Africa Oil & Gas: Angola to remain dependent on oil to grow, EIU says

Sonangol buildings
Sonangol Headquarters, Angola

Angola’ss economic growth will remain dependent on oil in coming years due to weak economic diversification, with the Economist Intelligence Unit (EIU) forecasting an average growth rate of 2.5% in 2017-2021, compared with a 4.7% increase between 2011 and 2015.

The EIU’s latest report on Angola said that after zero real growth in 2016, the growth rate of the Angolan economy will fluctuate between 2.7% this year and in 2021, 2.4% in 2018 and 2019 and 2.5% in 2020.

The document added that with Angola’s economy still adjusting to a low oil price environment, the economic growth recorded will be the result of increased public spending and private consumption.

The EIU noted that the implementation of investments outside the oil and gas sector will continue to be hampered by the absence of reforms, the high level of bureaucracy and the “apparent increase in arrears to companies providing services to the State.”

EIU analysts pointed out that economic growth could be higher if the new President of the Republic approves structural reforms as suggested by International Monetary Fund experts.

“This scenario should, however, be unlikely, given that it would tend to cause disenchantment among the ruling elite and pose a long-term threat to social stability,” the report said. (Source: Macauhub)

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