Angola - Resilient and Inclusive Growth Development Policy Operation Program

Overview & Synopsis

Angola’s economic trajectory has been linked to that of global oil prices, and the country has struggled to reduce poverty and promote shared prosperity. The oil sector accounts for 20 percent of GDP, 60 percent of tax revenue, and 95 percent of exports. After experiencing strong growth between 2002 and 2014, declining oil prices, combined with weakening oil production capacity, led to a prolonged recession over 2016-20. With a fertility rate of 5.2 children per women, and negative growth, real income per capita declined significantly. At 3,096 dollars in 2023, it is slightly above its level of 2006, after a peak at 6,076 dollars in 2014. Poverty was estimated at 39.3 percent in 2018, at the international poverty line. With a Gini index of 51.3 in 2018, Angola is among the most unequal countries in the world. This DPO series of two operations, supports the Government of Angola (GoA) in strengthening macroeconomic resilience and achieving inclusive and private sector-led economic transformation. The DPO’s program development objective is to increase economic diversification, resilience and inclusion through: (i) fiscal policy, (ii) private sector growth and job creation, and (iii) human capital and digital development. The series supports a progressive and equitable fiscal consolidation, that includes gradually removing distortive subsidies, enhancing social safety nets to compensate for the impact of subsidy removal on the poorest, and strengthening efficient domestic revenue mobilization to create the fiscal space needed for investments in infrastructure, education, health, and social protection, key pillars of sustainable economic diversification. Reforms also support job creation through promoting private sector activity, advancing financial inclusion and human capital development, and improving essential public services such as electricity, water, and digital infrastructure. Finally, it supports FDI, especially in the development of the Lobito Corridor, with a clearer governance framework.