population) had received at least one dose of a COVID-19 vaccine. ANGOLA Key conditions and Main challenges include a steeper and re- newed decline in oil production, limited challenges economic diversification, difficulty in at- tracting foreign direct investment in non- Table 1 2021 Angola remains excessively dependent on oil sectors, as well as Angola’s vulnerabil- Population, million 33.9 the oil sector. Although oil production ity to climate change. Moreover, food in- GDP, current US$ billion 81.8 declined by 39 percent since its peak in flation, already at high levels, will likely GDP per capita, current US$ 2410.8 2015, oil still accounts for 94 percent of be exacerbated by the increase in global a 49.9 International poverty rate ($1.9) exports as of 2021. This lack of diversi- commodity prices and economic uncer- a 71.5 fication reflects the legacy of macroeco- tainty triggered by the Russian invasion Lower middle-income poverty rate ($3.2) a 88.5 nomic instability, underinvestment in in- of Ukraine and associated sanctions and Upper middle-income poverty rate ($5.5) Gini index a 51.3 frastructure and human capital, and a supply disruptions. School enrollment, primary (% gross) b 113.5 challenging business environment. The b 61.1 decline in oil prices and production with- Life expectancy at birth, years out growth elsewhere in the economy Total GHG Emissions (mtCO2e) 112.5 translated into a cumulative GDP contrac- Recent developments Source: WDI, Macro Poverty Outlook, and official data. tion of 9.2 percent from 2015 to 2020, loss a/ Most recent value (2018), 2011 PPPs. b/ WDI for School enrollment (2015); Life expectancy of formal jobs, and an increase in pover- Angola exited the recession in 2021, with (2019). ty, which has been exacerbated in recent growth expected at 0.2 percent as agricul- years by high food inflation. ture and services growth offset continued Underinvestment in the social sectors declines in oil production. Oil exports Angola recorded marginally positive has resulted in low levels of schooling grew 60 percent while imports grew only GDP growth in 2021 following five con- and poor health outcomes, such that 23 percent, widening the current account. Angola is among the countries with the This, together with an SDR allocation of secutive years of economic contraction. lowest Human Capital Index (0.36 in US$1 billion, increased Angola’s net re- With oil prices expected to remain high, 2020). Angola is also highly exposed to serves, maintaining import coverage at the outlook for 2022 is favorable. Howev- climate risks, with parts of the coun- around eleven months. Non-oil exports er, despite improvements in macroeco- try continuously suffering from severe (wood, fish, granite, and beverages) re- drought, floods, and soil degradation mained small and volatile. nomic policies in recent years, a legacy of since around 2012. Largely because of higher oil prices, the underinvestment in physical and human Angola’s economy suffered from exchange rate appreciated 13.4 percent capital poses considerable challenges to COVID-19 indirectly through falling oil YoY by December 2021, recovering al- poverty reduction and economic diversifi- prices, but overall, the country has been most a third of the 2020 depreciation. cation, leaving Angola highly exposed to relatively resilient against the pandemic. The stronger currency has not translated As of February 14, 2022, Angola had 55.9 into lower inflation, which remains high risks from volatile oil prices, the pandem- at 27 percent, driven by high food prices COVID-19 deaths per million people ic, and climate change. (compared to 745.9 globally) and 10.9 mil- and the lagged effect of monetary mea- lion people (69.3 percent of the target sures from 2020. In response, the central FIGURE 1 Angola / Actual and projected public debt levels FIGURE 2 Angola / Actual and projected poverty rates and and primary balance real private consumption per capita Percent of GDP Percent of GDP Poverty rate (%) Real private consumption per capita (constant LCU) 10 150 100 30000 Public debt (RHS) Primary fiscal balance 90 25000 80 8 70 100 20000 60 50 15000 5 40 10000 30 50 20 3 5000 10 0 0 2008 2010 2012 2014 2016 2018 2020 2022 2024 0 0 International poverty rate Lower middle-income pov. rate 2019 2020 2021 2022 2023 2024 Upper middle-income pov. rate Real priv. cons. pc Sources: Angola Ministry of Finance, World Bank MTI. Source: World Bank. Notes: see Table 2. MPO 3 Apr 22 bank raised the reference rate from 15.5 of a projected 1.6 million vulnerable