Angola produced more oil than any other African nation in June, the second month in a row. The nation’s oil sector accounts for the majority of its exports and many hope that more oil money will place Angola on a continuous path toward economic growth.
The International Monetary Fund (IMF) on Friday gave a positive outlook of Angola’s economy, asserting that oil and non-oil growth has continued in 2022 while “implementation of the prudent budget appears to remain on track, helped by oil revenues and spending discipline.”
“Bolstered by prudent policies and high oil prices, the Angolan economy is expected to continue recovering this year, while at the same time reducing vulnerabilities,” the IMF said in a statement to Today News Africa in Washington, noting, however, that its 3.0 percent overall growth for the Angolan economy in 2022 may be slightly impacted by the war in Ukraine and slower-than-expected non-oil growth in 2022Q1.
The Organization of Petroleum Exporting Countries’ (OPECs) reports that Angola’s oil production increased from 1.162 million barrels per day in May to 1.175 million barrels per day in June, representing the highest in Africa. Nigeria also recorded an increase in oil production last month, averaging 1.158 million barrels per day in June, the second highest production in Africa.
In Angola, oil and gas comprise the nation’s main source of revenue. According to data from the World Bank, Angola’s oil sector accounts for one third of its gross domestic product and roughly 95 percent of its exports. Oil exploration has been a vital part of Angola’s economy for decades.
Under President João Lourenço, who was elected in 2017, Angola’s oil sector has been dramatically re-imagined as effective measures to combat corruption have been instituted.
Under the new administration, Angola’s national oil company Sonangol has improved drastically. As the administration has taken steps to combat corruption, transparency and accountability have become greater priorities.
The prosperity of the Angolan economy is heavily dependent on its oil sector so its continued success is fundamentally important to improving the living conditions for Angolans.
While the international economy and global market are incredibly volatile due to Russia’s war on Ukraine, the recent growth of Angola’s oil sector offers promise that the nation may be able to withstand the global factors that threaten to further destabilize it.
While much of the world encourages a global transition into low carbon energy sources, recent data regarding oil production implies that crude oil remains a valued commodity and one upon which many economies depend. Particularly in the wake of global economic turmoil, its production is important to stability.
In May, President João Lourenço cautioned that a transition toward a low-carbon economy should be gradual and strategic, saying, “Saving the planet shouldn’t bring more hunger and misery to the people of countries that depend on oil revenues.”
The growth and success of Angola’s oil sector offers hope for improvements to the nation’s economy and the general wellbeing of its people. 2021 was the first year since 2016 that Angola recorded a positive annual gross domestic product change.
The World Bank reported in April of 2020 that 47.6 percent of Angolans lived below the international poverty line and recent events including the covid-19 pandemic have threatened the fight against poverty.