Oil, agriculture and minerals support Angola in 2022, predicts BFA

"In 2022 there will be essentially three engines pushing the Angolan economy, despite the existing weaknesses, due to the impact of inflation on the fall in the purchasing power of families, in these years of recession until 2020", said José Miguel Cerdeira.

In an interview with Lusa to put the evolution of the Angolan economy into perspective, the economist who heads BFA's Economic Studies Office said that the bank's estimate points "to growth in 2022 between 3 and 4 percent, globally, with stronger on the non-oil side, and less strong on the oil side".

The increase in oil prices at the beginning of this year, consistently above USD 80 per barrel, generates "more foreign exchange, and more slack in the State's accounts", which, through the exchange rate, enhances "a stronger Kwanza, stable, with confidence for investors and consumers and increased purchasing power".

In addition to oil, BFA estimates that two other sectors will continue to support the growth of the non-oil economy: "Agriculture, in which there has been year-on-year growth for 10 consecutive quarters, and many investments and greater credit are beginning to be observed, and the mining sector, where we see some new investments also outside the diamond sector".

Asked if he considers that the economy came out of recession at the end of last year, José Miguel Cerdeira replied that “yes, especially outside the oil sector, being on the way to recovering what it lost in the pandemic”.

The growth, he added, "would have been slight, but mainly due to this accounting issue of the oil GDP, in which the curious phenomenon occurs of Angola producing fewer barrels of oil (which takes the GDP down), but the price has gone up a lot - the sector produced more revenue, more foreign exchange, more taxes, and that has positive effects on the rest of the economy".

Asked about the evolution of the national currency and forecasts for this year, José Miguel Cerdeira recalled that the kwanza gained 17.1 percent against the dollar and 26.7 percent against the euro last year, after several years of losing ground and reduce the purchasing power of Angolans.

"Our expectation for 2022 is still somewhat uncertain, but we expect pressure for appreciation, that is, for the Kwanza to gain value in the first half of the year, which we expect to reverse in the second half of the year; overall, we believe that the pressures for the Kwanza gain in value will be equal to or greater than the pressures to lose value, but we foresee relative stability", said the economist, stressing, nevertheless, that "our perspective depends on a barrel price a little above 70 dollars, on average, so if the price is permanently above 80 dollars, the pressure for the Kwanza to appreciate will be stronger than our current expectations".