Country Report Angola October 2009

Outlook for 2010-11

• The ruling party, the 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 unlikely to take place before late 2010 and could be delayed until as late as 2012.
• The main opposition party, the Uniao Nacional para a Independencia Total de Angola (UNITA), has little chance of winning a presidential contest and will focus on proposed municipal elections, which have also been delayed.
• With oil production and international prices set to rise in 2010, boosting public investment and domestic consumption, real GDP is forecast to grow by 7.3% in 2010, before moderating to 6.4% in 2011.
• The high cost of imports, coupled with the ongoing depreciation of the currency, will keep inflation high, at an average of 13.5% in 2010 and 13.2% in 2011.
• The strong recovery in export revenue in 2010 will widen the current-account surplus to 11.7% of GDP, before moderating international oil prices and slowing output growth reduce the surplus to 7.7% of GDP in 2011.

Monthly review

• The MPLA has revealed new proposals for the reform of Angola's constitution that could delay the holding of the presidential election until 2012.
• The IMF has reached a preliminary agreement with the Angolan government to award a stand-by financing arrangement, worth US$875.5m, which will be used to alleviate liquidity constraints in the economy.
• The Banco Nacional de Angola (BNA, the central bank) has loosened the unofficial peg with the US dollar, allowing the kwanza to depreciate from Kz78:US$1 to Kz85:US$1, while increasing sales of dollars to commercial banks.
• Angola's oil exports are expected to dip slightly, from an estimated 1.93m barrels/day (b/d) in October to 1.82m b/d in November, according to oil traders canvassed by Reuters.
• The government has blocked the sale of a 20% stake in ultra-deepwater Block 32 by a US company, Marathon, to two Chinese oil companies; instead, the national oil company, Sonangol, is to acquire the stake for US$1.3bn.
• A French bank, Calyon, has completed a syndicated loan for Sonangol worth US$1.5bn, involving 15 international banks, most of which will finance the purchase of the 20% stake in Block 32.

Source: Country Report

This report covers the following industry codes:
SIC Code: 53;59;15
NAICS Code: 44;23