Angola expects return to growth in 2020 due to ‘non-oil sector’
Angola’s GDP has contracted for the past three years and is expected to shrink again in 2019
Luanda — Angolan President João Lourenço expects Africa’s second-biggest oil producer to return to growth in 2020 as the government accelerates efforts to diversify an economy battered by a decline in crude prices and output.
“Angola’s economic crisis started in 2014 and got worse, not just because of lower oil prices but because the country is indebted and is honouring its commitments,” Lourenço said in a state of the nation address in parliament on Tuesday. “In 2020, we expect the economy to return to growth due to rising output from the non-oil sector.”
Angola’s GDP has contracted for the past three years and is expected to shrink 0.2% in 2019, according to the latest Bloomberg survey. Angola’s crude exports in November may fall to the lowest level in at least 11 years, according to the country’s loading programme. The drop has put a strain on a country that depends on oil for more than 90% of its exports.
Diversifying the economy and battling graft has been a cornerstone of what Lourenço has called a “new Angola” since taking power in the 27-million strong nation in 2017 from José Eduardo dos Santos, who ruled for 38 years.
Transparency International ranks Angola one of the world’s most corrupt nations.
Lourenço, a former army general, said there are 45 cases in court to recover more than $4.1bn allegedly stolen from the state. Authorities have also seized other sums of cash, cars and more than 70 properties, he said. Last year, Angolan law makers approved a law to allow for assets that were illegally acquired by public officials to be confiscated.
Angola is seeking to improve its finances after signing a three-year, $3.7bn loan agreement with the International Monetary Fund (IMF), Lourenço said. Some of the measures include the privatisation of dozens of state-owned entities or asset; the phasing out of subsidies on several products, such as refined fuel; and measures to ensure the sustainability of Angola’s debt, according to the IMF.
The plan, he said, is for public debt to decline to less than 60% of GDP in 2022 from about 90%.