Angola Economy

Angola Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax System

Basic data

Angola has been in recession for the sixth year in a row, and economic growth is expected to take hold only in 2022. In 2021, the decline reached 1.6%, and in 2022, a slight increase of an estimated 2.5% is expected. The Angolan economy is still significantly dependent on oil production, with production in 2021 lower than the previous year, averaging just million barrels per day. In 2020, production averaged 1.28 million barrels per day, with the production quota set by OPEC at million barrels per day. In 2022, an increase in the production quota for all OPEC members is expected, which, in theory, Angola will not use to its advantage. International oil companies operating in Angola are limiting their activities and reducing investments in the modernization and expansion of production. Overall, oil exports also decreased in 2021 and negatively affected economic growth. Other economic activities also improved their performance thanks to efforts to diversify the economy, especially other mining (diamonds, building stones), construction and agriculture, but it was not enough to achieve economic growth. The average rate of inflation increased significantly in 2021 to an expected 25.8% due to the increase in prices of basic food, alcoholic and non-alcoholic beverages, tobacco, furniture and household goods especially during September and October. The Angolan president decided to respond to this by announcing a reduction in VAT on basic foodstuffs and industrial products from 14% to 7%. The central bank governor also raised the interest rate from 15.5% to 20% in response to high inflationary pressures and said he would maintain it until the inflation rate declines. Angola is struggling with high debt, which escalated with the onset of the global COVID-19 pandemic and in 2020 the public debt reached 136.5%. In 2021, the public debt was reduced by 10.5% to 123.5% of GDP. The average unemployment rate in Angola is 8.3%. Among the young generation, there are the most unemployed people, and the unemployment rate in this category reaches over 50%. Angola has one of the highest fertility rates in the world (an average of children per woman) and a large proportion of the young generation that lacks sufficient education and employment. Check ebizdir for economical facts of Angola.

The Angolan economy is significantly dependent on the oil sector, which currently accounts for 29% of the country’s GDP. This share has decreased from the original 40% in 2016, when there was a global crisis in the oil industry and a drop in the price of oil. Therefore, the Angolan president began to promote the diversification of the economy and the support of the so-called non-oil sectors, which primarily include agriculture, food, mining, construction and manufacturing. Among Angola’s main export commodities are oil (around 90%), diamonds, building stones, and agricultural crops and foodstuffs such as tropical fruits, fish, coffee, bottled water and beverages, including beer, are slowly gaining ground. From the point of view of imports, Angola’s long-term dependence on food imports, especially from Portugal, whose value reached USD billion in 2021, has prevailed.

Pointer 2019 2020 2021 2022 2023
GDP growth (%) -0.6 -4.7 -1.6 2.5 2.4
GDP/population (USD/PPP) 6,950.00 6,445.70 6,340.00 6,560.00 6,670.0
Inflation (%) 17.1 22.3 25.8 16.5 11.2
Unemployment (%) 7.4 8.3 ON ON ON
Export of goods (billion USD) 32.9 20.7 29.9 32.8 29.6
Import of goods (billion USD) 13.7 9.6 11.9 12.8 13.3
Trade Balance (Billion USD) 20.6 11.4 18.2 20.2 20.3
Industrial production (% change) ON ON ON ON ON
Population (millions) 31.8 32.9 33.9 35 36.2
Competitiveness ON ON ON ON ON
OECD export risk 06.VII 06.VII 06.VII ON ON

Source: EIU, OECD, IMD

Public finance and state budget

Public finance 2021
State budget balance (% of GDP) 1.4
Public debt (% of GDP) 123.5
Current account balance (billion USD) 8.39
Taxes 2022
AFTER 15-30%
F.O 0-17%
VAT 7%

State budget:
The new budget for 2022 was approved by the Angolan parliament on 14/12/2021 and it is expected to overcome the recession and further support the diversification of the economy. Total revenues are estimated at 1 trillion AOA (nearly $20 billion) and expenditures of the same amount to balance the budget. The oil sector still accounts for more than 60% of state budget revenues, but its impact on GDP is unpredictable due to fluctuating prices and declining production in the country. However, other sectors are expected to support the economy more significantly, with an emphasis on agriculture, fisheries, food, mining and construction. The main expenditure of the newly proposed budget includes public sector salaries which make up 23% of the budget, purchases of goods and services contributing 20% ​​and capital expenditure representing 17%. Payments for interest rates on public debt, which amount to 25% of total expenses, are also a significant expenditure of the state budget. The new budget also reflected the President’s decision to reduce the VAT rate from 14% to 7% from the beginning of 2022.

Balance of Payments:
The current account remained positive in 2021, reaching a record high of $8.398 billion. In 2021, exports increased by 54%, imports by 24%, as well as a deficit in the balance of services. An increase was also recorded in the financial account due to the inflow of foreign investment. Foreign exchange reserves reached 15,508.1 million USD in 2021 and guarantee 12.13 months for the import of goods and services.

