Angola

Lacklustre growth compounded by a struggling oil sector

After its sharp deceleration in 2025, growth is expected to experience a moderate rebound in 2026, supported by higher oil prices, on average, following the war in Iran. It will nevertheless remain constrained by sluggish extraction activity and the inability to increase production. After its 8% decline in 2025 (1 Mb/d), production should experience a slight rebound to 1.1 Mb/d, thanks to the start of production of a few deposits, but far from the 2 Mb/d reached in 2008. The sector suffers from the maturation of fields and from a lack of investment resulting in multiple shutdowns for maintenance. The nonoil sector will maintain stable growth (+4%), driven by services and agricultural production. Despite the discovery of significant deposits in 2025, diamond extraction, promoted as an alternative to oil dependence, will struggle to drive growth in a context of competition from synthetic stones. The renovation of the Lobito railway corridor will continue, as the project obtained a USD 753 million loan from the US and the South African development bank. The link-up to the ocean port will make it possible to increase transport volumes of copper and critical minerals (cobalt, nickel) from Angola, Zambia and the DRC to the Atlantic. In 2026, the Lobito Atlantic Railway (LAR) operator already aims to transport 240,000 tonnes of copper by rail from Kolwezi (DRC). Situated on the railway line, the mixed rareearth carbonate (MREC) mine at Longojo, whose construction by the British company Pensana began in 2025, could produce up to 5% of global consumption and diversify the extractive sector.

Public investment is expected to decline again in 2026 due to pinched budget resources and consolidation ahead of the 2027 election year. Private consumption, supported by population growth and easing inflation, is expected to pick up slightly, as will domestic nonextractive private investment against a backdrop of declining interest rates. Credit, however, remains restricted by the small size of the banking system and the financial market.

Inflation is expected to slow significantly despite higher fuel prices (75% imported), thanks to low food prices as well as the firmness of the exchange rate. These factors will offset the continued reduction of fuel subsidies initiated in 2023. Consequently, monetary policy is expected to ease further, after a 100basis-point cut in the policy rate to 17.5% in January 2026. The kwanza will remain overvalued despite downward pressure. In order to control inflation, the National Bank of Angola (BNA) actively defended the kwanza in 2025 to stabilise it against the dollar. In 2026, this policy is expected to continue even if limited devaluations are possible should oil revenues disappoint. Foreign exchange reserves are currently sufficient (7 months) to maintain this policy.

Stabilization of the budget deficit driven by increased hydrocarbon revenues

The public deficit worsened in 2025, weighed down by the drop in oil revenues (-20% y/y), which was not offset by record nonoil revenues (9.9% of GDP). The budget balance is expected to stabilise in 2026 on back of expenditure cuts, driven by a further decrease in subsidies that will mainly affect fuel, and a reduction in public investment (-7%) at the expense of infrastructure and diversification. On the revenue side, oil and gas revenues will rebound while nonoil revenues are expected to stagnate. The POPRIV privatisation programme that was launched in 2023 is set to conclude in 2026. A total of 116 public companies, often small in size, have been privatised for a total amount of USD 1.3 billion, and a further 49 are expected to be privatised in 2026. Partial stockmarket listings are planned, including that of Standard Bank Angola and Unitel (telecommunications company). However, the privatisation of Sonangol has been shelved indefinitely.

After undergoing a marked decline in 2024 on back of the primary surplus, growth, inflation and kwanza stabilisation, the share of public debt began to rise slightly again in 2025, a trend that is expected to continue in 2026. Repayment capacities remain satisfactory. External debt is predominant (71% of the total), as is its denomination in foreign currencies (80%). This exposes the country to exchangerate risk in the event of a devaluation of the kwanza by the BNA, which occurs occasionally. External debt is mainly longterm (residual maturity of 9 years on average) and at floating rates (58%), while domestic debt is essentially shortterm and at fixed rates. External debt is held by commercial banks (41% of the total, with nearly onethird held by the China Development Bank and backed by oil), followed by multilateral creditors (23%) and bondholders (22%). Interest payments on the debt will represent nearly onethird of public revenues in 2026, and the public financing requirement will total 11% of GDP.