appreciation, the government is expected to 20 percent. families enrolled, 300,000 of whom have to miss its inflation target of 18 percent Higher oil receipts combined with buoy- received at least one transfer. due to rising global commodity prices ant non-oil revenues (especially VAT) led which particularly affect staple foods. fiscal revenues to grow about 47.5 percent Projections suggest that the share of the in 2021. Public spending growth, estimat- Angolan population living on less than ed at 18.6 percent, was driven by cur- Outlook US$1.90 per day (2011 PPP) will remain at rent spending as public investment grew 53.2 percent in 2022 as economic growth by 0.2 percent. Most additional oil rev- With soaring oil prices, GDP growth is ex- fails to keep up with population growth. enue was saved, increasing the primary pected at 2.9 percent in 2022. The non-oil This includes over 1.3 million people fac- surplus. This, together with currency ap- sector is expected to grow 2.3 percent, pro- ing severe hunger due to drought in some preciation and GDP growth, drove debt pelled by mining of diamonds and other of the poorest provinces in the country. levels from 130.5 to 88.1 percent of GDP minerals, the beverage and construction Meanwhile, the continued expansion of from 2020 to 2021. Consequently, bond industry, agriculture and fisheries, and the Kwenda program and improvements yields declined, and Angola’s credit rat- trade. With rising oil prices and a small but in non-oil sectors are expected to increase ing was upgraded. temporary recovery of oil production, oil the welfare of the poorest. Employment declined to 61.2 percent of sector growth is projected at 4.4 percent. The risks to the outlook arise from possible adults in Q4 2021 (from 62.8 percent a The 2022 budget keeps Angola on a path future waves or variants of COVID-19, oil year earlier), with the vast majority (81 of fiscal consolidation. The government is price volatility, and political uncertainty percent) employed in the informal sec- expected to increase the primary surplus resulting from the 2022 elections. In addi- tor. Food insecurity and poverty were from 7.3 percent of GDP in 2021 to 8.1 tion, escalating geopolitical tensions or cli- exacerbated by limited employment op- percent of GDP, further decreasing public mate-related natural disasters can further portunities and food inflation. After two debt levels to 74.2 percent of GDP. This, disrupt global value chains and fuel food years of stagnation, the minimum wage however, remains subject to oil price prices growth with potentially severe con- rose 50 percent against accumulated in- risks as non-oil revenues are expected sequences for the food security and wel- flation of 52 percent. The Kwenda cash to increase only gradually. Despite con- fare of vulnerable households. transfer program has about 500,000 out tinued monetary tightening and currency TABLE 2 Angola / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2019 2020 2021e 2022f 2023f 2024f Real GDP growth, at constant market prices -0.7 -5.5 0.2 2.9 3.1 3.3 Private Consumption -6.2 -4.0 6.6 3.1 4.7 4.3 Government Consumption -1.6 -7.1 6.5 2.8 2.5 4.4 Gross Fixed Capital Investment -1.9 -1.6 8.0 3.0 4.5 5.5 Exports, Goods and Services -5.9 -6.3 -10.8 4.3 1.3 -0.3 Imports, Goods and Services -11.0 -21.7 6.0 6.0 8.0 6.5 Real GDP growth, at constant factor prices -1.2 -6.7 0.2 2.9 3.1 3.3 Agriculture -1.3 2.4 12.2 6.5 7.0 6.8 Industry -3.6 -10.4 -9.1 0.8 -0.2 0.2 Services 2.2 -3.5 9.6 4.4 5.6 5.4 Inflation (Consumer Price Index) 17.1 22.3 25.6 20.0 12.3 9.5 Current Account Balance (% of GDP) 6.2 2.4 9.1 11.0 9.2 6.1 Net Foreign Direct Investment (% of GDP) -2.1 -3.3 -3.2 -0.2 0.5 0.8 Fiscal Balance (% of GDP) 0.8 -1.9 2.5 2.9 2.0 1.5 Debt (% of GDP) 119.6 130.5 88.1 74.2 68.3 64.6 Primary Balance (% of GDP) 6.5 4.9 7.3 8.1 7.7 6.5 a,b International poverty rate ($1.9 in 2011 PPP) 52.2 54.1 53.2 53.2 52.8 52.5 a,b Lower middle-income poverty rate ($3.2 in 2011 PPP) 73.0 74.2 73.6 73.7 73.4 73.2 a,b Upper middle-income poverty rate ($5.5 in 2011 PPP) 90.4 91.8 91.1 91.2 90.9 90.6 GHG emissions growth (mtCO2e) -5.0 -3.6 -1.5 -1.2 -0.4 -0.1 Energy related GHG emissions (% of total) 14.6 13.3 13.0 12.3 12.1 12.0 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. a/ Calculations based on 2018-IDREA.Projection using point to point elasticity at regional level with pass-through = 0.7 based on private consumption per capita in constant LCU. b/ Actual data: 2018. Nowcast: 2019-2021. Forecasts are from 2022 to 2024. MPO 4 Apr 22