Ver Angola

Economy

Vera Daves believes Angola's long recession is coming to an end

Finance Minister Vera Daves believes that the days of the country's long recession are numbered. Showing her confidence, the government official says that the oil-dependent economy will recover from the double impact it suffers: low oil prices and the covid-19 pandemic.

: Walter Fernandes
Walter Fernandes  

The Minister of Finance, in an interview with the Financial Times, stated that, based on economic reform and the rise in oil prices, the country's economy – which since 2016 has decreased by around 10 percent – ​​will grow by around 0,2 percent this year and about 2.4 percent next year.

For that reason, she assured that Angola will "start to come out of recession now".

"We would be comfortable growing four percent a year, so 2.4 percent is still low," she said.

The minister told the Financial Times that the Government had made several reforms, including the sale of state businesses. "We just couldn't do more because we're in an economic downturn made worse by an intermediate pandemic" that has affected the economy, she added.

According to the same newspaper, Angola has an economy that is very dependent on oil, with this product being responsible for more than 90 percent of exports. The Angolan economy was growing rapidly until 2014, when oil prices fell.

Vera Daves considers that the "main cause of recession has been dependence on the oil sector", adding that "it all started when the price plummeted".

To the Financial Times, the minister said that since then levels have never returned to those prior to 2014. "Furthermore, in the last 10 years, we have not made large investments in terms of new oil discoveries", she said, adding that "the reduction of oil production" does not help either.

However, the Government has been trying to attract foreign investment to the energy sector, so that it is possible to diversify the country's economy.

"We are trying to make the sector more dynamic, by creating a good business environment for oil companies to develop marginal fields, make new discoveries and stabilize production, which is in free fall and we want it to rise a little," she said.

She also indicated that they are trying to work "on all fronts". "We know it will take some time to reach the levels of economic diversification we need for the economy to grow above three percent."

Since the country's population is growing at around three percent a year, it takes more than that to reverse the recession: "We need to grow more than that (...) otherwise we will be in recession again ", the minister said.

Related