After the golden decade, from 2002 to 2013, when the GDP reached a growth of 12%, Angola’s economy suffered a setback, especially in recent years, due to the collapse in oil prices. Specifically, in 2015, the GDP grew by 2.8%, a much lower value than the 4.8% attributed to the country by the World Bank in 2014.
Debt has grown, development has stalled and the economy experienced a sharp fall. According to forecasts, the GDP will not exceed 4% until 2019. Last year, the rate of inflation reached almost 14%, turning back the hands of time to a bygone era. The double-digit growth in overall prices was a faded memory. Even the currency, similarly to the country, is fading. The kwanza, in one year alone, has lost 30% of its value compared with the dollar, so much so that the 5 billion of the Fundo Soberano de Angola [sovereign wealth fund of Angola] quickly evaporated and the country was forced to knock on the doors of the International Monetary Fund, confirming itself to be caught in the raw material-economy trap and to be completely dependent on oil.
While before the oil price crisis there was talk of a country on the rise and of the capital, Luanda, as being the future Dubai, the impact of that crisis is now being felt in the economy and in the health sector. Angola is perhaps the Sub-Saharan African country that pays more than any other for its dependence on raw material exports. Also, according to OPEC, 45% of the gross domestic product comes from the oil and gas industry.
The collapse in oil prices has led to a rapid decline in U.S. dollar flows to Angola and to the decrease in value of the local currency, the kwanza. In a country in which many essential goods are imported, this has led to a steep rise in prices of even basic necessities.
According to the World Bank, a slight increase in economic growth was expected in 2017. Their prediction came true, especially compared to 2016, with further growth in the Angolan economy of 1.6% forecast for 2018. The government remains firmly committed to strengthening fair growth and to industrial diversification, as necessary measures to reduce vulnerability to external shocks. Agriculture remains one of the main sectors for development, especially as it could play a vital role in boosting exports.
After oil, diamonds are the second most exported good from Angola. Production grew rapidly until 2006, when it reached a volume of 9.2 million carats. Since then, production has stabilized between 8.2 and 9.2 million carats, while in 2015 it increased by 4% and reached the fixed amount of 9 million carats. However, this industry is potentially booming as, so far, only 40% of diamond mineral resources have been discovered.
Along with the precious stones, the entire non-oil sector has avoided an economic meltdown. According to the World Bank, revenues in the country fell by approximately 11 percentage points of the GDP in 2015. Global oil revenues fell from 23.8 percentage points to 12.6 percentage points, while non-oil revenues recorded a slight increase, although, to date, they are still very far from being able to offset the reduction in oil revenues. Finally, again to counteract the fluctuation in the price of black gold, the government increased excise duty on products, particularly on luxury goods, and, in 2016, also introduced a fuel tax.