Angola still has high levels of poverty despite economic diversification

17 June 2013

Angola’s economy continues to have high levels of poverty, with a blatant inequality in distribution of wealth, despite reforms put in place for diversification, according to the latest report from Deutsche Bank.

Entitled ”Angola: An oil economy on the road to diversification,” Deutsche Bank’s report forecasts that Angola will post growth of around 7 percent in the next few years, following an average of 11 percent in the last decade and a projection of over 8 percent in 2012.

After recognising that economic diversification is on the political agenda, Deutsche Bank said that the US$5 billion available in the Angolan Sovereign Fund, launched in October 2012, “should help to protect the economy from volatile oil prices.”

“Accounting for around half of gross domestic product, 95 percent of exports and 75 percent of revenues, the Angolan oil sector is the most dynamic in sub-Saharan Africa, due to continuous exploration and a favourable regulatory climate,” noted Deutsche Bank, according to Portuguese news agency Lusa.

Oil production in is expected to total 2 million barrels per day in 2015, which is significantly more than the 1.75 million per day average in 2012.

“In the long term, if the recently discovered ‘pre-salt’ reserves prove to be similar to those found in Brazil, Angola could become Africa’s biggest oil producer,” the report said.

“The persistence of a high level of poverty (55 percent of Angolans live below the poverty line, on less than US$1.2 per day), increased discontent and street protests,” are factors that, according to Deutsche Bank, led the Angolan government to increase investment in the non-oil sector.

Deutsche Bank also noted that per capita GDP, which is currently US$5,980, has increased seven-fold since the end of the civil war in 2002, although disparities between rich and poor are still very high in Angola. (macauhub)