Is Angola ready for PPPs?

The international community has lauded Angola for its quick-thinking and tough decision-making following the sharp fall in the oil price. In February, Angola cut AKz1.8 trillion ($14.3 billion) from its AKz7.2 trillion budget – months before Nigeria, the region’s largest economy and oil producer, made any changes to its own economic outlook.

The revised budget takes into account a lower, much more conservative oil price of $41 a barrel, compared with $80 previously, but the change may affect real GDP growth for the country: according to the IMF, GDP growth is estimated to reach 8.8% in 2015, but this is based on oil at $98 a barrel.

Before 2014, the Angolan government was spending around $15 billion on infrastructure annually, much more than many resource-rich African countries, but now, with limited revenue, this level will be difficult to maintain.

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