Angola and the AfDB

Cooperation between the African Development Bank (AfDB) and Angola dates back to 1983. As of November 2012, the Bank Group had financed 33 operations valued at approximately US $474 million. Bank-funded projects are primarily in the areas of agriculture and rural development, environment, water and sanitation, and multi-sector. The Bank’s support is moving towards a knowledge institution, provider of high level advisory services including regional integration and private sector development agenda.

GDP growth in Angola was 3.9 per cent in 2011 due to volatile oil production, persistence of external shocks and technical problems with Liquefied Natural Gas Production (LNG). Despite these challenges, growth prospects for 2012 are positive, with GDP expected to accelerate to 6.8 per cent. Oil prices, though declining, remain higher than budgeted and oil production is expected to rebound. The country is also set to benefit from the ambitious infrastructure program aiming to improve the country’s competitiveness and promote regional integration in the SADC and Central Africa regions. On the diversification of the economy, Government has been promoting food security, agriculture exports and import-substitution industries. In the medium term, non-oil growth is expected to grow with an annual average of 6.1 per cent against only three per cent for the oil sector. The inflation rate will move from 14.5 per cent in 2010 to 8.6 per cent in 2013 and credit to the private sector from 20.9 per cent in 2010 to 24.5 per cent in 2013.

The recent creation of the Angola Sovereign Wealth Fund and the corresponding strategic sovereign asset liability framework will help insulate the economy from volatile oil flows and external shocks. Government efforts to enable the structural transformation of the Angolan economy through the removal of infrastructure bottlenecks will strengthen the basis for sustainable medium-term growth. The rebalancing of the budget toward social and infrastructure spending will be the hallmark of the 2013 budget and beyond. Despite this, additional efforts to foster quality of vocational training and secondary education are needed to provide the right skills to private and public sectors development and promote job creation and income distribution.