World Economy

UNCTAD, EU Start Project to Help Angola Diversify Trade

Angola’s GDP topped $117 billion in 2016.Angola’s GDP topped $117 billion in 2016.

The European Union and UNCTAD have launched a four-year, $6.9 million project aimed at helping Angola diversify its economy and reduce its dependence on oil, which accounts for a whopping 93% of total merchandise exports.

After decades of civil war ended in 2002, Angola’s economy took off thanks to abundant oil reserves, which fueled a decade of double-digit growth. The steady flow of petrodollars financed new roads and fancy skyscrapers in Luanda, the nation’s capital and now one of the world’s most expensive cities, Global Trade reported.

But when the price of oil crashed in 2014, the economy ground to a halt and growth flatlined, dropping below 1% in 2016. With fuel exports providing less revenue for the government, public debt has more than doubled since 2013 and sits above 60% according to the finance ministry.

“The objective of the EU-UNCTAD Joint Program for Angola is to improve human and institutional capacities to foster appropriate economic diversification policies in Angola,” said UNCTAD Secretary-General Mukhisa Kituyi.

“We aim to help Angola build a more, diverse, inclusive and resilient economy capable of eradicating poverty. Together with our European Union partners, UNCTAD is drawing on its wealth of expertise to provide targeted assistance and address development challenges from multiple angles.”

“The process of diversifying the national expert basket includes the opening of new clusters identified in emerging global trends,” said Angola’s Minister of Commerce Jofre Van-Dunem Junior.

Angola’s gross domestic product topped $117 billion in current prices in 2016, for a population of just under 29 million. From 2000 to 2016, the country saw its GDP per capita increase from $420 to $4,078. This is relatively high compared to other sub-Saharan African countries and remarkable for a least developed country, and Angola aims to become an upper-middle income country by 2020 and graduate from LDC status by 2021.

“Despite Angola’s exceptional improvement in per capita earnings, mainly due to the country’s successful oil sector, progress in economic diversification and advancement in social and human-capital indicators has been limited,” said Paul Akiwumi, director of UNCTAD’s division for Africa and LDCs. “The country needs reformulated policies and reinforced institutions to help diversify its economy and maximize regional and global trade opportunities.”

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