The growth forecast for Angola’s economy in 2016 by the Economist Intelligent Unit (EIU) is more generous than the figure included in the proposed revision of the State Budget Law for 2016, according to a report released last Saturday.
While the Angolan government has lowered its forecast from 3.3% to 1.1% of gross domestic product (GDP), the EIU says growth should be 1.3%, the same rate officially announced in mid-July for the current year.
In its latest report on Angola the EIU estimates the country’s economy will grow at an average rate of 2.7% in the period between 2016 and 2020, with a maximum of 3.5% in 2018 and a minimum of 1 3% this year.
The expansion of the Angolan economy should occur, according to the government, through an increase in agricultural production, but the EIU believes that this view is too optimistic considering poor infrastructure and the limited capacity of the distribution chain.
The remaining non-oil sectors should continue to have a poor performance, so almost everything is focused on the oil sector, the main source of foreign currency and tax revenues, in addition to diamonds.
The publication, to which Macauhub had access, noted that the proposed budget review for 2016 is based on an oil price of US$41 per barrel, compared to US$45 in the original version, and therefore per capita GDP should fall for the third consecutive year.
In 2016-2020, some sectors such as transport, industry, trade and services, will expand relatively quickly but the EIU says investments outside the oil sector are expected to remain low due to a lack of reforms, despite the adoption of a new investment law.
The EIU highlights that local authorities claim the law reduces paperwork but adds that other contextual costs remain in place as well as the concerns of businesses with regard to late payments, in particular in the execution of public works. (macauhub/AO)