ORSB – ANGOLA COUNTRY STRATEGY PAPER 2011 - 2015
budding manufacturing sector grew by 9
percent in 2009 and is predicted to
expand by a further 20 percent in 20106.
Large
investments
in
industrial
production are underway to satisfy the
booming
domestic
market.
The
construction sector, growing constantly
above 10 percent, will consume in 2010
an estimated 5 million tons of cement, of
which 80 percent is imported.
Figure 2 - GDP Composition
Macroeconomic Management
Source: National Bank of Angola (BNA)
AfDB Statistics Department. AEO (2008 data)
2.1.7 Excessive dependency on oil
tax revenues leaves the country
prone to fiscal shocks. Despite strong
non-oil sector growth, oil represents 95
percent of all exports. The non-oil sector
represents 42 percent of GDP, but only
contributes to 20.5 percent of fiscal
revenues. Oil revenues account for the
other 79.5 percent. After 5 years of
expansionary fiscal and monetary
policies, and an overvalued exchange
rate, Angola was vulnerable to a crash
in global oil demand. The 60 percent
abrupt decline in oil price from 2008 to
2009, compounded by OPEC cuts in oil
production, prompted a severe terms of
trade shock. The Angolan economic
model revealed its fragilities: growth
stalled; the fiscal balance became
negative; official reserves eroded nearly
by half in 6 months; the Kwanza
devalued by 20 percent. Investors’
confidence
plummeted.
Without
significant external financing channels,
the authorities faced a potentially
disruptive devaluation of its currency
with destabilizing social consequences.
The GoA resorted to the IMF settling an
agreement for a 27 month Stand-By
Arrangement (SBA) of US$ 1.4 billion
aimed at alleviating immediate liquidity
pressures, boost market confidence and
restoring a sustainable macroeconomic
2.1.6 A country endowed with other
extensive resources and full of
potential. Angola is the fifth largest
diamond producer in the world by value,
although diamonds represent only 1.1
percent of GDP. Gold, barite, iron,
copper, cobalt, granite and marble are
abundant, but their extraction remains
limited. Prior to independence Angola
was self-sufficient in food and an
exporter of cash crops, in particular
coffee and sugar. According to FAO,
Angola has the sixteenth largest
agricultural potential area in the world.
Yet it is presently not self-sufficient and
all crops have declined to near
insignificance as a mere 10 percent of
the arable land is cultivated. Agribusiness investments sponsored by
foreign companies and international
initiatives from IFAD and G8 are
blooming. The sector is expected to
grow above 11 percent in 2010/11. The
extensive
coastline
provides
an
estimated sustainable catch of 450,000
tonnes/year5. Yet, less than 50 percent
is fished, of which only a third is by
domestic
fishermen,
exclusively
artisanal. With a thriving internal
demand, stimulated by large public
spending, nearly 80 percent of all
consumed goods are imported. The
5
FAO 2007
6
4
Source: GoA Budget 2010