Angola’s balance of trade surplus increases, with China as main customer

7 June 2011

Luanda, Angola, 7 June – Angola has boosted its balance of trade surpluses by reducing imports and increasing exports, and has China as its main customer, official Angolan statistics showed.

According to the latest report from Angola’s Customs Service, imports fell by 12.5 percent in 2010 to US$18.1 billion, whilst exports rose 2.1 percent to US$52.3 billion.

The balance of trade thus posted a surplus of US$30.54 billion and the current account was positive, exceeding the government’s projections and “recovering from the negative performance of 2009,” noted Portuguese bank BPI in its latest report on the Angolan economy.

“In 2011, with the expected consolidation of the movement for the recovery of the oil business and the policy to protect industries that replace imports by applying more tax and customs barriers, the trends seen in 2010 are expected to intensify,” noted the Portuguese bank, which has a controlling stake in Angola’s Banco Fomento.

In this scenario, it said, “the current account balance should gradually improve,” and according to the International Monetary Fund (IMF) should reach 1.4 percent.

Angola’s foreign trade figures in 2010 showed a change in the geographical distribution of Angola’s trade. Portugal remained as the main supplier, but its share was reduced substantially, whilst trade with the Netherlands and the United States increased.

“In the case of imports, over the last two years there has been greater geographical diversity and the main suppliers have seen a drop in the share,” BPI said.

In relation to exports China was by far the biggest destination, with a 40 percent share of the total, or US$22.1 billion, mainly in oil.

Oil continues to be, by far, Angola’s biggest export product, accounting for over 96 percent of the total, according to the figures cited by BPI.

The bank lowered its projection for growth of the Angolan economy to 6.3 percent, with the non-oil sector seeing greatest year-on-year growth, of 8.8 percent.

For the oil industry growth is expected to be 2.8 percent and, “the recent performance of the oil market,” is the reason for BPI’s projection.

BPI’s projection is thus more measured than others that are currently available, which vary between 7.6 percent included in the state budget and 7.9 percent from the Economist Intelligence Unit.

According to figures cited by BPI credit to the economy has been falling, reflecting the performance of the public sector, whilst private sector credit has seen growth of some 20 percent.

The latest measures from the National Bank of Angola “should create conditions for private sector credit to continue expanding over the next few months.”

Amongst the measures to promote liquidity of the financial system is the reduction of rediscount rates, from 25 to 20 percent, of the permanent liquidity facility, the introduction of repos to allow retail banks with excessive liquidity to apply their funds for the shortest amount of time, as well as the return of obligatory reserves to pre-crisis levels.

In terms of deposits in the banking system, the trend is one of stabilisation, and for the proportion of deposits in national currency to fall. (macauhub)