Angola

Angola, officially the Republic of Angola, is a country in South-Central Africa bordered by Namibia to the south, Zambia to the east, the Democratic Republic of the Congo to the north, and the Atlantic Ocean to the west. Angola is made up of 18 provinces, with Luanda as its capital. Portuguese is the official language of Angola, and the official currency is the kwanza (AOA).

Angola is run by a multiparty regime, with its President as the chief of state. Its legal system is based on Portuguese civil law and customary law, modified to accommodate political pluralism and increased use of free markets. 

Despite some social and geopolitical factors that may arise as barriers to its development as a country, Angola remains one of the leading African nations with the greatest potential across various sectors. Now, more than ever, there has been a noticeable focus on its overall development, particularly in the sense that this development is being extended beyond the capital, aiming to become a provincial development ( to example that, we can focus in Cities such as Benguela, Lubango, and Namibe stand out, having shown increasingly steady progress over the past 10 years). So, at this scenario Angola can raise as a country that can, in fact, respond to some of the global difficulties the world is going through, with the potential to become a leader in some products or sectors of activity. 

Since 2018, under President João Lourenço, Angola has been actively pursuing economic reforms aimed at diversifying its economy and reducing dependence on oil. Key initiatives include selling state stakes in various companies to attract foreign investment and boost economic efficiency (privatisations), efforts to simplify bureaucracy and enhance transparency, including adherence to the Extractive Industries Transparency Initiative (EITI), and promotion of sectors such as agriculture, mining, and tourism through infrastructure investments and fiscal incentives.These efforts span across agriculture, manufacturing, infrastructure, and renewable energy. One of the most important examples is its participation in the Mattei Plan, an Italian-led initiative aimed at promoting sustainable development in Africa. This aligns with Angola’s Vision 2050, which prioritizes inclusive growth, human capital development, and economic diversification.

Despite an international climate of high prices for raw materials and food products, because of the devaluation of the national currency, Angola's has shown signs of economic recovery in 2023 e 2024. In 2024, Angola's economy recorded solid growth 0f 4,4%, the highest since 2014. The latest data indicates that Angola's Gross Domestic Product (GDP) grew 0.1% in the first quarter of 2025 compared to the previous quarter. In the fourth quarter of 2024, the growth was also 0.1%, following an increase of 2.9% in the third quarter of 2024. The overall GDP growth is expected to decrease from 4.4% in 2024 to 2.37% in 2025. Despite this slowdown, several sectors show positive trends. The fossil fuels market, a key component of Angola's economy, is anticipated to grow significantly. Electricity generation from fossil fuels is projected to reach 4.31 billion kWh in 2025, with an expected annual growth rate of 6.93% for the period 2025-2029. The oil sector, specifically, is forecast to generate 2.61 billion kWh of electricity in 2025, with a 6.05% annual growth rate from 2025 to 2029. The manufacturing sector is expected to see an increase in the number of enterprises, projected to reach 431 in 2025, with a 3.36% annual growth rate. Similarly, the food industry is forecast to have 168 enterprises in 2025, growing at 3.26% annually. However, the stock market shows a slight decline, with market capitalization projected to reach US$1.73 million in 2025, followed by a -1.62% annual growth rate in 2026. The forestry sector presents a mixed outlook, with imports growing at 7.97% annually, while exports are expected to decline by 1.02% per year. 

Foreign Direct Investment (FDI) also saw an increase in investment in sectors such as agriculture, mining and telecommunications, contributing to economic diversification. Fiscal stability has also helped the Angolan economy to overcome challenges. Improvements in inflation control, tax reforms and the reduction of public debt reinforced macroeconomic stability. 

The conduct of Angola's monetary policy in 2024 has taken place in a challenging macroeconomic context, with irregularities in the supply of goods, the gradual removal of fuel subsidies, price adjustments in communication, transportation, and education, as well as the ongoing rise in healthcare costs, leading to the estimate that inflation at the end of the year will be around 27%. However, the annual inflation rate dropped to 23,85% in March 2025, showing a slight deceleration compared to previous levels. Nevertheless, forecasts indicate that inflation will remain high throughout the year, with an estimated average of 23,5%.

