Angola’s economy was not immune to the effects of the crisis that shook the world in 2008 and 2009. GDP contracted in 2009, after years of rapid growth, and expanded sluggishly in 2010 because of declines in the price of oil.
Petroleum production and related activities represent about 85 per cent of GDP, so the decline in the price of a barrel of oil to $30.28 in December 2008, from a record high of $145 just five months earlier, was a huge blow to Angolan revenues.
Fortunately for Angola, the price of crude is steadily rising and economic recoveries around the world are spurring demand for more oil and other commodities. The republic’s economy is now prepared for a return to the rapid growth of the years previous to the crisis, President Jose Eduardo dos Santos said in his December 29, 2010 speech to the nation.
“We managed to overcome the consequences of the global economic and financial crisis of 2009,” he said. “Next year our national economy will resume its high growth indexes.”
The country’s economy expanded 4 per cent in 2009, according to Jose Lima Massano, governor of the National Bank of Angola, helped by the 5.7 per cent growth of the oil sector.
The economic contraction of 2009, combined with the drop in the price of oil, forced the Government to cut back on its spending plans, which are vital to the reconstruction of the country following the end of the civil war in 2002. Nevertheless, reduced spending, economic growth and the price of oil in 2010 have left the Angolan Government in a much more solid financial situation, the IMF said in November.
“Higher oil prices have helped to strengthen the Government’s financial position, but expenditure restraint has also been a significant contributory factor,” the IMF said in a statement on November 15, 2010. “A solid pick-up in the pace of growth is expected for 2011.”
Other observers agree. GDP will grow much more quickly over the next five years, according to estimates published by the Economist Intelligence Unit. Angola’s economy will expand at an average pace of 7.4 per cent from 2011 to 2015. An important part of those forecasts are based on the behaviour of the price of oil over the coming years, a factor the Government is very aware of.
President dos Santos, Finance Minister Carlos Alberto Lopes and Economy Minister Abraão Pio dos Santos Gourgel are all working diligently to diversify Angola’s economy and make it less susceptible to sudden changes in the price of oil.
The Government has many different programmes intended to encourage the extraction of more of the country’s vast mineral wealth, which includes diamonds, gold, iron, aluminium-bearing bauxite, manganese and others.
Additional areas of economic importance include Angola’s huge forests, which can host both sustainable forestry operations and attract tourists eager to see the country’s natural beauty and many types of wild animals.
Laws have been changed to clarify and strengthen the regulatory framework for foreign investment in those areas, with the goal of attracting companies from abroad to come to Angola and help take advantage of its many profitable opportunities.
The private sector is also doing all it can to contribute to the country’s economic and social wellbeing. The financial sector is doing the key task of funnelling financing into important projects, in addition to giving both Angolans and foreigners valuable advice on how to run a business or where is best to invest. It is also providing necessary training to a new generation so that the wealth produced by the economy can be shared among its growing population.
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