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- GDP (PPP):
- $184.4 billion
- 3.0% growth
- 4.7% 5-year compound annual growth
- $7,344 per capita
- Inflation (CPI):
- FDI Inflow:
Angola’s natural resource wealth has helped to attract foreign direct investment and facilitate a decade of notable economic growth. However, the economy recently suffered a major structural shock as a result of lower oil prices, and oil revenues are uncertain. Monopolies and quasi-monopolies still dominate the leading sectors. Modest reforms have somewhat modernized the regulatory environment.
Pervasive corruption and the lack of capable public institutions continue to undermine the implementation of other important reforms. Tariff and nontariff barriers and burdensome investment regulations hamper development of a more dynamic private sector and interfere with diversification of the economic base.
José Eduardo dos Santos’s Popular Movement for the Liberation of Angola won parliamentary elections in August 2012, the second such election since the end of the 27-year civil war in 2002. Angola is Africa’s second-largest oil producer, with much of its proven reserves concentrated in Cabinda province, which is plagued by a separatist conflict. Despite the country’s oil, diamonds, hydroelectric potential, and rich agricultural land, most Angolans remain poor and dependent on subsistence farming. The slump in global oil prices has battered the oil-dependent economy. As part of its response, the government borrowed more than $11 billion between November 2015 and June 2016. Angola served as a nonpermanent member of the United Nations Security Council for the 2015–2016 term.
Protection of property rights is weak. Property registration is time-consuming and can be prohibitively expensive. The judiciary is subject to extensive political influence from the executive, and courts suffer from a lack of trained legal professionals, poor infrastructure, and a large case backlog. Government corruption is widespread. In June 2016, the president placed his eldest daughter in charge of Sonangol, the state-owned oil company.
The top income tax rate is 17 percent. The top normal corporate tax rate is 30 percent, but rates for the mining and oil industries are as high as 50 percent. The overall tax burden equals 6.5 percent of total domestic income. Government spending has amounted to 37.1 percent of total output (GDP) over the past three years, and budget deficits have averaged 3.7 percent of GDP. Public debt is equivalent to 62.3 percent of GDP.
Despite the recent implementation of more streamlined business start-up procedures, burdensome regulations still hinder private-sector development. Overall, the regulatory system lacks clarity, and regulations are enforced inconsistently. The formal labor market is underdeveloped. In 2016, the government ended subsidies and raised prices significantly on gas, asphalt, and heavy and light oil; it continues to subsidize electricity.
Trade is important to Angola’s economy; the value of exports and imports taken together equals 75 percent of GDP. The average applied tariff rate is 11.7 percent. Quotas on some products deter imports, and all land is owned by the government. Banking continues to expand, but public use of banking services remains low; only about 10 percent of the population maintains a bank account. The capital market is underdeveloped.