Country Report Angola June 2009

Outlook for 2009-10

• The ruling party, Movimento Popular de Libertacao de Angola (MPLA), is set to continue its dominance of the political system, by virtue of its control of government resources and overwhelming majority in the National Assembly.
• The president, Jose Eduardo dos Santos, is likely to stand as the MPLA's candidate in the presidential election, which is expected to be delayed until 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 2008 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 in 2010 to 6.4%, in line with rising oil production.
• The high cost of imports, coupled with the currency's expected depreciation, will keep inflation high, at an average of 12.3% in 2009 and 10.7% in 2010.
• The collapse in export revenue in 2009 will reduce the current-account surplus to 5.3% of GDP, before a recovery in international oil prices and output boosts the surplus to 8.7% of GDP in 2010.

Monthly review

• The five political parties with seats in the National Assembly have presented their proposals to the commission charged with revising Angola's constitution, prior to a public consultation to be held later this year.
• Angola is seeking to boost ties with Russia, with a series of new economic co-operation agreements and the planned visit of the Russian president, Dmitry Medvedev, to Angola in late June.
• The government is having major problems attracting new financing through the sale of three- and four-year bonds.
• The government is expected to implement swingeing spending cuts in the 2009 budget in response to sharply lower oil output and international prices, cutting total spending from an initially planned Kz3.1tr (US$38.7bn) to Kz2.6tr.
• The government has continued to give mixed signals about its OPEC quota, which is believed to be 1.517m b/d, amidst rising evidence that it is exceeding its quota by a wide margin, with exports set to reach 1.8m b/d in June.
• Angola's state-owned telecommunications company, Angola Telecom, has announced plans to invest US$2.4bn in expanding the country's fixed-line network over the next five years.

This report covers the following industry codes:
SIC Code: 60;49
NAICS Code: 52;22