The average percentage of companies in Sub-Saharan Africa identifying an unskilled workforce as a significant business constraint is 15%, yet in Angola, this figure nearly doubles, according to economists Carmen Avila-Yiptong and Zviad Zedginidze. Their analysis explores the main barriers to the country’s economic diversification.
“The latest World Bank Enterprise Survey shows that 26% of the companies surveyed see an inadequately educated workforce as a major business constraint in Angola,” they explain. They note that while Angola has heavily relied on oil, employment is primarily concentrated in the non-oil sector.
The economists emphasize that “unemployment and the percentage of employment in the industrial sector have remained stable,” despite increased oil production until the early 2010s. This suggests that this activity “did not result in robust job creation and labor market opportunities.”
Meanwhile, employment in the agricultural sector has been steadily increasing and now accounts for almost half of total employment, as noted in the document released to coincide with an IMF mission to Angola that concluded this week.
In analyzing potential corrective policies to support workforce development, the economists state that the high concentration in the informal sector (about 80% in 2024, according to National Institute of Statistics data) is precisely linked to the workforce’s limited education and skill levels.
To highlight the large proportion of underqualified workers in Angola, they recall that “the average years of schooling in Angola is 5.8 years. Although secondary school enrollment has reached 54 percent, less than a quarter of the population over 25 has completed secondary education.”
“In the future, educational outcomes will be particularly relevant for Angola’s economic diversification and resilience, given that 65% of the population is between 0 and 24 years old,” they stress.
Better human capital outcomes “translate into a more productive workforce that can meet the needs of higher value-added sectors and attract foreign investment,” the two analysts further emphasize.
Looking at the National Development Plan outlined by the Angolan government, the IMF analysts assess certain proposed measures and the increased education budget as positive but insufficient.
In the General State Budget for 2025, João Lourenço’s government allocated 2.2 trillion kwanzas (about 2.14 billion euros) to education-related expenses, “a modest increase over 2024,” representing approximately 2% of the Gross Domestic Product (GDP), “below the Sub-Saharan Africa average of 5.8% of GDP,” the analysts warn.
Authorities should “implement specific policies to bridge the skill gap in high-priority emerging sectors, aiming for more efficient public investment, and innovative and employment-relevant education and vocational training curricula that meet private sector needs,” they recommend.
The IMF experts also cite solutions implemented by developing economies that achieved “great success.”
“Aligning education outcomes to serve priority sectors,” as India did, “expanding technical and vocational education and training,” exemplified by Vietnam, and “coordinating human capital objectives with national economic development planning,” as South Korea did, are some of the cases noted.
