Angola Country Risk Report

Growth in Angola is expected to continue accelerating into 2025 at +2.8%, after +2.4% in 2024 due to an increase in oil production, which is expected to reach 1.2mn barrels per day (bpd) in 2024 and slightly higher at 1.3mn bpd 2025. Inflation is projected to be at 28.4% in 2024 and then to slow to 21% in 2025. Oil will remain the core of the Angolese economy. New oil fields have been coming online throughout 2024, with an expected 43 new wells. On top of that, momentum is building to increase value-added to oil exports with the coming online of the Cabinda refinery plant in April 2025, which should supply 5-10% of the country’s refined oil product’s needs. Currently Angola imports almost 100% of its refined oil products.

Together with mining and agriculture, gas is a growing driver of Angola's non-oil economy. Gas exporters via LNG are an important part ofthe country's diversification strategy even if they remain a small share of the economy. In late 2024, a new gas pipeline is projected to come online which should result into 6bn cubic meters (bcm) of natural gas produced annually in 2025, a small number compared to the 30bcm exported by Nigeria, the continent's biggest producer. Angole continues to have high potential for mining exports. Diamonds are currently the main export, but copper and iron ore mines should come online as new investments around the Lobito corridor are realized. Angola’s agriculture sector accounts for 10% of GDP, yet climate hazards continue to take a toll on agricultural output and reduce its capacity to expand. The southern part of Angola is currently facing a record-breaking prolonged drought that is reducing the region’s suitability for crop production, while some important domestically produced crops, including maize, bean and groundnut, will be heavily impacted. On the bright side, Angola has plenty of water resources that could be utilized to improve its food security.

President Joao Lurenço, first elected in 2017 in a contested election after the almost 40-year rule of President dos Santos, pushed for a regeneration of the political class by implementing some corruption reforms against selected individuals, including close allies of dos Santos and factions within the Angola’s ruling party, the Movimento Popular de Libertação de Angola (MPLA). Early on in the administration, Lurenço also relaxed limitations on the press and civil society. However, by 2024, he had imposed new restrictions on media and public protests, curbing democratic freedoms.

In parallel, President Lurenço has pushed for enhancing foreign investment in the country, given a decline in inflows since the 2015 peak. The relaunch of AIPEX in 2024, the country’s investment agency and the signing of an investment facilitation agreement with the EU aim to diversify Angola’s FDI inflows from hydrocarbons into minerals and metals. Angola is the EU’s sixth investment destination in Africa and it is set to become Africa’s first green hydrogen exporter to Europe when a new Angolese-German hydroelectric-powered green hydrogen project comes online in late 2024. The EU’s investment agreements should be viewed in the broader context of the Lobito corridor, an ambitious infrastructure project to construct and update 2,600km of rail and road lines connecting mineral rich regions of Zambia and the Democratic Republic of the Congo to the Lobito port on Angola’s Atlantic coast. The corridor’s financing exceeds USD2bn from the G7, the EU, the African Development Bank and a consortium of European companies. The project aims to integrate copper, cobalt and other precious metals into international supply chains essential for the energy transition.

Western nations’ efforts to develop the Lobito corridor stand in stark contrast to China’s substantial influence over the global metal supply chain, particularly given that China controls an estimated 70% of global cobalt processing. Historically, China has been a close ally of Angola due to their shared communist background. Amid the current geopolitical tensions between the US and China, Angola is strategically positioning itself to benefit from engaging with both sides. Additionally, countries like the UAE are also ramping up their investments in Angola, particularly in the metals and logistics sectors, further diversifying the nation's economic partnerships.

While there are prospects for a more dynamic economy, and a stable macroeconomic context, the reality on the ground is much more complex. Angola tops the list of countries in terms of income inequality and has one of the lowest rankings in human development indexes. Both purchasing power and educational attainment are significantly low. Indeed, purchasing power has seen an incredible shock during the last few years due to the increase in fuel prices. Regarding human development, a recent census found that 24% of adults aged 18–24 and 54% of adults aged 25–64 did not complete high school. There are fewer than 3% of college graduates among these adults and only 16% have completed elementary school, which reduces productivity and the construction of local expertise.