2022 
• ​​​​​​“Angola: A vital but constrained transformation of the economic model in the run-up to the 2022 elections”, MacroDev n°41, August 2022 (also available in French and Portuguese)

Contact:

• Benoît Jonveaux, country-risk economist, AFD