Economy of Angola
The economy of Angola remains heavily influenced by the effects of four decades of conflict in the last part of the 20th Century, the war for independence from Portugal (1961–75) and the subsequent civil war (1975–2002). Despite extensive oil and gas resources, diamonds, hydroelectric potential, and rich agricultural land, Angola remains poor, and a third of the population relies on subsistence agriculture. Since 2002, when the 27-year civil war ended, government policy prioritized the repair and improvement of infrastructure and strengthening of political and social institutions. During the first decade of the 21st Century, Angola was one of the fastest-growing in the world, with reported annual average GDP growth of 11.1 percent from 2001 to 2010. High international oil prices and rising oil production contributed to strong economic growth, although with high inequality, at that time. Corruption is rife throughout the economy and the country remains heavily dependent on the oil sector, which in 2017 accounted for over 90 percent of exports by value and 64 percent of government revenue. With the end of the oil boom, from 2015 Angola entered into a period of economic contraction.
|Currency||Angolan kwanza (AOA, Kz)|
|AU, AfCFTA (signed), African Development Bank, SADC, ECCAS, World Bank, IMF, WTO, Group of 77, OPEC|
GDP per capita
GDP per capita rank
GDP by sector
|15.0% (2020 est.)|
Population below poverty line
|51.3 high (2018)|
Labour force by occupation
|Unemployment||6.6% (2016 est.)|
|petroleum; diamonds, iron ore, phosphates, feldspar, bauxite, uranium, and gold; cement; basic metal products; fish processing; food processing, brewing, tobacco products, sugar; textiles; ship repair|
|177th (below average, 2020)|
|Exports||$33.07 billion (2017 est.)|
|crude oil, diamonds, refined petroleum products, coffee, sisal, fish and fish products, timber, cotton|
Main export partners
|Imports||$19.5 billion (2017 est.)|
|machinery and electrical equipment, vehicles and spare parts; medicines, food, textiles, military goods|
Main import partners
|−$1.254 billion (2017 est.)|
Gross external debt
|$42.08 billion (December 31, 2017, est.)|
|65% of GDP (2017 est.)|
|−6.7% (of GDP) (2017 est.)|
|Revenues||37.02 billion (2017 est.)|
|Expenses||45.44 billion (2017 est.)|
|Economic aid||$383.5 million (1999 est.)|
|$17.29 billion (December 31, 2017, est.)|
The Portuguese explorer Diogo Cão reached the Angolan coast in 1484, after which Portugal began to found trading posts and forts along the shore. Paulo Dias de Novais founded Sāo Paulo de Loanda (Luanda) in 1575. São Felipe de Benguella (Benguela) followed in 1587.
The principal early trade was in slaves. Portuguese merchants purchased the slaves from the local Imbangala and Mbundu peoples, notable slave hunters, and sold them to the sugarcane plantations in Brazil. Brazilian ships were frequent visitors to Luanda and Benguela and Angola functioned as a kind of colony of Brazil, with Brazilian Jesuits active in its religious and educational centers.
The Portuguese Empire was neglected during the period of the Iberian Union, which lasted from 1580 to 1640. The Dutch, bitter enemies of their former masters in Spain, invaded many Portuguese overseas possessions. During Portugal's separatist war against Spain, the Dutch occupied Luanda from 1640 to 1648, calling it "Fort Aardenburgh". The Dutch used the territory to supply their own slaves to the sugarcane plantations of Northeastern Brazil (Pernambuco, Olinda, Recife), which they had also seized from Portugal. John Maurice, Prince of Nassau-Siegen, conquered the Portuguese possessions of Saint George del Mina, Saint Thomas, and Luanda, Angola, on the west coast of Africa. Portugal recovered the territory between 1648 and 1650.
In the high plains, the Planalto, the most important native states were Bié and Bailundo, the latter being noted for its production of foodstuffs and rubber. Portugal expanded into their territory,[when?] but did not control much of the interior prior to the late 19th century.
The Portuguese started to develop townships, trading posts, logging camps and small processing factories. From 1764 onwards, there was a gradual change from a slave-based society to one based on production for domestic consumption and export. Following the independence of Brazil in 1822, the slave trade was formally abolished in 1836. However it did continue locally into the 20th century. In 1844, Angola's ports were opened to foreign shipping.
