The Angolan economy urgently needs to establish a consistent path for robust growth to address nearly a decade of stagnation and improve conditions for poverty reduction, said Juan Carlos Alvarez during the presentation of the World Bank report on Angola’s economy.
“There is optimism that the comprehensive economic reforms currently implemented by the Government will yield positive results and unlock the country’s potential,” he added, noting, however, that “the country must intensify its support to key sectors that can contribute significantly to the essential process of economic diversification.”
At an economic forum in Luanda today, the World Bank will present three reports on Angola: the update on Angola’s economy, the economic memorandum, and another dedicated to the role of the private sector in the development of this Portuguese-speaking African economy.
Entitled ‘Boosting Growth with Inclusive Financial Development,’ the analysis of the Angolan economy highlights the strong growth of 4.4% last year, the highest since 2014, driven by oil, diamonds, trade, and fishing, but which comes after nearly half a decade of economic recession, and this year, growth is projected to slow to as low as 2%.
“From 2016 to 2020, the economy contracted approximately 10.4%, with an average annual decline of 2.1%; this slow growth resulted from structural challenges and heavy reliance on the oil sector, making it susceptible to fluctuations in global prices,” the World Bank states, adding that “real GDP growth is expected to average 2.9% from 2025 to 2027, but it is unlikely to significantly improve living standards.”
The report emphasizes the importance of promoting inclusive financial development in Angola to combat the significant inequality and exclusion, especially in rural areas, where access to formal banking services is limited, warning that “compared to other countries in the region, Angolan households have less access to credit, savings, and digital financial services.”
Financial inclusion, World Bank economists argue, “can drive economic participation and resilience, leading to sustainable growth and poverty reduction.”
Among the recommended reforms to improve access to formal finances and promote financial sector growth, the World Bank suggests the development of intuitive and accessible digital payments in more rural areas, the promotion of credit to small businesses, the development of the Financial Action Task Force action plan, combating money laundering and terrorist financing (AML/CFT), and increasing access to insurance for individuals and businesses, particularly insurance related to the impact of climate change.
