Angola has “high” potential economic growth, even at a stage when its oil production accounts for a smaller slice of the economy, as well as the ability to become a “regional powerhouse in Africa,” according to Portuguese bank BPI.
According to BPI, which is the main shareholder of Angolan bank Banco de Fomento Angola, following a period f rapid expansion after the end of the civil war (2002), China’s main trading partner in Africa will “probably face a period of more moderate growth,” over the next few years.
The production sectors with potential to grow are many, including agriculture and fishing as well as exploration of natural resources other than oil and diamonds and that are “expected to continue attracting investment and may become the next drivers of the country,” said BPI in its latest report on Angola.
The sectors that are expected to grow also include retail, “as a result of demographic growth and sectors exposed to investment in infrastructure, such as construction and electricity.”
“The geographical position of the country, the rate of demographic growth, the focus on universal education and institutional efforts to develop the local economy are some of the factors upon which this optimistic scenario is based,” the document said.
Despite the challenges with creating jobs, social and economic indicators have seen “significant progress,” in a decade of peace, including the “substantial development of the population’s average income, as well as indicators of extreme poverty.”
BPI forecasts growth of 5.6 percent for the Angolan economy this year, and 6.3 percent in 2014.
This is the most conservative of the current growth estimates for this year, which from the IMF is 5.6 percent, 6.8 percent from the Economist Intelligence Unit, and all of which fall below the figure outlined in the State Budget – 7.1%.
The non-oil sector has been growing and will continue to do so at a stronger rate than the oil sector – 7.3 percent in 2013 and 9.7 percent in 2014.
Angolan oil production has risen from 1.66 million barrels per day in 2011, to 1.86 million per day in 2013 and is expected to rise to 1.91 million barrels in 2014.
Estimates from international organisations for Angola’s economic growth point to variations of between 5 and 6 percent over the next few years.
In the report, BPI also noted the “significant efforts” made by the Angolan government to improve the management of state accounts, which has “increased the credibility of the country on the international panorama, favouring the attraction of foreign investment.”
“Macroeconomic stability will be directly related to this demonstrated ability to ensure greater transparency, which is a determining factor in Angola’s economic growth,” it said.