Business Monitor International


Angola Business Forecast Report

Published 16 December 2014

  • 39 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Angola Business Forecast Report

Core Views

  • We forecast that real GDP growth in Angola will average 5.4% annually between 2015 and 2019. The non-oil sector will be the main driver of growth over our 2015-2019 forecast period. High levels of government spending on infrastructure and oil exploration and development underpin strong growth in the construction, energy and transport sectors.

  • Plateauing oil revenues, a narrow tax base and heavy public spending will see Angola's fiscal balance remain firmly in the red over the next few years. We predict that the country will sustain a sizeable fiscal shortfall - in the range of 6.0-8.5% of GDP - over our 2014-2018 forecast period.

  • The current account balance will steadily deteriorate over the next five years to stand at 1.0% of GDP by 2019, from an estimated 7.4% of GDP in 2014. We predict that the country will sustain a sizeable fiscal shortfall - in the range of 6.0-8.5% of GDP - over our 2014-2018 forecast period.

  • Over the last six months, the country's traditionally fractured opposition parties have shown greater unity and been more openly critical of the ruling Movimento Popular de Libertacao de Angola (MPLA). Popular anti-government protests, a frequent occurrence since 2011, have assumed a more organised and political edge.

Major Forecast Changes

  • We have made some adjustments to our forecasts for economic growth in Angola. We now forecast growth of 4.4% in 2014 and 5.6% in 2015, compared to 5.2% and 5.5% previously.

Key Risks To Outlook

  • Our forecasts, as always, remain subject to the myriad uncertainties associated with oil production and exploration in Angola, along with volatility in global oil prices.

  • Given that our forecasts only include planned oil projects, the upside potential posed by the country's vast and as yet unexploited sub-salt reserves pose a major upside risk to our forecasts over the medium-to-long term.

Macroeconomic Forecasts (Angola 2012-2015)
Indicator 2012e 2013e 2014f

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Falling Oil Prices To Heighten Tensions
8
Falling oil prices carry potentially significant political and social ramifications for Angola
While not an immediate threat to broad stability,
rising living costs will fuel popular disquiet and heap further pressure on the government to deliver on its ambitious social development
rising living costs will fuel popular disquiet and heap further pressure on the government to deliver on its ambitious social development
agenda
Table: Political Outlook
8
Long-Term Political Outlook
9
Path To Political Inclusion Uncertain And Slow
9
Although Angola has become one of the largest and fastest-growing economies in Sub-Saharan Africa, its transition over the past
Although Angola has become one of the largest and fastest-growing economies in Sub-Saharan Africa, its transition over the past
decade has not been complemented by a move towards a more open political system
The concentration of power, both political and
economic, presents the key challenge to economic development and risk to political stability over the coming decade
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Non-Oil Growth Outlook Intact, But Increased Risks
14
Despite falling oil prices, headline economic growth in Angola will continue to be supported by the non-oil economy and we predict that
Despite falling oil prices, headline economic growth in Angola will continue to be supported by the non-oil economy and we predict that
real GDP growth will expand by 5
Table: Economic Activity
14
Balance Of Payments
15
C/A Heading Into Deficit In 2015
15
Falling oil prices have caused Angola's external account picture to deteriorate significantly
We now expect the country's current account
balance to flip into deficit in 2015 and remain in the red thereafter
Monetary Policy
17
Currency Risks Add To Worsening Inflation Outlook
17
The reduction of fuel subsidies and expansionary government spending will see inflation in Angola rise over the coming quarters, with
The reduction of fuel subsidies and expansionary government spending will see inflation in Angola rise over the coming quarters, with
currency concerns looming large
This trend will prompt the authorities to tighten monetary policy and we are forecasting 50 basis
points' worth of further interest rate hikes by end-2015
Fiscal Policy
18
Risks To Rise Amid Lower Oil Prices
18
Angola's heavy reliance on hydrocarbons leaves it highly exposed to falling oil prices that will precipitate further deterioration in its fiscal
Angola's heavy reliance on hydrocarbons leaves it highly exposed to falling oil prices that will precipitate further deterioration in its fiscal
and external balances
We believe, however, that with careful management there remains adequate fiscal space for the government to
maintain its investment-led growth agenda
Chapter 3: 10-Year Forecast
21
The Angolan Economy To 2023
21
New Priorities, Familiar Challenges
21
Having averaged double digit rates of real GDP expansion since the end of civil war in 2002, we expect growth in Angola over the next
Having averaged double digit rates of real GDP expansion since the end of civil war in 2002, we expect growth in Angola over the next
ten years to come at the more moderate, but still robust level of 5
Table: Long-Term Macroeconomic Forecasts
21
Business Monitor International Ltd www
com 3
Contents
Contents
Chapter 4: Operational Risk
23
Operational Risk Index
23
Operational Risk
24
Table: Operational Risk
24
Transport Network
25
Table : Tra nsport Networ k Ris ks
26
Economic Openness
29
Table: Economic Openness
30
Table: Top Five Trade Partners & Product Exports, (USDmn)
31
Table: Top Five Trade Partners & Product Imports, (USDmn)
32
Chapter 5: Key Sectors
35
Infrastructure
35
Table: Construction And Infrastructure Industry Data
36
Table: Construction And Infrastructure Industry Data
37
Other Key Sectors
39
table: Oil and Gas Sector Key Indicators
39
table: Pharma Sector Key Indicators
39
table: Autos Sector Key Indicators
39
table: Telecoms Sector Key Indicators
40
table: Food and Drink Sector Key Indicators
40
Chapter 6: BMI Global Assumptions
41
Global Outlook
41
Warning Signs Growing
41
Table: Global Assumptions
41
Table : Developed States , Real GDP Growth, %
42
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
42
Table : Emerging Mar kets , Real GDP Growth , %
43