Angola continues to hold its position as the second-largest oil producer in sub-Saharan Africa, behind Nigeria. Despite challenges like aging oil fields and reduced investment, Angola continues to maintain a strong position in the region’s energy sector. Its decision to leave OPEC in early 2024 was aimed at gaining more flexibility to manage its production levels and attract upstream investment. As of 2024, Angola’s oil production averages approximately 1.1 to 1.3 million barrels per day (bpd). This represents a decline from peak levels of over 1.8 million bpd in the late 2000s, attributed to maturing fields and underinvestment in new projects. Oil production plays a crucial economic role in Angola, contributing significantly to national revenues. The oil production growth between 2024 and the first quarter of 2025 shows a slight increase. The country's crude petroleum production is projected to reach 63.63 billion kilograms (466.41 million barrels) in 2025, with an expected annual growth rate of 0.23% from 2025 to 2029. While specific data for the first quarter of 2025 is not provided, the overall trend suggests a modest growth in oil production. Angola aims to boost its oil industry through various initiatives. The country plans to increase its oil refining capacity to 425,000 barrels per day by 2025, with the addition of four new refineries. This expansion is part of Angola's strategy to meet domestic fuel demands and reduce reliance on imports. The sector is also vital for government revenue, despite ongoing efforts to diversify the economy. Additionally, oil production is fundamental for employment and local content development. Although direct employment in the oil sector is limited, there is increasing emphasis on local content policies to boost Angolan participation and employment in the industry.

However, the oil sector presents several challenges and opportunities. Many of Angola’s key oil fields are reaching maturity, leading to natural production declines. This necessitates enhanced recovery techniques and increased investment in new field development and exploration. Also, the ageing infrastructure and the need for maintenance and upgrades pose challenges to sustaining and increasing production levels.

Angola’s oil production continues to play a pivotal role in the country’s economy, but challenges such as maturing fields and the need for diversification present ongoing issues. With strategic investments and reforms, Angola aims to stabilise and potentially increase its oil production while fostering broader economic development. The focus on local content and sustainable practices is expected to shape the future of Angola’s oil industry. 

Angola is the sixth largest producer of diamonds in the world and the second in Africa. Angolan diamonds are mainly mined in the province of Lunda Norte and Moxico, and represent about 20% of the world’s diamond production. The global demand for diamonds is increasing, especially in China and Japan. China is currently the largest market for Angolan diamonds. Angola’s diamond industry is well positioned to benefit from these growing markets. Looking ahead, Angola's mining sector will continue to be dominated by diamond exploration and production, which accounts for around 90 per cent of total mining revenues. 

With demand for strategic minerals, non-ferrous metals, and rare earths increasing dramatically due to the global energy transition and the use of strategic minerals in lithium-ion batteries, the sector is expected to significantly increase its contribution to the country's GDP growth. Angola’s diamond industry in 2025 is growing steadily. The country is on track to produce about 15.1 million carats this year, slightly more than in 2024. This growth is supported by new mining projects and upgrades to existing operations. Angola is also working to process more of its diamonds locally, aiming to add value before export. 

Even though global diamond prices have been under pressure and synthetic diamonds are becoming more common, Angola is pushing forward. It has over 20 active mines and dozens of exploration projects underway. The government and private sector are investing in infrastructure and technology to boost efficiency and output.  

Despite some challenges like equipment shortages and global market shifts, Angola is positioning itself as a major player in the global diamond market, with ambitions to grow even more in the next few years. 

PwC in Angola 

PwC Angola is organised around industries, including oil and gas, financial services, industrial manufacturing, energy, utilities, and mining, to share the latest research and points of view on industry trends, develop industry-specific expertise, and share different methodologies and approaches in each area.

PwC Angola offers a range of tax services to assist taxpayers with tax structuring, tax compliance, oil and gas taxation, mergers and acquisitions, indirect taxation, financial services taxation, individual taxation, tax litigation, etc.