"The Angolan economy urgently needs to establish a consistent path to robust growth to address nearly a decade of stagnation and improve conditions for poverty reduction," said Juan Carlos Alvarez at the presentation of the World Bank's report on Angola's economy.
"There is optimism that the comprehensive economic reforms currently implemented by the government will yield positive results and unlock the country's potential," he added, noting, however, that "the country must intensify its support for key sectors that can contribute significantly to the essential process of economic diversification."
At an economic forum this Friday in Luanda, the World Bank will present three reports on Angola: an update on the Angolan economy, an economic memorandum, and another dedicated to the role of the private sector in the development of this Portuguese-speaking African economy.
Titled 'Boosting Growth with Inclusive Financial Development,' the analysis of the Angolan economy highlights the strong 4.4 percent growth last year, the highest since 2014, driven by oil, diamonds, trade, and fishing. However, it comes after about half a decade of economic recession, and this year growth is expected to slow to 2 percent.
"From 2016 to 2020, the economy contracted by approximately 10.4 percent, with an average annual decline of 2.1 percent. This slow growth resulted from structural challenges and heavy dependence on the oil sector, making it susceptible to global price fluctuations," the World Bank says, adding that "real GDP [Gross Domestic Product] growth is expected to grow by an average of 2.9 percent from 2025 to 2027, but this is unlikely to significantly improve living standards."
In the report, the World Bank emphasizes the importance of promoting inclusive financial development in Angola to combat significant inequality and exclusion, especially in rural areas, where access to formal banking services is limited. It warns that, "compared to other countries in the region, Angolan households have less access to credit, savings, and digital financial services."
Financial inclusion, World Bank economists state, "can boost economic participation and resilience, leading to sustainable growth and poverty reduction."
Among the reforms advocated to improve access to formal finance and promote financial sector growth, the World Bank recommends developing intuitive and accessible digital payments in more rural areas, promoting credit for small businesses, developing the Financial Action Task Force's action plan and combating money laundering and the financing of terrorism (AML/CFT), and increasing access to insurance for individuals and businesses, particularly insurance related to the impact of climate change.
