Country Report Angola April 2009

Outlook for 2009-10

• The ruling party, Movimento Popular de Libertacao de Angola (MPLA), has cemented its political hegemony following its resounding victory in the legislative election in September 2008, securing 81.6% of the national vote.
• The president, Jose Eduardo dos Santos, is likely to stand as the MPLA's candidate in the presidential election, which is expected to take place in 2010, to be followed by municipal elections.
• The main opposition party, Uniao Nacional para a Independencia Total de Angola (UNITA), will struggle to redefine itself after securing just 10.4% of the national vote in the legislative election.
• With oil production expected to fall in line with OPEC cuts, real GDP is forecast to contract in 2009 by an average of 2.3%, before recovering modestly in 2010 to 6.4%, in line with rising oil production.
• The high level of imports, coupled with the currency's expected depreciation, will keep inflation high, at an average of 11.3% in 2009 and 10.5% in 2010.
• The collapse in export revenue in 2009 will push the current account into a deficit of 3.5% of GDP, before a recovery in international oil prices and output restores the current account to a surplus of 1.6% of GDP in 2010.

Monthly review

• Pope Benedict XVI has visited Angola during his first tour of Africa as pontiff.
• The government has announced plans to resume the repatriation of around 200,000 Angolan refugees living in Angola's neighbouring countries.
• The government has announced spending cuts, including a 35% reduction in current spending and a 7.25% reduction in the public-sector wage bill.
• The government has secured a series of new credit lines, including US$1bn from China, US$1.7bn from Germany and 1m from Portugal.
• Portugal's largest bank, Caixa Geral de Depositos (CGD), and Angola's oil company, Sonangol, have announced plans to set up an Angolan investment bank in the second half of 2009.
• Angola's oil production seems to be holding steady at about 1.65m barrels/day (b/d), despite the imposition of an OPEC quota of 1.517m b/d in January.
• The impact of the global downturn on Angola's diamond sector is gathering pace, with the sector expected to shrink by up to 30% in 2009.
• Angola's foreign-exchange reserves have continued to fall, from a peak of US$20.4bn in November 2008 to US$16.5bn in February 2009, according to the latest data from the IMF.

This report covers the following industry codes:
SIC Code: 10
NAICS Code: 212

• Highlights
• Outlook for 2009-10: Domestic politics
• Outlook for 2009-10: International relations
• Outlook for 2009-10: Policy trends
• Outlook for 2009-10: Fiscal policy
• Outlook for 2009-10: Monetary policy
• Outlook for 2009-10: International assumptions
• Outlook for 2009-10: Economic growth
• Outlook for 2009-10: Inflation
• Outlook for 2009-10: Exchange rates
• Outlook for 2009-10: External sector
• Outlook for 2009-10: Forecast summary
• The political scene: MPLA congress is to take place in December
• The political scene: Opposition leader denounces delay in presidential election
• The political scene: Pope Benedict XVI visits Angola
• The political scene: Repatriation programme is to be relaunched
• The political scene: Democracy index: Angola
• Economic policy: Government starts to implement spending cuts
• Economic policy: Government seeks new sources of financing
• Economic policy: New tax incentives for gas exploration
• Economic performance: Angolan oil output holds steady
• Economic performance: Oil investment continues
• Economic performance: Downturn in diamond sector deepens
• Economic performance: Foreign-exchange reserves continue to fall
• Data and charts: Annual data and forecast
• Data and charts: Quarterly data
• Data and charts: Monthly data
• Data and charts: Annual trends charts
• Data and charts: Monthly trends charts
• Data and charts: Comparative economic indicators
• Basic data
• Political structure