Economic growth in Angola remains robust

28 March 2013

Economic growth in Angola remains robust and in both 2012 and 2013 is expected to total 8 percent, but dependence on oil remains too high, accounting for 95 percent of exports, Deutsche Bank said in an analysis published Wednesday.

Deutsche Bank also said that economic growth should remain high given that oil production, which in 2012 averaged 1.75 million barrels per day, was expected to increase along with exports from the Angola LNG project beginning.

Other strong points according to the bank are that as well as economic growth the current account surplus, despite falling slightly still remains high, that there have been improvements to the taxation system, an increase in foreign reserves to over eight months of imports in 2012, and single digit inflation.

In terms of weak points Deutsche Bank, as well as high dependence on oil, pointed to weak institutions and a lack of transparency in the use of public resources.

The analysis also noted that the emergence of a private sector in Angola was progressively being pushed back by investments in the public sector, due to poor regulation and a lack of qualified staff.

Angola’s Sovereign Fund, which was launched with initial capital of US$5 billion, is expected to grow quickly and, if it is well managed, will be a solid basis for diversification of the economy through investment in infrastructure, agriculture and hotels and tourism. (macauhub)