Angola’s economy has begun recovering from the shock caused by the COVID-19 pandemic. Real GDP growth is projected to improve from an annual average of -1.9% for 2019 to 2021, to 3.0% in 2022. Inflation is projected to increase from an annual average of 21.7% for 2019 to 2021, to 23.9% in 2022. The elevated inflation is caused by the sanctions against Russia which have increased the price of crucial imports. In the medium-term period from 2023 to 2025, real GDP growth is projected to increase to an annual average of 3.7%. Meanwhile, inflation is projected to decrease to an average of 10.5% over the medium-term from 2023 to 2025.
The Government of Angola’s debt has begun moderating after increasing in 2020. Angola’s gross public debt is projected to decrease from an annual average of 112.2% of GDP for 2019 to 2021, to 57.9% of GDP in 2022. The decrease in public debt is largely due to the Government of Angola implementing fiscal austerity as the economy recovers from the shock caused by the global lockdown response to the COVID-19 pandemic. The fiscal surplus is projected to widen from an annual average of 0.6% of GDP for 2019 to 2021, to 3.1% of GDP in 2022. This shows the commitment to fiscal austerity despite improved revenues underpinned by the recovery in real GDP growth. In the medium-term period from 2023 to 2025, the fiscal surplus is projected to narrow to an annual average of 0.6% of GDP. Therefore, public debt is projected to decrease to an average of 49.5% of GDP over the medium-term from 2023 to 2025.
Angola’s external sector was severely affected by the COVID-19 pandemic in 2020 but the sector has begun recovering due to the rebound in commodity prices, particularly oil prices which have a significant impact on export earnings. Angola’s current account surplus is projected to widen from an annual average of USD 4.8 billion (approx. 6.3% of GDP) for 2019 to 2021, to USD 13.8 billion (approx. 11.0% of GDP) in 2022. In the medium-term period from 2023 to 2025, the current account surplus is projected to narrow to an annual average of USD 4.2 billion (approx. 3.1% of GDP). This illustrates a short-lived improvement in the current account balance due to the current rebound in commodity prices which is primarily driven by the impact of sanctions against Russia on global oil prices. Therefore, Angolan authorities will have to take advantage of the current reprieve and invest in further diversification of the country’s exports away from the continued reliance on oil.
Angola is scheduled to hold its national elections in August 2022 and the election campaigning cycle is currently underway. The SADC Electoral Advisory Council (SAEC) conducted post-election reviews aimed at assessing the implementation of the recommendations of the SADC Electoral Observation Mission and assessing the level of preparedness for elections in Angola. The SEAC mission to Angola paid a courtesy call to the Minister of External Relations on 9 March 2022 and held consultations with various stakeholders on 10 March 2022. Incumbent President H.E. João Manuel Gonçalves Lourenço is vying for a second term in office using his anti-corruption rhetoric.
The current political climate remains relatively calm despite pressures to ensure that all Angolans benefits from the mainstays of the economy, from which they have been predominantly excluded under the three-decades’ rule by former President José Eduardo dos Santos. President H.E. João Manuel Gonçalves Lourenço will also seek to play a more meaningful role in resolving conflicts in neighbouring states such as the Democratic Republic of Congo and the Central African Republic. This remains the central aim in Angola’s regional priorities as a member of SADC and the International Conference on the Great Lakes Region.