By 1850, Luanda was one of the greatest and most developed Portuguese cities in the vast Portuguese Empire outside of Mainland Portugal, full of trading companies, exporting peanut oil, copal, timber, and cocoa. The principal exports of the post-slave economy in the 19th century were rubber, beeswax, and ivory. Maize, tobacco, dried meat and cassava flour also began to be locally produced. Prior to the First World War, exportation of coffee, palm kernels and oil, cattle, leather and hides, and salt fish joined the principal exports, with small quantities of gold and cotton also being produced. Grains, sugar, and rum were also produced for local consumption. The principal imports were foodstuffs, cotton goods, hardware, and British coal. Legislation against foreign traders was implemented in the 1890s. The territory's prosperity, however, continued to depend on plantations worked by labor "indentured" from the interior.
From the 1920s to the 1960s, strong economic growth, abundant natural resources and development of infrastructure, led to the arrival of even more Portuguese settlers. Petroleum was known to exist as early as the mid-19th century, but modern exploitation didn't begin until in 1955. Production began in the Cuanza basin in the 1950s, in the Congo basin in the 1960s, and in the exclave of Cabinda in 1968. The Portuguese government granted operating rights for Block Zero to the Cabinda Gulf Oil Company, a subsidiary of ChevronTexaco, in 1955. Oil production surpassed the exportation of coffee as Angola's largest export in 1973.
|Angolan oil production 1973-2019|
|Angolan oil production rates|
|Year||thousand barrels per day||thousand cubic metres per day|
A military-led coup d'état, started on April 25, 1974, in Lisbon, overthrew the Marcelo Caetano government in Portugal, and promised to hand over power to an independent Angolan government. Mobutu Sese Seko, the President of Zaire, met with António de Spínola, the transitional President of Portugal, on September 15, 1974, on Sal island in Cape Verde, crafting a plan to empower Holden Roberto of the National Liberation Front of Angola, Jonas Savimbi of UNITA, and Daniel Chipenda of the MPLA's eastern faction at the expense of MPLA leader Agostinho Neto while retaining the façade of national unity. Mobutu and Spínola wanted to present Chipenda as the MPLA head, Mobutu particularly preferring Chipenda over Neto because Chipenda supported autonomy for Cabinda. The Angolan exclave has immense petroleum reserves estimated at around 300 million tons (~300×109 kg) which Zaire, and thus the Mobutu government, depended on for economic survival. After independence thousands of white Portuguese left, most of them to Portugal and many travelling overland to South Africa. There was an immediate crisis because the indigenous African population lacked the skills and knowledge needed to run the country and maintain its well-developed infrastructure.
The Angolan government created Sonangol, a state-run oil company, in 1976. Two years later Sonangol received the rights to oil exploration and production in all of Angola. After independence from Portugal in 1975, Angola was ravaged by a horrific civil war between 1975 and 2002.
United Nations Angola Verification Mission III and MONUA spent USD1.5 billion overseeing implementation of the Lusaka Protocol, a 1994 peace accord that ultimately failed to end the civil war. The protocol prohibited UNITA from buying foreign arms, a provision the United Nations largely did not enforce, so both sides continued to build up their stockpile. UNITA purchased weapons in 1996 and 1997 from private sources in Albania and Bulgaria, and from Zaire, South Africa, Republic of the Congo, Zambia, Togo, and Burkina Faso. In October 1997 the UN imposed travel sanctions on UNITA leaders, but the UN waited until July 1998 to limit UNITA's exportation of diamonds and freeze UNITA bank accounts. While the U.S. government gave US$250 million to UNITA between 1986 and 1991, UNITA made US$1.72 billion between 1994 and 1999 exporting diamonds, primarily through Zaire to Europe. At the same time the Angolan government received large amounts of weapons from the governments of Belarus, Brazil, Bulgaria, China, and South Africa. While no arms shipment to the government violated the protocol, no country informed the U.N. Register on Conventional Weapons as required.
Despite the increase in civil warfare in late 1998, the economy grew by an estimated 4% in 1999. The government introduced new currency denominations in 1999, including a 1 and 5 kwanza note."Central Bank governor explains arrangements for new currency". BBC Selected Transcripts: Africa. November 1, 1999. Retrieved October 10, 2017.
