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- GDP (PPP):
- $128.3 billion
- 8.4% growth
- 6.3% 5-year compound annual growth
- $6,347 per capita
- Inflation (CPI):
- FDI Inflow:
Angola’s economic freedom score is 47.7, making its economy the 160th freest in the 2014 Index. Its overall score has improved by 0.4 point due to improved scores in fiscal freedom, investment freedom, and business freedom. Angola is ranked 39th out of 46 countries in the Sub-Saharan Africa region, and its score remains far below world and regional averages.
Over the 20-year history of the Index, Angola has advanced its economic freedom by 20.3 points, one of the 10 best improvements. Angolans enjoy enhanced freedom in seven of the 10 economic freedom categories, including monetary freedom and trade freedom. Grading of Angola had been temporarily suspended from 2001 to 2005, and much of its notable progress over the history of the Index has occurred since 2006 when the Index resumed assessing Angola’s economic freedom.
However, the lack of capable public institutions and weak rule of law continue to undermine the successful implementation of other critical reforms. Tariff and non-tariff barriers, coupled with burdensome investment regulations, continue to hamper development of a more dynamic private sector and interfere with diversification of the country’s economic base.
José Eduardo dos Santos has been president of Angola for more than three decades. His Popular Movement for the Liberation of Angola (MPLA) won parliamentary elections in August 2012, only the second such elections since the end of the 27-year civil war in 2002. Angola is Africa’s second-largest oil producer, with many of its proven reserves concentrated in Cabinda province, a region plagued by a long-standing separatist conflict. The country also has natural gas, diamonds, good hydroelectric potential, and rich agricultural land. Nonetheless, Angolans largely remain poor and dependent on subsistence agriculture. Corruption and public-sector mismanagement are endemic, particularly in the oil sector, which accounts for approximately 85 percent of GDP and 80 percent of government revenue.
Corruption is widespread among government officials at all levels. Investigations and prosecutions of government officials are practically nonexistent. Recourse to the judicial system is discouraged by time-consuming procedures and the appearance of extensive executive influence on outcomes. Legal fees and property registration can be prohibitively expensive, and the overall protection of property rights is weak.
Angola’s top individual income tax rate is 17 percent, and the top corporate tax rate is 30 percent. Taxes on petroleum industry income can reach as high as 68 percent. Other levies include fuel and consumption taxes. The overall tax burden equals 6.1 percent of total domestic income. Public spending is 38.6 percent of GDP, and public debt remains below 30 percent of GDP.
Reform measures in recent years have streamlined the procedures for establishing a business, but start-ups are discouraged by other institutional deficiencies such as pervasive corruption and very limited access to credit. The labor market remains underdeveloped. The government influences prices through state-owned enterprises, subsidies, and agriculture-support programs. Price controls are pervasive in many sectors, including fuel and electricity.
Angola has a 7.4 percent average tariff rate. There are some restrictions on agricultural imports, and government procurement policies favor domestic industries. Foreign investors face bureaucratic and legal obstacles. Public utilization of banking services remains low, and only about 10 percent of the population maintains a bank account. The capital market is underdeveloped.