2020 Index of Economic Freedom

Angola

OVERALL SCORE52.2
WORLD RANK154
Rule of Law

Property Rights36.9

Judicial Effectiveness14.3

Government Integrity15.1

Government Size

Tax Burden87.3

Government Spending85.7

Fiscal Health71.9

Regulatory Efficiency

Business Freedom57.7

Labor Freedom61.1

Monetary Freedom59.6

Open Markets

Trade Freedom66.2

Investment Freedom30.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 29.3 million
  • GDP (PPP):
    • $199.3 billion
    • -1.7% growth
    • 0.3% 5-year compound annual growth
    • $6,814 per capita
  • Unemployment:
    • 7.3%
  • Inflation (CPI):
    • 19.6%
  • FDI Inflow:
    • $-5732.5 million

Angola’s economic freedom score is 52.2, making its economy the 154th freest in the 2020 Index. Its overall score has increased by 1.6 points, with a sharp increase in the score for fiscal health just outpacing a sharp drop in judicial effectiveness. Angola is ranked 35th among 47 countries in the Sub-Saharan Africa region, and its overall score is slightly below the regional average and well below the world average.

Angola’s economy was considered repressed for many years until 2019, when it barely squeezed into the mostly unfree category, and its improvement continues this year. Nevertheless, GDP growth has been stagnant or negative for the past five years, and the country’s economic prospects remain poor.

For Angola to begin making real strides toward greater economic freedom, the government will have to address severe failings in the country’s rule of law and also make substantial progress in the areas of investment freedom and financial freedom.

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Background

When former President José Eduardo dos Santos stepped down in 2017 after 38 years in power, former Defense Minister João Manuel Gonçalves Lourenço from dos Santos’s ruling Popular Movement for the Liberation of Angola was elected president. Lourenço quickly moved to terminate the dos Santos family’s control of the Sonangol state oil company and Angola’s sovereign wealth fund. Angola is one of Africa’s largest oil producers, but production problems have contributed to a decline in crude oil exports, which have fallen to their lowest level in more than a decade. Despite the country’s oil, diamonds, hydroelectric potential, and rich agricultural land, most Angolans remain poor and dependent on subsistence farming.

Rule of LawView Methodology

Property Rights 36.9 Create a Graph using this measurement

Judicial Effectiveness 14.3 Create a Graph using this measurement

Government Integrity 15.1 Create a Graph using this measurement

Land grabbing, difficulties in completing land claims, and the lack of reliable government records weaken the protection of property rights. The president appoints Supreme Court judges for life without legislative input. Corruption and political pressure undermine judicial independence. Government corruption and nepotism are widespread, and predatory elites tend to disrupt or co-opt emerging new businesses.

Government SizeView Methodology

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 9.2 percent of total domestic income. Government spending has amounted to 21.8 percent of the country’s output (GDP) over the past three years, and budget deficits have averaged 2.8 percent of GDP. Public debt is equivalent to 88.1 percent of GDP.

Regulatory EfficiencyView Methodology

Although the government has improved its monitoring and management of power outages, the overall business operating environment remains difficult. The economy is extremely vulnerable to global oil price volatility, and the formal labor market is underdeveloped. The government has taken steps to reform fuel, electricity, and water subsidies but has increased some agricultural and fisheries subsidies.

Open MarketsView Methodology

The total value of exports and imports of goods and services equals 52.3 percent of GDP. The average applied tariff rate is 9.4 percent. Nontariff barriers significantly undercut the benefits of trade. Sectoral restrictions and a nontransparent investment framework continue to limit foreign investment. Public use of banking services remains low, and the capital market is underdeveloped.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius74.91.9
2Rwanda70.9-0.2
3Botswana69.60.1
4Seychelles64.32.9
5Cabo Verde63.60.5
6Tanzania61.71.5
7Namibia60.92.2
8Madagascar60.53.9
9Côte d'Ivoire 59.7-2.7
10Uganda59.5-0.2
11Ghana59.41.9
12South Africa58.80.5
13Senegal581.7
14Nigeria57.2-0.1
15Burkina Faso56.7-2.7
16Gabon56.70.4
17Guinea56.50.8
18The Gambia56.33.9
19São Tomé and Príncipe 56.22.2
20Mali55.9-2.2
21Mauritania55.3-0.4
22Eswatini55.30.6
23Kenya55.30.2
24Benin55.2-0.1
25Niger54.73.1
26Lesotho54.51.4
27Togo54.13.8
28Comoros53.7-1.7
29Cameroon53.61.2
30Ethiopia53.60.0
31Zambia53.5-0.1
32Guinea-Bissau53.3-0.7
33Djibouti52.95.8
34Malawi52.81.4
35Angola52.21.6
36Central African Republic50.71.6
37Mozambique 50.51.9
38Chad50.20.3
39Democratic Republic of Congo49.5-0.8
40Liberia49-0.7
41Burundi490.1
42Equatorial Guinea48.37.3
43Sierra Leone480.5
44Sudan45-2.7
45Zimbabwe43.12.7
46Republic of Congo 41.82.1
47Eritrea38.5-0.4
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