Selected Policy Notes for Incoming Administration of Angola

Abstract

The Angolan economy is at a juncture. The current growth model based on oil wealth is nearly exhausted,and has not delivered inclusive growth and shared prosperity. The challenge for the administration is to restore macroeconomic stability and lay the foundations for a new, more inclusive growth model that can support a young and growing population.Oil and mineral wealth allowed Angola to sustain a long civil conflict and to pay for post-conflict reconstruction, but it will not allow Angola to reach higher stages on the development ladder.Angola faces two broad policy challenges that need to be addressed urgently: The growing internal and external imbalances following the adjustment to lower oil prices pose an immediate challenge of macro stabilization. Prospects of persistently low oil prices and diminishing oil reserves call for a new sustainable and inclusive growth model that promotes economic diversification. The first priority is to restore macroeconomic stability.Restoring macroeconomic balance is essential to providing a foundation for long-term sustainable growth.The second priority calls for a new and more inclusive economic growth model to achieve sustained growth and to further improvements in human development and poverty outcomes.Sustainable inclusive growth and economic diversification require strong institutions and a more conducive environment for greater private sector participation.The new Administration is well aware of these challenges and has started to carry-out much needed adjustment.The objective of these Angola Policy Notes, written from the perspective of the World Bank, are to support the government in its reform agenda. The 15 concise policy notes range from consideration of short-term macro stability to policies in support of economic diversification and long-term inclusive growth. The policy notes reflect the World Bank’s past and current engagement in Angola in several sectors, and provide a short diagnostic of the current situation and present policy options for reforms. Recommendations are assessed according to technical and political feasibility of delivering results within a time horizon of three to five-years.