An economic reform effort was launched in 1998. Angola ranked 160 of 174 nations in the United Nations Human Development Index in 2000. In April 2000 Angola started an International Monetary Fund (IMF) Staff-Monitored Program (SMP). The program formally lapsed in June 2001, but the IMF remains engaged. In this context the Government of Angola has succeeded in unifying exchange rates and has raised fuel, electricity, and water rates. The Commercial Code, telecommunications law, and Foreign Investment Code are being modernized. A privatization effort, prepared with World Bank assistance, has begun with the BCI bank. Nevertheless, a legacy of fiscal mismanagement and corruption persists. The civil war internally displaced 3.8 million people, 32% of the population, by 2001. The security brought about by the 2002 peace settlement has led to the resettlement of 4 million displaced persons, thus resulting in large-scale increases in agriculture production.
Angola produced over 3 million carats (600 kilograms) of diamonds in 2003, and production was expected to grow to 10 million carats (2,000 kilograms) per year by 2007. In 2004 China's Eximbank approved a $2 billion line of credit to Angola to rebuild infrastructure. The economy grew 18% in 2005 and growth was expected to reach 26% in 2006 and stay above 10% for the rest of the decade. By 2020, Angola had a national debt of $76 billion, of which $20 billion is to China.
The construction industry is taking advantage of the growing economy, with various housing projects stimulated by the government initiatives for example the Angola Investe program and the Casa Feliz or Meña projects. Not all public construction projects are functional. A case in point: Kilamba Kiaxi, where a whole new satellite town of Luanda, consisting of housing facilities for several hundreds of thousands of people, was completely uninhabited for over four years because of skyrocketing prices, but completely sold out after the government decreased the original price and created mortgage plans at around the election time thus made it affordable for middle-class people. ChevronTexaco started pumping 50 kbbl/d (7.9×103 m3/d) from Block 14 in January 2000, but production decreased to 57 kbbl/d (9.1×103 m3/d) in 2007 due to poor-quality oil. Angola joined the Organization of the Petroleum Exporting Countries on January 1, 2007. Cabinda Gulf Oil Company found Malange-1, an oil reservoir in Block 14, on August 9, 2007.
Despite its abundant natural resources, output per capita is among the world's lowest. Subsistence agriculture provides the main livelihood for 85% of the population. Oil production and the supporting activities are vital to the economy, contributing about 45% to GDP and 90% of exports. Growth is almost entirely driven by rising oil production which surpassed 1.4 million barrels per day (220×103 m3/d) in late-2005 and which is expected to grow to 2 million barrels per day (320×103 m3/d) by 2007. Control of the oil industry is consolidated in Sonangol Group, a conglomerate owned by the Angolan government. With revenues booming from oil exports, the government has started to implement ambitious development programs to build roads and other basic infrastructure for the nation.
In the last decade of the colonial period, Angola was a major African food exporter but now imports almost all its food. Severe wartime conditions, including extensive planting of landmines throughout the countryside, have brought agricultural activities to a near-standstill. Some efforts to recover have gone forward, however, notably in fisheries. Coffee production, though a fraction of its pre-1975 level, is sufficient for domestic needs and some exports. Expanding oil production is now almost half of GDP and 90% of exports, at 800 thousand barrels per day (130×103 m3/d). Diamonds provided much of the revenue for Jonas Savimbi's UNITA rebellion through illicit trade. Other rich resources await development: gold, forest products, fisheries, iron ore, coffee, and fruits.
|Year||Gross Domestic Product (*$1,000,000)||US Dollar Exchange||Per Capita Income|
(as % of USA)
|1995||5,066||14 Angolan Kwanza||1.58|
|2000||9,135||91,666 Angolan Kwanza||1.96|
|2005||28,860||2,515,452 Angolan Kwanza||4.73|
The following table shows the main economic indicators in 1980–2017. Inflation below 5% is in green.
