Overall, Angola’s economy has undergone a period of transformation in recent years, moving from the disarray caused by a quarter century of civil war to being the fastest growing economy in Africa and one of the fastest in the world, with an average GDP growth of 20 percent between 2005 and 2007. In the period 2001-2010, Angola had the world’s highest annual average GDP growth, at 11.1 percent. In 2004, China’s Eximbank approved a $2 billion line of credit to Angola. The loan is being used to rebuild Angola’s infrastructure, and has also limited the influence of the International Monetary Fund in the country.
The Economist reported in 2008 that diamonds and oil make up 60 percent of Angola’s economy, almost all of the country’s revenue and are its dominant exports. Growth is almost entirely driven by rising oil production which surpassed 1.4 million barrels per day in late 2005 and was expected to grow to over 2 million barrels per day by 2015. Control of the oil industry is consolidated in Sonangol Group, a conglomerate which is owned by the Angolan government. In December 2006, Angola was admitted as a member of OPEC.
Angola faces the daunting tasks of rebuilding its infrastructure, retrieving weapons from its heavily-armed civilian population and resettling tens of thousands of refugees who fled the fighting. Landmines and impassable roads have cut off large parts of the country. Many Angolans rely on food aid. Much of Angola’s oil wealth lies in Cabinda province, where a decades-long separatist conflict simmers. The government has sent thousands of troops to subdue the rebellion in the enclave, which has no border with the rest of Angola. Human rights groups have alleged abuses against civilians.
A supplier of crude oil to the US and China, oil exports and foreign loans have spurred economic growth and have fuelled a reconstruction boom. Angola has a rich subsoil heritage, from diamonds, oil, gold, copper, as well as a rich wildlife, forest, and fossils. Since independence, oil and diamonds have been the most important economic resource.
The economy grew 18% in 2005, 26% in 2006 and 17.6% in 2007. However, due to the global recession the economy contracted an estimated 0.3% in 2009. The security brought about by the 2002 peace settlement has led to the resettlement of 4 million displaced persons, thus resulting in large-scale increases in agriculture production. Before independence in 1975, Angola was a breadbasket of southern Africa and a major exporter of bananas, coffee and sisal, but three decades of civil war (1975-2002) destroyed the fertile countryside, leaving it littered with landmines and driving millions into the cities. The country now depends on expensive food imports, mainly from South Africa and Portugal, while more than 90 percent of farming is done at family and subsistence level.
Republic of Angola - Economy