Angola, the future powerhouse of Africa

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Angola’s oil production is second largest in Africa and has been rising continually since the end of the civil war in 2002. Economic growth is expected to reach 6.2% in 2013, and 7.3% in 2014, driven by the expansion in the oil and gas sector and a public expenditure programme designed to encourage economic diversification, which has been already growing quicker then the oil sector in the past 3 years. Angola is Africa´s third largest economy but the one with higher growth potential. Many say it will surpass South Africa as the strongest economic powerhouse in the continent.

Angola’s oil production is second largest in Africa and has been rising continually since the end of the civil war in 2002. Economic growth is expected to reach 6.2% in 2013, and 7.3% in 2014, driven by the expansion in the oil and gas sector and a public expenditure programme designed to encourage economic diversification, which has been already growing quicker then the oil sector in the past 3 years.

The Angolan government has embarked on ambitious reforms to improve governance but the business environment remains challenging in terms of institutions and infrastructure settings. The unemployment is another challenge as it remains significant at about 25%, and the incidence of poverty remains high at 36.6% of the population.

On the World Bank’s 2012 ease of doing business ranking Angola stands 172nd out of 183 nations, marking it out as one of the most difficult countries in sub-Saharan Africa in which to do business.

On the other side, at the moment still around 80% of all goods and services need to be imported, and that makes the opportunities for foreign companies to be vast.

Aguinaldo Jaime, head of Angola’s investment promotion!agency ANIP, says the key sectors into which he hopes to entice foreign investment include agriculture, fishing, transportation! infrastructure, energy, water, telecommunications and tourism.

The country is expected to continue with the rehabilitation of infrastructure, although the main strategic focus will shift from transport to the energy sector. Currently only an estimated 36.3% of the population has access to electric power and indeed the lack of electricity is considered one of the main constraints to business (68% of businesses rely on private diesel generators). Government will invest approximately USD 16 billion in the energy sector to 2015.

By : admin /January 23, 2014 /Angola, Insight /0 Comment

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