(in Bil. US$ PPP)
|GDP per capita
(in US$ PPP)
(in % of GDP)
Angola produced, in 2018:
- 8.6 million tons of cassava (8th largest producer in the world);
- 3.5 million tons of banana (7th largest producer in the world, or the 10th largest, if we consider together with plantain);
- 2.2 million tons of maize;
- 1.2 million tons of sweet potato (10th largest producer in the world);
- 806 thousand tons of potato;
- 597 thousand tons of pineapple (13th largest producer in the world);
- 572 thousand tons of sugarcane;
- 355 thousand tons of cabbage;
- 314 thousand tons of beans;
- 280 thousand tons of palm oil;
- 154 thousand tons of peanut;
Exports in 2004 reached US$10,530,764,911. The vast majority of Angola's exports, 92% in 2004, are petroleum products. US$785 million worth of diamonds, 7.5% of exports, were sold abroad that year. Nearly all of Angola's oil goes to the United States, 526 kbbl/d (83.6×103 m3/d) in 2006, making it the eighth largest supplier of oil to the United States, and to China, 477 kbbl/d (75.8×103 m3/d) in 2006. In the first quarter of 2008, Angola became the main exporter of oil to China. The rest of its petroleum exports go to Europe and Latin America. U.S. companies account for more than half the investment in Angola, with Chevron-Texaco leading the way. The U.S. exports industrial goods and services, primarily oilfield equipment, mining equipment, chemicals, aircraft, and food, to Angola, while principally importing petroleum. Trade between Angola and South Africa exceeded US$300 million in 2007. From the 2000s, many Chinese have settled and started up businesses.
Angola produces and exports more petroleum than any other nation in sub-Saharan Africa, surpassing Nigeria in the 2000s. In January 2007 Angola became a member of OPEC. By 2010 production is expected to double the 2006 output level with development of deep-water offshore oil fields. Oil sales generated US$1.71 billion in tax revenue in 2004 and now makes up 80% of the government's budget, a 5% increase from 2003, and 45% of GDP.
Block Zero provides the majority of Angola's crude oil production with 370 kbbl/d (59×103 m3/d) produced annually. The largest fields in Block Zero are Takula (Area A), Numbi (Area A), and Kokongo (Area B). Chevron operates in Block Zero with a 39.2% share. SONANGOL, the state oil company, Total, and Eni own the rest of the block. Chevron also operates Angola's first producing deepwater section, Block 14, with 57 kbbl/d (9.1×103 m3/d).
The United Nations has criticized the Angolan government for using torture, rape, summary executions, arbitrary detention, and disappearances, actions which Angolan government has justified on the need to maintain oil output.
Angola is the third-largest trading partner of the United States in Sub-Saharan Africa, largely because of its petroleum exports. The U.S. imports 7% of its oil from Angola, about three times as much as it imported from Kuwait just prior to the Gulf War in 1991. The U.S. Government has invested US$4 billion in Angola's petroleum sector.
Oil makes up over 90% of Angola's exports.
Angola is the third largest producer of diamonds in Africa and has only explored 40% of the diamond-rich territory within the country, but has had difficulty in attracting foreign investment because of corruption, human rights violations, and diamond smuggling. Production rose by 30% in 2006 and Endiama, the national diamond company of Angola, expects production to increase by 8% in 2007 to 10 million carats annually. The government is trying to attract foreign companies to the provinces of Bié, Malanje and Uíge.
The Angolan government loses $375 million annually from diamond smuggling. In 2003 the government began Operation Brilliant, an anti-smuggling investigation that arrested and deported 250,000 smugglers between 2003 and 2006. Rafael Marques, a journalist and human rights activist, described the diamond industry in his 2006 Angola's Deadly Diamonds report as plagued by "murders, beatings, arbitrary detentions and other human rights violations." Marques called on foreign countries to boycott Angola's "conflict diamonds". In December 2014, the Bureau of International Labor Affairs issued a List of Goods Produced by Child Labor or Forced Labor that classified Angola as one of the major diamond-producing African countries relying on both child labor and forced labor. The U.S. Department of Labor reported that "there is little publicly available information on [Angola's] efforts to enforce child labor law". Diamonds accounted for 1.48% of Angolan exports in 2014.
Under Portuguese rule, Angola began mining iron in 1957, producing 1.2 million tons in 1967 and 6.2 million tons by 1971. In the early 1970s, 70% of Portuguese Angola's iron exports went to Western Europe and Japan. After independence in 1975, the Angolan Civil War (1975–2002) destroyed most of the territory's mining infrastructure. The redevelopment of the Angolan mining industry started in the late 2000s.
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