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Angola

Beyond oil score(out of 100 points) 22.0
Index ranking(out of 26 countries ranked) 26
Overall status*  
General Economic Framework  
Political Framework  
Society and Future Skills  
(Beyond) oil related factors  


According to the Oil and Gas Journal (OGJ), Angola had proven oil reserves of 5.4 billion barrels as of January 2006. Oil production and its supporting activities, contribute about 45% to GDP and more than half of exports.

Beyond-oil investments to drive future growth

Angola is one of the poorest countries of the African continent. Despite being rich in mineral resources such as gold, diamonds, extensive forests, Atlantic fisheries, and large oil deposits, 27 years of civil war between the National Union for the Total Independence of Angola (UNITA) and the ruling Popular Movement for the Liberation of Angola (MPLA) reduced angola’s economic status. The civil war which finished in 2002 destroyed lives, economic assets whilst sapping the country’s small financial resources. The problem of civil war was worsened by corruption, and lack of fiscal disclipine, which entailed massive off the budget spending by the government. To date Angola continues to suffer from problems such as unemployment and poverty, despite major financial gins from the rise of oil prices. This was confirmed in a recent report by the IMF. The Angolan government has scored well in its fight against inflation. Angola has also been successful in its exchange rate stablisation program. However corruption remains a major problem. Angola is ranked as one of the most corrupt countries of the world, by Transparency international’s 2005 survey. There is no solid evidence to suggest that this problem will be tackled in a noticeable way in the next number of years. Furthermore, the Angolan economy is very investor unfriendly as confirmed by the Heritage Foundation’s freedom to do business survey. This will continue to deter investors from entering the country. Currently economic priorities for the Angolan government are 1) rebuilding the war damaged infrastructure and 2) development of angola’s agriculture sector. Angola will continue to rely on oil and diamond exports as its main income generators for the foreseeable future.

Beyond Oil Summary

Angola’s low ranking in the Beyond Oil index is due to the lack of non oil industries in the country. due to corruption and lack of government planning, Angola currently is not ready to run its economy in the absence of oil. Due to lack of forward planning and effective investment in the non oil sector, angola’s Beyond Oil future seems bleak. It is very true that the Angolan government has had to manage under enormous pressures imposed on it by many years of civil war, nevertheless, lack of action in areas such as corruption, and liberalisation of the economy will continue to hamper the growth of the Angolan economy. These problems will become even more acute, if price of diamond, which is Angola’s second biggest export, crashes in the international market.

  Indicates high preparedness   Indicates deficits but potential for development   Indicates unfavourable preconditions.
 
     
   
 
 
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