The current account surplus contracted sharply in 2025 (-81% over the first three quarters) due to the decline in oil exports and an increase in imports of capital goods related to foreign investment. The current account balance is expected to remain slightly in surplus in 2026, as the increase in imported fuel prices will partly offset the rise in oil exports. Diamond exports — which are mainly destined for the United Arab Emirates (77% of total diamond exports) — could be disrupted by the sharp decline in air traffic to the Gulf. The net FDI balance switched to slightly positive terrain in 2025 for the first time since 2019 and could remain so in 2026. Significant investments were announced in hydrocarbon extraction in 2025, notably by Eni and BP (USD 5 billion via their joint venture Azule Energy) and by TotalEnergies (USD 3 billion for the extension of the Dalia field). Shell also announced its return to Angola after a twenty-year absence. However, the FDI trend mainly reflects the decline in intragroup loan repayments by oil companies due to a contraction of their profits in the country, which fell by 23% y/y. The fuelimport substitution policy has fallen behind schedule. While the Cabinda refinery, a joint venture between the national company Sonangol (10%) and British firm Gemcorp (90%), began production at the end of 2025 to cover 5% of domestic fuel demand, the larger Lobito refinery, initially planned for 2027, announced an additional investment requirement of USD 4.8 billion. Liquefied natural gas (LNG) production is expected to rise sharply in 2026 on back of increased extraction from the Quiluma and Maboqueiro fields in the north of the country, operated by the New Gas Consortium (Eni, TotalEnergies, BP, CABGOC and Sonangol). A production level of 4 billion cubic metres of LNG is targeted for the end of 2026.

Weakened presidential power against a backdrop of social discontent

The slow erosion of the popularity of the Movimento Popular de Libertação de Angola (MPLA, left), the party in power since independence in 1975, continued in 2025. President João Lourenço’s party had obtained only 124 seats out of 220 in the 2022 elections (26 fewer than in the previous elections), closely followed by the main opposition party, the União Nacional para a Independência Total de Angola (UNITA, right), which won 90 seats. UNITA, formerly undermined by internal divisions, has benefited from stronger cohesion after the reelection of Adalberto Costa Junior as its leader in November 2025 after winning a large majority. In July 2025, the announcement of the end of fuel subsidies triggered major demonstrations in Luanda which were violently repressed, resulting in a death toll of 30. Despite the shift in subsidyreduction policy, the political situation will remain unstable in 2026 due to growing social discontent over poverty, the cost of living and deep inequality. The dominance of the ruling party could be challenged in the 2027 general elections, which are expected to be particularly tense as Mr. Lourenço, who has served two terms since 2017, is barred from running again. A victory by the MPLA nonetheless remains likely due to the state’s tight control over the electoral process and the pressure exerted on the opposition. The declaration of independence proclaimed by the Frente para a Libertação do Estado de Cabinda (FLEC) on 21 February 2026 over the exclave of Cabinda (accounting for 60% of national oil production) could reignite security tensions, but the risk of a largescale armed insurgency remains low given the FLEC’s limited military capabilities.

On the international stage, Angola favours nonalignment at global level, taking advantage of competition between China, its historical trading partner whose weight is tending to shrink, and the US to attract foreign investment in the logistics and mining sectors. Angola has moved closer to the European Union, which has pledged investments in the Lobito corridor against a backdrop of diversification of its energy supplies and access to critical minerals from Central Africa. An important partnership agreement was signed with the United Arab Emirates that resulted in the Luanda port concession being awarded to AD Ports and to orders of Emirati military equipment. Angola left OPEC in January 2024 following disagreement over its production quotas. On the African continent, Mr. Lourenço’s presidency of the African Union (AU) from February 2025 to February 2026 ended with mixed results, particularly regarding the Sudanese issue. It nevertheless established Angola as a major mediator in the conflict in the DRC, even though tangible results have been slow to materialise.

Last updated:February 2026