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- GDP (PPP):
- $115.7 billion
- 3.4% growth
- 8.8% 5-year compound annual growth
- $5,895 per capita
- Inflation (CPI):
- FDI Inflow:
Angola’s economic freedom score is 47.3, making its economy the 158th freest in the 2013 Index. Its overall score has improved by 0.6 point, primarily because of better performance in government spending, trade freedom, and freedom from corruption. Angola is ranked 40th out of 46 countries in the Sub-Saharan Africa region, and its score remains far below world and regional averages.
Angola’s economic performance has improved since the end of the country’s civil conflict about a decade ago. Robust economic growth, facilitated by the booming oil industry, has encouraged economic rebuilding and helped to sustain macroeconomic stability. Structural reforms have progressed in areas such as modernization of the regulatory environment.
However, pervasive corruption and the lack of capable public institutions continue to undermine the successful implementation of other important reform policies. Tariff and non-tariff barriers, coupled with burdensome investment regulations, 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 over three decades. His party, the Popular Movement for the Liberation of Angola (MPLA), was scheduled to face parliamentary elections in August 2012, only the second such elections since the end of the 27-year civil war in 2002. A new constitution adopted in February 2010 eliminated executive elections and made the prime minister a vice president under presidential authority; the president will be selected by the party that wins the parliamentary elections. Angola is Africa’s second-largest oil producer. It also has many other natural resources, including gas, diamonds, good hydroelectric potential, and rich agricultural land. Nonetheless, Angolans remain largely 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.
Use of 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. Corruption is widespread among government officials at all levels. Investigations and prosecutions of misconduct by government officials are rare.
The top income tax rate is 17 percent. The top corporate tax rate is 35 percent, though the mining and oil industries are subject to rates as high as 50 percent. Other taxes include a fuel tax and a consumption tax. The overall tax burden equals 14.9 percent of total domestic income. Government spending is 36.3 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. Key sectors remain government-owned, and price controls are pervasive in many sectors, including fuel and electricity. Lower global commodity prices have eased inflationary pressures somewhat.
Customs procedures have been modernized, but tariff and non-tariff barriers to trade persist. Foreign investment is hindered by requirements for government approval in many industries. The banking sector has more than 20 banks in operation and continues to grow. Public utilization of banking services, however, remains low; only about 10 percent of the population maintains bank accounts. The capital market is underdeveloped.