ANNUAL REPORT 2016
Situation in Angola
Following a modest economic growth of around 0.9% in 2015, the IMF’s
forecast indicates a stagnation in 2016, with a contraction of 0.5% in
the non-oil sector, as a result of the weak performance in the cons-
truction, services and manufacturing sectors, which are faced with a
limited ability to replace the import of goods because of the scarcity
of imported raw materials, due to the limited availability of foreign
currencies.
Annual inflation should reach 42% at the end of 2016, reflecting the
increase in the prices of fuel and the sharp devaluation of the Kwanza.
The current economic and financial situation is the direct consequence
of the drop in the price of oil which began in the middle of 2014, which
considerably reduced tax revenue and exports and, as such, accelerated
the devaluation of the currency and the increase in inflation, causing
growth to come to a halt, namely public investment.
It is an absolute priority for the future of Angola to be able to take firm
steps to amend the excessive dependence on the oil sector, through sus-
tained programmes for diversifying the economic sectors, with a special
emphasis on agriculture and manufacturing, reducing the structural
vulnerabilities in the economy.
The outlook for 2017 is a little more encouraging. The National As-
sembly approved a moderately expansionist budget, contemplating an
increase in the investment in infrastructures, without however overloo-
king budgetary discipline in fighting non-productive expenditure and
waste. Some recovery in the average price of the barrel of oil can be
seen in the oil sector as well as a slight decrease in daily production, in
line with the strategy defined by OPEC.
29
