ORSB – ANGOLA COUNTRY STRATEGY PAPER 2011 - 2015
EXECUTIVE SUMMARY
1.
The Country Strategy Paper (CSP) for Angola for period 2011-2015, is the
culmination of 2 years of dialogue and heralds two landmarks in the relation
between the Bank and the country, namely: (i) Management has determined that
Angola is a Category - C country in line with the criteria laid out in the Bank Group Credit
Policy. Applying the new transition framework for graduating and reversing countries will
allow the country, as an MIC, to access non-concessional ADB resources as well as
concessional ADF resources during a transition period of two years; and (ii) the
forthcoming functional Angola Field Office. This CSP was prepared through an
extensive dialogue with the Government to ensure greater country ownership. The
report is also informed by lessons learnt from the Country Portfolio Performance Review
(CPPR) which is an annex to this report.
2.
The Angola context stands-out in the continent. On the one hand, it is a postconflict country with a fragile state apparatus, struggling with high poverty levels, a
deficient infrastructure network still being rebuilt, inefficient public administration and
dealing with challenging governance issues. On the other hand, it has a vibrant
economy which in less than a decade of peace has transformed the country from a low
income centrally-planned system to a middle income market economy. Despite its
numerous challenges, Angola is a thriving country with a booming economy and
legitimate aspirations to play a prominent role in Africa.
3.
After 27 years of conflict that ended in 2002, political stability and peace set
the ground for an economic boom fueled by increased oil production. Following
the 2010 constitutional review a presidential system has been formally instituted. José
Eduardo dos Santos, in power since 1979, will hold the presidency at least until 2012.
Angola’s growth rates from 2003 to 2008 averaged nearly 17 percent, placing it
repeatedly among the 3 fastest-growing economies in the World. By 2008 the “homegrown” macroeconomic stability plan brought inflation down from more than 70 percent
to 13 percent; built-up reserves to US$18billion, contained external debt at around 13
percent of GDP, and allowed the effective peg of the kwanza to the dollar.
4.
The excessive dependency on oil tax revenues leaves the country prone to
terms of trade and fiscal shocks. Oil represents 95 percent of all exports and
accounts for 79.5 percent of fiscal revenues. Despite the financial strain of the
expensive reconstruction plan and the strong investment to bolster the provision of
basic public services, particularly in the social areas, oil revenues assured consecutive
fiscal surpluses from 2003 to 2008. The world economic crisis in 2009 curbed oil
demand and generated a terms of trade shock. The country had negligible growth and
suffered a fiscal crisis. The GoA signed with the IMF a Stand-By Arrangement of US$
1.4 billion aimed at alleviating immediate liquidity pressures, boosting market
confidence, and restoring a sustainable macroeconomic position. The reform agenda
aims to bolster medium-term structural fiscal soundness through non-oil sector growth.
In 2010 Angola is expected to resume growth at 5.9 percent.
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