Country Report Angola September 2017

Country Report Angola September 2017

  • September 2017 •
  • Report ID: 2379059 •
  • Format: PDF

Outlook for 2017-21



  • Notwithstanding a reduced presence in parliament following the August elections, the ruling Movimento Popular de Libertação de Angola (MPLA) will continue to control all aspects of power.
  • The former president, José Eduardo dos Santos, is likely to seek to retain influence, via family members, potentially leading to strains on political and security force loyalties.
  • Given only minor efforts to diversify the economy, real GDP growth will continue to be driven largely by trends in the hydrocarbons sector. We expect growth to average just 2.5% in 2017-21, compared with 4.7% in 2011-15.
  • Although inflation is likely to moderate from its 2016 highs, ongoing currency devaluation means that it will remain elevated; after averaging almost 30% in 2017, it will fall to 9.2% in 2021.
  • The pace of deprecation of the kwanza's official rate will ease from its 2015-16 levels as oil prices pick up. Nonetheless, amid continued shortages of the US dollar, the gap with the black-market rate will remain substantial.
  • We expect the current account to remain in deficit in 2017-21. The deficit will largely follow oil price trends and will average 8.1% of GDP.


Review



  • Two opposition groups, the União Nacional para a Independência Total de Angola and the Convergência Ampla de Salvação de Angola-Coligação Eleitoral coalition, have publicly rejected election results giving the MPLA a 61% share of the vote.
  • In August a separatist group, Frente de Libertação do Enclave de Cabinda (FLEC), claimed to have killed five Angolan soldiers in a series of attacks in Cabinda province. The first attack was timed to coincide with the legislative election on August 23rd.
  • Angola took over the chair of the politics, defence and security organ of the Southern African Development Community in August. The appointment gives Angola's incoming president, João Lourenço, an opportunity to boost his limited regional profile.
  • A presidential decree published in August authorises the Ministry of Finance to issue a new sovereign bond, valued up to US$2bn, although it does not set out a time frame for the issue.
  • Office vacancy rates in 2016 were as high as 20% (up from 8% two years earlier), according to a new report published by a Luanda-based property consultancy. Real-estate sales and rental transactions have stagnated on the back of a weakening economy and new legislation on rental contracts.


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