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Minister says economic growth in Angola will be driven by oil sector

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Calm after the storm. Angola’s economy is in recovery mode after a testing few years. Growth will be driven primarily by the oil sector. Image credit: Jorge Sa Pinheiro on Unsplash

Minister says economic growth in Angola will be driven by oil sector

According to Angola’s Minister of Economy and Planning the country foresees economic growth of 3.6% between 2023 and 2027, driven primarily by positive performance in the oil sector.

Angola’s Minister of Economy and Planning, Mário Caetano João, says that the southern African country is forecasting economic growth of 3% in 2023, with an increase to an average of over 3.6% between 2023 and 2027. João adds that economic growth in Angola will be driven primarily by the country’s oil sector.

Growth in the oil sector during the forecast period is expected to average one percent, while non-oil growth is poised to average 4.6%, adds João.

Decreased oil production in the country and reduced fiscal impulse, however, is set to moderate the country’s economic growth in 2023, thus falling below the country’s projected population growth of 3.1%.

Discoveries attract more investment (Minister says economic growth in Angola will be driven by oil sector)   

Despite this downturn, recent discoveries in the country are set to attract more investment into Angola’s oil sector, with exploration efforts by oil and gas supermajor, ExxonMobil in 2022 having resulted in the discovery of 30m of high-quality, hydrocarbon-bearing sandstone.

Meanwhile, in 2022, energy major TotalEnergies announced its intention to invest more than USD3-billion in Angola for projects related to oil exploration.

With the country’s economy intrinsically linked to global oil demand, higher oil prices in 2022 allowed Angola’s currency to appreciate by 26.2% while fiscal expansion has served to strengthen domestic demand and generate growth in private consumption, which is estimated at approximately 5%.

Economic reforms in Angola over the past five years have allowed the country to improve macroeconomic management and public sector governance, with stability having been attributed to a more flexible exchange rate regime, central bank autonomy, favourable monetary policies, and fiscal consolidation.

The promotion of greater private sector participation in Angola’s economy is poised to increase the stability of the financial sector while reducing the impact of volatility within the oil sector.

Commitment needed to improve governance (Minister says economic growth in Angola will be driven by oil sector)   

However, it has been noted by international financial institution, the World Bank, that for Angola to transform its economy towards a more sustainable, inclusive, and private sector-led model, the country will require strong political commitment to transform and diversify its state-led, oil-funded economy to improve macroeconomic management and public sector governance.

Upcoming natural gas and renewable energy projects, however, offer diversification opportunities, enabling the Angolan economy to grow on the back of sustainable energy.

Angola’s economic outlook, oil demand and supply trends, and ongoing diversification efforts will be further unpacked during this year’s edition of the country’s premier energy event: Angola Oil & Gas (AOG), taking place in Luanda this year.

Organised by Energy Capital & Power, AOG  makes its return in 2023 for its fourth edition, bringing together African energy and petroleum ministers, global investors and thought-leaders and project developers and service companies to discuss the future of Angolan energy.

Building on the event’s long-standing partnership with Angola’s Ministry of Mineral Resources, Oil and Gas and national oil company Sonangol, AOG 2023 represents the platform where discussions will be held and deals signed that will shape the trajectory of Angola’s energy future.

Source: Energy Capital & Power

Minister says economic growth in Angola will be driven by oil sector

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Minister says economic growth in Angola will be driven by oil sector

 

 

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