Angola: Economic and Political Overview
Among the largest oil producers in Africa, Angola also boasts the third-largest GDP in sub-Saharan Africa (IMF). The country’s economy rebounded in 2024, growing by 3.8% compared to 1% in 2023, as oil production exceeded expectations, averaging over 1.1 million barrels per day. Economic recovery expanded to the non-oil sector, which grew by 4.8% in the first three quarters. This growth was driven by mining (with record diamond production), fisheries, and services. Despite early drought conditions, the agriculture sector also contributed to non-oil growth. According to the IMF, growth is expected to remain at or above 3.0% in 2025. With stable oil production, overall growth will likely be driven by the non-oil sector, which is gradually strengthening due to a revival in investment and credit growth.
Concerning public finances, despite a 20% increase in oil revenues, underperformance in non-oil revenues, overspending on capital projects, and slower fuel subsidy reforms resulted in a 1% fiscal deficit in 2024, compared to a projected 1.3% GDP surplus. However, public debt decreased to 62.4% of GDP in 2024, down from 71.4% in 2023, due to strong nominal GDP growth and external debt repayments. The overall fiscal deficit is projected to rise to 1.3% of GDP in 2025, up from 1% in 2024, with the non-oil primary balance declining to -7.2% of GDP from -5.7% (IMF). Inflation remained high following a 44% exchange rate depreciation in June 2023 (the national currency fell by over 60% since then) and import substitution measures, which increased food production costs. Annual CPI inflation stayed elevated at 27.5% in December 2024, with food and non-alcoholic beverages contributing over 13 percentage points to the overall rate. In response, the central bank (BNA) raised its monetary policy rate by 150 basis points to 19.5% in 2024 and streamlined interbank liquidity management. Inflation is expected to continue easing as the supply shock fades, with annual CPI inflation projected to fall below 20% in 2025 and gradually align with the BNA's single-digit target over the medium term (IMF).
The authorities recognize that for Angola to achieve higher and sustainable growth, the economy must be diversified and new sources of growth identified beyond the oil sector. However, substantial infrastructure investment is necessary to drive long-term economic growth, create employment, and improve social services. In fact, inequalities and inflation are fueling dissatisfaction among the population. Only a third of the population has access to electricity, and although income per capita has been gradually increasing, especially in metropolitan regions, poverty and unemployment rates remain high. According to the National Statistics Institute (INE), the unemployment rate stood at 30.8% as of Q4/2024.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 109.68 | 113.29 | 118.41 | 124.17 | 133.22 |
| GDP (Constant Prices, Annual % Change) | 1.0 | 2.4 | 2.8 | 3.3 | 3.3 |
| GDP per Capita (USD) | 2,967 | 2,961 | 2,991 | 3,030 | 3,141 |
| General Government Balance (in % of GDP) | -1.5 | 0.8 | 0.3 | -0.0 | 0.2 |
| General Government Gross Debt (in % of GDP) | 73.7 | 59.3 | 52.1 | 44.8 | 38.6 |
| Inflation Rate (%) | 13.6 | 28.4 | 21.3 | 15.4 | 11.2 |
| Current Account (billions USD) | 4.19 | 3.79 | 1.83 | 1.63 | 1.72 |
| Current Account (in % of GDP) | 3.8 | 3.3 | 1.5 | 1.3 | 1.3 |
Source: IMF – World Economic Outlook Database, October 2021
Despite its potential, the agricultural sector in Angola remains underdeveloped and not very productive, contributing to 14.9% of GDP but employing 56.2% of the population (World Bank). Only about a third of Angola's arable land is utilized for harvests, and out of those, merely 100,000 out of 5 million arable hectares benefit from machinery and/or animal traction for sowing and harvesting. Angola's agriculture mainly consists of subsistence farming, with key industrial crops being coffee and cotton. The government has heavily invested in coffee, sugarcane, and ethanol production to diversify agricultural revenues and exports. As outlined in the National Development Plan 2023-2027, the Angolan Government has identified two main drivers to unlock the nation's agricultural capacity: the National Grain Plan (PLANAGRÃO) and the National Plan for the Promotion and Development of Livestock (PLANAPECUÁRIA). These initiatives aim to address the increasing need for food imports, specifically cereals for human and animal consumption, as well as poultry.
The industrial sector represents 45.3% of GDP and 5.6% of employment (World Bank). Angola stands as one of Africa's largest oil producers, a net producer of natural gas, and the second-largest producer of diamonds on the continent, surpassed only by Botswana. The Angolan economy is dominated by the oil and gas industry, which accounts for about 30% of its GDP and is the primary revenue source for the country (with more than 70% of government revenue and 90% of Angola's exports coming from oil activities). In addition to diamonds, the country also produces gold, granite, gypsum, marble, and salt, with numerous undeveloped minerals with potential for extraction, including beryllium, clay, copper, iron ore, lead, lignite, manganese, mica, nickel, peat, phosphate rock, quartz, silver, tungsten, uranium, vanadium, and zinc. The manufacturing sector is not well developed nor diversified, and accounts for around 8% of GDP (World Bank). According to the National Oil, Gas, and Biofuels Agency (ANPG), Angola's average daily oil production reached 1.134 million barrels in the first three quarters of 2024, increasing by 4% y-o-y.
The services sector (banking, communication, tourism) is also experiencing rapid growth, accounting for 39.8% of GDP and employing 38.2% of the population. Although tourism is growing, there is a severe shortage of hotels and other types of accommodation. The construction sector is booming, comprising around 9% of GDP. Telecommunications has seen significant growth, propelled by increased mobile phone penetration and investments in infrastructure. Banking and finance play a crucial role in supporting Angola's economy, with both domestic and international financial institutions operating within the country.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 56.2 | 5.6 | 38.2 |
| Value Added (in % of GDP) | 14.9 | 45.3 | 39.8 |
| Value Added (Annual % Change) | 2.7 | -1.0 | 1.8 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
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Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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