Angola’s GDP may grow further 2% per year with improved company efficiency – World Bank

12 December 2005

Luanda, Angola, 12 Dec – The Angolan economy could grow by a further two percent per year if the country increased company efficiency and improved conditions for small and medium-sized companies, the World Bank (WB) said in a report published Monday.

For Rita Ramalho, economist with the World Bank, the oil and diamond sectors, “are very large in Angola and it makes sense that they be the government’s major focus, but it should be also thinking about other things that could be a great source of riches and revenue.”

“Clearly oil is good fro the country because it generates revenue. But, on the other hand, because it is a rich sector, the government can always find money without having to think about small and medium-sized sectors which are seen as less important and are less promoted,” Ramalho said after a visit to Angola to present the WB Doing Business in 2006 Report.

Angola is currently the second largest oil producer in sub-Saharan Africa, with a daily output of 1.3 million barrels, which, according to projections from sector specialists, should increase to two million barrels per day from 2008.

The WB report says that bureaucracy, inadequate legislation and the legal system as being the main obstacles to be overcome by small and medium-sized companies.

The difficulties felt by companies, Ramalho said, take many onto the informal economy, making the Angolan state lose out on important revenues at a time when the country is looking to rebuild its infrastructures and fight poverty.

The Doing Business report places Angola in 135th place in the ranking of the best countries in which to do business, out 155. The World Bank placed New Zealand in first place, and the Democratic Republic of the Congo in 155th place.(macauhub)