Angola recorded the highest economic expansion since 2014, with real Gross Domestic Product (GDP) growth reaching 4.4% in 2024. According to the latest edition of the Angola Economic Update (AEU) published by the World Bank Group (WBG) today, titled Boosting Growth with Inclusive Financial Development, this growth was driven by the oil sector’s recovery and diamond extraction, along with strong expansion in commerce and fishing.
The report highlights that despite a rebound in economic activity in 2024, Angola still struggles with the lasting impacts of prolonged stagnation. From 2016 to 2020, the economy contracted by approximately 10.4%, averaging a 2.1% annual decline. This sluggish growth stemmed from structural challenges and heavy dependence on the oil sector, making it susceptible to global price fluctuations. Real GDP growth is projected at an average of 2.9% from 2025 to 2027, but this is unlikely to significantly improve living standards. Increased global uncertainty, including falling oil prices, emphasizes the need for Angola to diversify its economy and reduce reliance on oil.
“The Angolan economy is in urgent need of establishing a consistent pathway toward robust growth to address nearly a decade of stagnation and to improve conditions for poverty alleviation. There is optimism that the comprehensive economic reforms currently being implemented by the government will produce positive outcomes and unlock the country’s potential,” said Juan Carlos Alvarez, World Bank Country Manager for Angola. “The country must intensify its support for key sectors that can significantly contribute to the essential process of economic diversification. A deeper analysis of these sectors and the needed structural reforms are discussed in the Angola Country Economic Memorandum, also published today,” he added.
The AEU emphasizes the importance of promoting inclusive financial development in Angola to address the existing significant inequality and exclusion, particularly in rural areas where access to formal banking services is limited. Women and older adults are particularly affected. Compared to other countries in the region, Angolan households have less access to credit, savings, and digital financial services. Advancing financial inclusion can boost economic participation and resilience, leading to sustainable growth and poverty reduction. Access to banking, credit, and insurance empowers small businesses, farmers, and entrepreneurs, enhancing productivity and job creation. Moreover, financial inclusion can reduce income inequality by providing marginalized groups with opportunities to build assets and improve their well-being.
The report highlights that implementing key reforms can create a more robust and inclusive financial sector in Angola, essential for diversifying the economy and fostering growth and job creation. It emphasizes the need for broader access to financial services beyond Luanda, especially as Angola focuses on economic activities in the Lobito Corridor and develops secondary cities. Additionally, the rise of digital banking and mobile payments offers a significant opportunity to reach underserved populations, enhancing economic resilience and promoting inclusive development.
The report outlines essential reforms that Angola can implement to foster the growth of its financial sector and enhance accessibility in an inclusive manner. These reforms include:
- Developing digital payments to expand access to financial services in remote areas.
- Making digital payments more accessible and intuitive.
- Establishing a favorable regulatory framework to increase access to finance for Microcredit and Small and Medium Enterprises (MSME).
- Promoting lending to MSMEs and improving the transparency and market alignment of initiatives to finance MSMEs.
- Implementing the Financial Action Task Force action plan and addressing deficiencies in the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Framework.
- Increasing access to insurance for individuals and MSMEs, including weather-based-index insurance for agricultural activities.
“While addressing financial inclusion in Angola has several challenges, particularly for low-income and rural communities, there are constructive opportunities to address these barriers. By implementing regulatory reforms, embracing digital innovations, and enhancing financial education, Angola can pave the way for a more diverse economy and unlock new avenues for growth and job creation,” said Benedicte Baduel, World Bank Senior Country Economist for Angola.
Distributed by APO Group on behalf of The World Bank Group.