International Trade in Angola

News Related to International Trade in Angola

Business outline for Angola

Economic Overview

With the pre-crisis  average economic growth at 20%, Angola was one of the fastest growing economies of the world. Due to the global recession, the fall of oil prices and the reduction of the production quota of the OPEC (Organization of the Petroleum Exporting Countries) the growth came to a abrupt halt in 2009, falling to 0.7%. Estimated at 5.9% in 2010, growth should again become stronger in 2011. After 27 years of civil war, the country is now undergoing reconstruction, which is largely financed by country's oil wealth.

Becuase the crisis has greatly worsened the macroeconomic situation of the country, in 2009 Angola appealed for help to the IMF and signed a stand-by accord. The country should deal with the challenge of increasing spending on basic infrastructures, while also constituting a foreign currency reserve and paying its arrears. The 2011 reforms program emphasizes strenghtening of the economic institutions and a reform of the fiscal system. Reforms aiming to improve the business environment are also planned.

Even though the income per capita is increasing, particularly in the metropolitan regions, life is still difficult for the majority of the Angolans affected by poverty and unemployment. According to the UNDP, 35% of Angolans suffer from malnutrition. Although political stability has improved, a widespread corruption still remains.

FDI in Figures

Angola has an exceptional economic potential. The country is rich in oil, minerals, fisheries and agriculture, and has significant potential in hydroelectricity. The country seeks to promote foreign investment. A new law for FDI was enforced in 2003 in order to create a more positive atmosphere for investors. However, this law is subordinated to decrees and regulations issued by the ministries. Angola is considered one of the most corrupt countries of the world, its financial system is underdeveloped, and transportation is slow and expensive.

During these past years, encouraged by the exceptional high prices, investments have rushed into the oil sector, reactivating the projects of oil exploration and drilling at the time when the profitability was low due to the drop in prices. In spite of a drop in the FDI flux in 2009, due to the economic crisis, FDI flows should remain large.

The oil sector is the main destination of most of FDI. The majority of FDI in Angola comes from the United States, followed by France and Netherlands.

Foreign Trade Overview

Angola has considerably liberalized its trade regime in the last recent years. Foreign trade representedg more than 100% before the economic crisis (90% in 2009). The country is a member of SADC (Southern Africa Development Community) and ECCAS (Economy Community of Central African States). 

Custom duties are relatively low, between 5% to 10%. Importing certain products, such as pharmaceuticals and agricultural products, still requires license authorizations from the concerned ministries. Angola has also adopted the SADC (Southern Africa Development Community) guidelines in biotechnology which effectively prohibits the import of biotechnology grain. 

With the introduction of a new customs code in January 2007, the country has taken a big leap towards reforming its foreign trade. However, the unjustified delays in custom clearance at ports still remains a major problem. Angola is a country that has registered a large trade surplus, a trend that should continue for the next following years, in spite of the drop of prices for raw materials. 

The main trade partners of Angola are the United States, China and the European Union.