The African Development Bank (AfDB) has reiterated its commitment to supporting Angola’s economic transformation, recognizing the significant reforms implemented by the Angolan government to stabilize and diversify the economy.
AfDB budget support for Angola comes in the wake of a recent meeting between AfDB President Akinwumi Adesina and Angola’s President João Lourenço in Luanda, where both parties highlighted the country’s achievements and discussed strategies for further strengthening the partnership between the bank and Angola.
Angola, a country traditionally reliant on oil exports, has been taking steps to diversify its economy in recent years. The global downturn in oil prices, combined with internal challenges, had previously caused substantial economic strain. However, under President Lourenço’s leadership, the government has implemented a series of economic reforms aimed at revitalizing the country’s financial stability and boosting non-oil sectors such as agriculture, energy, and water infrastructure.
During the meeting, Adesina commended Angola’s leadership for its steadfast commitment to macroeconomic reforms, stating that the country had made notable progress in reducing inflation, stabilizing public finances, and enhancing the investment climate. The AfDB’s involvement has been central to this transformation, with Angola benefiting from critical financial support and development projects that have helped drive growth in several key sectors.
Terming the reforms as bold, Adesina told President Lourenço, “What you have done to reduce public debt is impressive. You moved from 119% of GDP in 2020, to an expected 58% of GDP this year below, despite significant external shocks.”
President Lourenço said in addition to promoting a private sector driven economy and diversifying away from the oil sector, his government is working to create decent jobs for youth. He has made human capital and skills development one of the three pillars of his government’s National Development Plan 2023-2027.
The Bank recently approved $124 million for a youth project in Angola, locally known as CRESCER, which brings together the financial sector and the entrepreneurial associations to find tailored solutions for young entrepreneurs.
President Lourenço welcomed the Bank’s offer to work with his government to design and co-finance a comprehensive initiative to avail capital to young entrepreneurs as the Youth Entrepreneurship Investment Banks which the Bank has successfully helped to establish in countries such as Liberia and Ethiopia.
Angola has one of the world’s fastest growing populations, with half of its 35 million people being youth. 40% of its youth are unemployed. About 550,000 new workers join the labor force every year, requiring a concerted effort to created decent jobs at comparable pace.
Stressing the importance of maintaining the momentum for reform, Adesina announced that the African Development Bank will support Angola’s request for a two-year budget support operation of about $160 million for 2024, with a second tranche scheduled for 2025.
One of the primary areas of AfDB budget support for Angola has been the energy sector. Angola has vast potential in renewable energy, particularly in hydropower, which the government is eager to harness to reduce dependence on oil and boost energy security.
“Angola is sitting on a gold mine of clean hydro energy,” said Adesina, “you have 1.5GW of unused clean hydro energy and by 2027 you will have 3.5GW. With investment from the private sector, the country can provide power solution to Zambia, Namibia and South Africa.”
Agriculture, another sector with significant growth potential, is also a focus of the AfDB’s efforts in Angola. The country’s fertile land and favorable climate make it well-suited for agricultural expansion, yet the sector has been historically underdeveloped due to Angola’s heavy reliance on oil exports.
With the AfDB’s support, Angola is working to modernize its agricultural practices, enhance food security, and create jobs in rural areas. These efforts are in line with the government’s broader strategy to diversify the economy and reduce poverty.
“Angola has no business spending $2 billion per annum importing food. It should and can be totally self-sufficient and even become a net exporter,” said Adesina.
The African Development Bank has a portfolio of $212 million currently invested in the sector and is finalising a further investment of around to step up agricultural production in the easter region of Angola. $100 million.
The Bank pledged to help Angola scale up fertiliser use and domestic production, and work with the country towards the establishment of Special Agriculture Processing Zones operating in 11 other African countries.
Adesina thanked Angola for its support for the Bank, including the General Capital Increase and the Bank’s campaign for rechanneling of the IMF’s Special Drawing Rights through multilateral development banks. Angola is also one of the few regional contributors to the Bank’s concessional window, the African Development Fund, having provided about 6.5 million Euros to each of the Fund’s last three replenishments.
During his visit, the Bank Group president also met with Angola’s Finance Minister Vera Daves De Sousa and the Minister for Planning Victor Hugo Guilherme. He later toured the Bank’s $90 million funded Luanda Science and Technology Park.
Adesina was accompanied by the Director General for Southern Africa Region Leila Mokaddem, the Country Manager for Angola and Sao Tomé Principe Pietro Toigo, the Executive Director for Angola, Mozambique, Namibia and Zimbabwe João Luis Ngimbi and Modibo Toure, Bank Group President’s Special Envoy for Shareholder Relations in Africa.
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