Debt position: Angola’s total external debt reached USD 65.910 billion in 2021, representing an increase of 2% compared to 2020. This increase was mainly contributed by government debt (USD 46.97 billion) and debt of other sectors (8.01 billion USD). On the contrary, the debt of the central bank decreased (2.52 billion USD). Public debt reached 123.5% of GDP.

Banking system

The Angolan banking system has reached a relatively good level of development and is well developed. It is built on market foundations and is regulated by the Angolan central bank Banco Nacional de Angola (BNA). Since gaining its independence, the banking system has changed from a monopolized system to a market system, and at the same time there are a total of 29 banks in Angola.

In 2021, the BN governor increased the interest rate from 15.5% to 20% in response to high inflationary pressures and stated that he will maintain it until the inflation rate declines.

The largest and most important banks in Angola are the state-owned Banco de Poupança e Crédito (BPC), founded in 1976, the Banco de Comércio e Indústria (BCI, a subsidiary bank of the state-owned Sonangol) and two private banks, Banco Angolano de Investimentos (BAI) and Banco de Fomento Angola ( BFA). The newest banks founded in 2015 are Banco YETO, Banco de Investimento Rural, Banco Prestígio and Crédisul.

Overview of the most important banks in the country:

  • Banco de Poupança e Credito (BPC), Rua Rainha Ginga, Torre Elisée, Luanda –
  • Banco de Fomento Angola (BFA), Rua Amilcar Cabral 58, Luanda –
  • Banco Angola de Investimentos (BAI), Travessa Ho Chi Minh, Distrito Urbano de Maianga Torre Bai, Complexo Garden Towers, Luanda –
  • Banco de Commerce e Indústria (BCI), Mun. Da Ingombota, B. Coqueiros, Largo do Atlético nº 79/83, Rua Rainha Ginga, Luanda –
  • Banco Comercial Angolano (BCA), Rua Major Kanhangulo, 288, Luanda –
  • Banco de Desenvolvimento de Angola (BDA), Gaveto entre and Av. 4 de Fevereiro, nº 113 e Rua Robert Shields, nº3, Luanda –
  • Banco Económico (formerly Banco Espirito Santo Angola (BESA)), Rua 1º Congresso do MPLA nº 8, Ingombota – Luanda –
  • Banco de Negocios Internacional (BNI), Avenida Che-Guevara, nº 42 – A, Ingombota –
  • Banco Millennium Atlantico (BMA), Edifício ATLANTICO, Bloco 7/8, Condomínio, Cidade Financeira, Rua do Centro de Convenções de Talatona, Via S8, GU05B, Bairro Talatona, Distrito Urbano da Samba, Município de Belas, Luanda – https:/ /
  • Standard Bank de Angola, Condomínio Belas Business Park, Edifício Cuando Cubango, 8 Andar Talatona, Luanda –

Tax system

From the point of view of the evaluation of the tax system, Angola is above the average of the countries of sub-Saharan Africa. It is better, for example, in the Republic of South Africa or Namibia.

In Angola, there is a program to formalize small traders and entrepreneurs (PREI-Programa de Reconversão da Economía Informal), so that the Angolan Ministry of Economy and Planning has more control over the economy and achieves more tax collection. The introduction of Value Added Tax (IVA) from October 2019 at 14% also contributed to the support of tax revenues. However, from January 2022, the Angolan president decided to reduce VAT to 7%. The IVA replaced the so-called consumption tax, which was not applied to all products and services.

In September 2019, an amendment to the Personal Income Tax (IRT) Act No. 28/19 was published, which expanded the types of income subject to IRT taxation. Newly, Christmas and holiday bonuses will be included in the taxable income subject to IRT tax, and the income of people over 60 will also be newly taxable. On the contrary, it will continue to be the case that the income of individuals up to 34,000 kwanza (US$60.50) will not be taxed.

Tax overview:

  • Imposto sobre os Rendimentos do Trabalho (IRT) – personal income tax – progressive tax, 0 – 17%
  • Imposto Industrial – tax on business and industrial activity income – 30%,
  • tax on agricultural, aquaculture, poultry, livestock, fishing and forestry income – 15%
  • Imposto sobre Aplicação de Capitais – capital gains tax – 5%, 10%, 15%
  • Imposto sobre o Valor Accrescentado (IVA) – 7%
  • Imposto Predial Urbano – tax on the rent of buildings and also on buildings that are not rented – for rented buildings, the rate is 25% of 60% of the rents actually paid, i.e. in reality 15% of the rental value. For unleased buildings, 0.5% of the value above 5 million kwanza is paid
  • Imposto de Sisa – tax on long-term lease (over 20 years), sale of real estate, contributions in kind to the company’s share capital – 2%
  • Imposto de celo – stamp duty Imposto sobre Sucessoes e Doacoes – real estate and securities transfer tax – 10%, 15%, 20%, 30%

More information on taxes (in Portuguese) on the website of the Angolan Ministry of Finance.

Angola Economy