African Development Bank pledges more support for Angola’s rapidly reforming economy

 

In recent talks between Angola’s President João Manuel Lourenço and African Development Bank Group (www.AfDB.org) head Dr Akinwumi Adesina, the two leaders discussed a wide range of measures introduced by the Angolan government to rapidly transform the economy.

The reforms include diversifying away from oil, promoting private sector, tackling the country’s debt burden, reduce poverty, achieving food and energy security, and creating youth employment. The leaders met on Friday 20 September, in the Angolan capital Luanda.

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.” 

He also pointed to the positive outlook of the country’s economic performance saying, “even though your GDP growth is estimated at 2.7% this year, it is projected to rise to 4.3% in 2025 because of the structural reforms and diversification agenda you are implementing.”

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.

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. 

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.

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.

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.

On agriculture, the Angolan leader and the Bank Group president agreed that with 35 million hectares of fertile land and water supply, the country should transform its sector to achieve food security and create jobs for youth and women.

“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.

In addition to agriculture, “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.”

Angola is working to attract significant private sector investment and will present projects worth nearly $2 billion at this year’s Africa Investment Forum, to be held in Morocco’s city of Rabat from 4 to 6 December.  

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.

Distributed by APO Group on behalf of African Development Bank Group (AfDB).

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About the African Development Bank Group:
The African Development Bank Group is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 41 African countries with an external office in Japan, the Bank contributes to the economic development and the social progress of its 54 regional member states. For more information: www.AfDB.org