Angola has undergone a multitude of economic downturns since her independence in 1975, with many of these downturns being punctuated by periods of political strife, changes in oil prices, and other macroeconomic aspects. Following is a summary of those crises:
Oil Dependency: Oil is the primary source of income for the Angolan economy as nearly all government revenue comes from oil exports. When oil prices are low or the economy goes into a global oil slump, it wreaks havoc on the economy.
Civil War: The long civil wars (1975-2002), led to the destruction of many aspects of the economy, including agriculture, infrastructure and even foreign investments. Rehabilitation of the ‘off war’ economy was greatly achieved but some issues persisted.
Inflation and Kwanza Depreciation: High inflation rates, and its currency, the kwanza, suffered a significant depreciation. This has diminished the ability to buy basic necessities and raised the living standards of a majority of its citizens.
Diversification Efforts: The experience of over dependence on oil has made the government to accept that, Angolan economy should indeed be diversified. While the initiatives to promote agriculture, tourism, and other sectors have been glacial, they are important for the future.
Debt and Relationships with the IMF: Angola has undertaken steps to service its external debt with the International Monetary Fund (IMF), and also proceeded with reforms pertaining to the economy as a way of averting the crisis.
Social Impact: Economic downturns have resulted in unemployment and increased poverty in the country. Discontent with the economic situation and the government’s policy led to social upheavals on several occasions.
COVID-19 Impact: COVID-19 pandemic made matters worse for the country’s economy as it intensified already existing weaknesses and affected both demand and supply of oil.
Despite the fact that Angola has had to deal with these difficulties, it still aspires for development that is just, equitable and economically sustainable.
