Angola: Angola needs to diversify its economic activities – OECD

9 June 2008

Lisbon, Portugal, 9 June – Angola needs a “radical change” in its political strategy and to focus on diversifying its activities, beyond oil, in order to raise the majority of the population out of poverty, a spokesman for the Organisation of Economic Cooperation and Development (OECD) said Friday in Lisbon.

“Angola needs a radical change of policy to start, continue and increase projects to improve life in rural areas and regional cities,” said the spokesman for the Development Centre of the OECD, Colm Foy, who Friday in Lisbon presented the Economic Prospects for Africa 2008.

Colm Foy noted that across Angola, 68 percent of the population lived in poverty, charging that it was not acceptable that one of the richest countries in Africa also had one of the poorest populations.

Colm Foy noted that the Angolan economy was “totally dependent on the oil sector,” and was focused only on minerals and the mining industry.

In 2006, the contribution of the oil sector to GDP was 60 percent, against 40 percent for the remaining sectors, such as agriculture (8 percent), wholesale and retail trade (15 percent), construction (5 percent), manufacturing industry (5 percent), other services (8 percent) and diamonds (2 percent).

Colm Foy noted, however, that the weight of the latter sectors was still reduced and said that in a global economy the contribution of all sectors was more evenly distributed.

Despite the strong growth posted by Angola over the last few years – in 2007 alone it saw GDP growth of 19.8 percent – Colm Foy said that people’s quality of life had “improved little,” and it was thus necessary to diversify sectors of activity.

Asked about the OECD’s and African Development Bank’s (ADB) projections, which in 2009 forecast a slowdown in Angola’s economic growth to half of that forecast for this year, falling from 11.5 percent in 2008 to 5.1 percent next year, Colm Foy said that they were a “realistic vision not a pessimistic one,” as oil production would remain at around 1.9 million barrels per day and the price of oil would level out, and thus economic growth would decrease.

In relation to the International Monetary Fund (IMF), which forecasts growth of 15.9 percent for Angola this year, and a slowdown to 13.2 percent next year, the OECD spokesman said that the IMF analysis was based on oil price rises. (macauhub)