The Angola Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Angola and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Angola's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Angola's economic and industry growth through end-2018.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Angola's country risks against regional peers using BMI's country comparative Risk Rankings system.
  • Evaluate external threats to doing business in Angola, including currency volatility, the commodity price boom and protectionist policies.

The Angola Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Angola economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Angola through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Angola Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2018 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Angola and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Angola, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Angola over the next 5-years?

BMI's Angola country Risk Rankings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Angola Market - Political Strengths, Weaknesses, Opportunities and Threats facing Angola.
  • Political Stability and Risk Assessment - BMI's Risk Rankings assess explicit short- and long-term risks to political stability; latest ankings, rankings and trends for Angola's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark Angola's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Rankings with SWOT Analysis - Business Environment Risk Rankings for Angola, benchmarked against rankings for regional neighbours.

Country Competitiveness - Competitiveness of Angola's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Rankings.

Key Sector Outlook

Which industry sectors in Angola will grow fastest, and where are the major investment opportunities in the market?

BMI's identifies investment opportunities in Angola's high growth industries including automotives, defence & security, food & drink, freight transport, infrastructure, oil & gas, pharmaceuticals & healthcare and telecommunications & IT.

Key Areas Covered:

  • Market Overview - Size and value of each industry with developments over 2009-2013, covering major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2014-2018, using BMI's proprietary industry modeling technique, which incorporates all key domestic and international indicators - including economic growth, interest rates, exchange rate outlook, commodity prices and demographic trends - to provide fully integrated forecasts across, and within, each industry.
  • Demand- and Supply-Side Data/Forecasts - BMI's industry data covers both the output of each industry and the domestic demand, offering clear analysis of anticipated import/export trends, as well as capacity growth within each industry.

Key Benefits

  • Target strategic opportunities in high growth industries, which are benefiting from global mega trends, and thus offer strong investment and growth opportunities.
  • Compare the growth path of different industries to identify which are best placed to benefit from domestic and international economic prospects, and which have historically suffered from volatile growth trends - a key indicator of future risks.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express