Luanda - The overall nominal Gross Domestic Product (GDP) projected for Angola for the 2023-2027 period is of roughly 70.3 billion kwanzas as an average, with non-oil sector expected to contribute AKz 59.3 billion (84.34 percent), as compared to the oil sector.
According to figures from the Angolan government presented at the first edition of the "Angola Economic Outlook - AEO," held Wednesday (26) in Luanda, it is estimated that the oil sector will contribute 11.8 billion kwanzas (15.66 percent) to total nominal GDP in the period under review.
In practical terms, the expected revenues from the production and sale of non-oil goods produced and services provided in Angola may significantly exceed the amount to be collected from the oil sector.
To achieve these forecasts, the performance of the non-oil sector should be assured by agriculture, livestock and forestry sectors, with 8.80%, fishing by-products (16%), industry (5.26%), construction (5.4%), trade (3.85%), energy (5.88%), transport and storage (13.22%), mail and telecommunications, with 12.52%.
Promoting growth of the non-oil sector will also require boosting credit to the economy, particularly for micro, small and medium-sized enterprises, to enable the private sector to be the driving force of economic growth, reads the note.
Additionally, this sector must be boosted through the implementation of medium-term planning instruments (programmes), namely Planapecuária, Planagrão and Planapesca.
These instruments also include the second phase of the Integrated Intervention Plan for Municipalities (PIIM 2), consolidation of the Privatisation Programme (PROPRIV) and the second phase of the cash transfer programme for vulnerable families, known as Kwenda 2.
With regard to the oil sector, it is estimated that production levels will contract less, stabilising at around 1,010 crude oil barrels/day until 2027, as a result of the implementation of a set of planned measures, such as the 2020-2025 Exploration Strategy and the General Strategy for the Allocation of Petroleum Concessions 2019-2025, which plans to allocate more than 50 concessions.
However, it is forecast that the GDP should record average annual real growth of around 3.68%, with average growth in the non-oil sector being 4.74%, while the oil sector, including gas, could reach 2.6%.
Macroeconomic Stabilisation
According to the forecasts, macroeconomic stability is expected to be maintained in the country, with inflation expected to drop to one digit from 2023, in order to ensure interest rates that are attractive to investment and aligned with the levels in the Southern African Development Community (SADC) region.
Although the medium-term forecasts express a certain optimism, there are still some risks that may emerge, both from the international and national contexts, namely international geopolitical tensions, reduction in the price of the crude oil barrel on international markets and an increase in financing costs on the world market.
The list includes the prospect of a systematic reduction in crude oil production levels, lower non-oil GDP growth, lower probability of reaching the revenue levels expected by the National Treasury and an increase in general price levels in the short term, due to the removal of fuel subsidies.
