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- GDP (PPP):
- $175.6 billion
- 4.2% growth
- 4.7% 5-year compound annual growth
- $7,203 per capita
- Inflation (CPI):
- FDI Inflow:
Angola’s economic performance has improved, facilitated by the booming oil industry. Increased economic dynamism has encouraged economic rebuilding and helped to sustain the overall advancement of economic freedom. Structural reforms have progressed in such areas as modernization of the regulatory environment.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 48.9 (up 1.0 point)
- Economic Freedom Status: Repressed
- Global Ranking: 156th
- Regional Ranking: 39th in Sub-Saharan Africa
- Notable Successes: Fiscal Freedom and Trade Freedom
- Concerns: Rule of Law and Regulatory Efficiency
- Overall Score Change Since 2012: +2.2
Pervasive corruption and the lack of capable public institutions continue to undermine the successful implementation of important reforms. Despite some progress, burdensome investment regulations continue to 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 (MPLA) 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, a region plagued by a separatist conflict. Oil production has more than doubled from about 800,000 barrels a day in 2001 to about 1.8 million barrels a day in 2015. In 2014, a French oil company invested $16 billion in an offshore project. Despite the country’s natural gas, diamonds, hydroelectric potential, and rich agricultural land, most Angolans remain poor and dependent on subsistence farming. Angola is a nonpermanent member of the United Nations Security Council for the 2015–2016 term.
The New York Times reported in 2015 that most state health care funds are stolen every year, fueling rising infant and child mortality. Government corruption and patronage remain endemic, especially in the extractive sectors. Bribery often accompanies business activity. The judiciary is subject to extensive political influence from the executive. Property registration legal fees can be prohibitively expensive. Protection of property rights is weak.
The top income tax rate is 17 percent. The top corporate tax rate is 30 percent, although rates for the mining and oil industries are as high as 50 percent. Other taxes include a fuel tax and a consumption tax. The overall tax burden equals 6 percent of total domestic income. Government spending amounts to 40.8 percent of GDP. The budget surplus is large due to oil revenue, but accounting shortfalls have created fiscal uncertainty. Public debt is moderate.
A more streamlined licensing process has made it easier to start a business, but the overall regulatory environment is still not conducive to entrepreneurial activity. The formal labor market is not fully developed. With significantly lower world oil prices dictating budgetary austerity, the government reduced fuel subsidies several times in 2015, pushing inflation higher.
Angola’s average tariff rate is 4.9 percent, and its trade and investment policies are less open than the global average. The state owns most land, and bureaucratic barriers deter foreign investment. The growing banking sector has more than 20 banks in operation. Public utilization of banking services, however, remains low; only about 10 percent of the population maintains a bank account. The capital market is underdeveloped.