"Beijing's commitment under the recent trade agreement to buy more oil from the United States rather than other suppliers poses a risk of further disruption for Angola, which is the third largest oil supplier to China," the consultant wrote in a note on African economies in 2020.
In the report, sent to customers and to which Lusa had access, the analyst responsible for emerging markets, William Jackson, points out that "Angola's exports to China represent 24 percent of Angola's GDP" and stresses that "chronic under-investment in the oil sector has contributed to the fall in production in the country in recent years," something that will continue this year.
"We think that persistent weaknesses in the oil sector, high inflation, and the tightening of economic policy will keep the Angolan economy in recession in 2020, for the fifth consecutive year," he said.
Capital Economics forecasts that the National Bank of Angola will raise the central interest rate, currently by 15.5 percent, to up to 20 percent this year, arguing that "the sharp drop in the kwanza last year will almost certainly drive up inflation due to the rise in the price of imports," forcing monetary decision-makers to react.
The devaluation of the kwanza "will also raise problems over public debt, as almost four-fifths of the total public debt is in foreign currency," but even so the risk of financial default "remains low as Angola's bonds are mostly long-term and the debt is held by multilateral and bilateral creditors.
However, they point out that "the International Monetary Fund will probably demand that the government tighten fiscal policy, which will be another obstacle to economic growth".
Capital Economics' forecast points to negative growth of 1.5 per cent this year, more than the 0.5 per cent drop forecast for 2019 and below the analysts' average forecast, which estimates a return to growth already this year.
In sub-Saharan Africa as a whole, this consultancy expects average growth of 3 percent, with South Africa, the region's largest economy, slowing average growth.
"The limit to regional growth will again come from South Africa, where hopes for a significant recovery this year seem too optimistic," says William Jackson, concluding that "throughout the region, public debt problems will grow.
In 2019 Angola exported around 479 million barrels of oil at an average price of US$65.2 per barrel, totaling revenues of US$31.2 billion, according to data presented this week by the National Directorate for Markets and Trade Promotion of the Angolan Ministry of Mineral Resources and Oil (MIREMPET).
The main destinations of exports were China (72 percent), Spain (6 percent) and India (5 percent).