Angola Problems 6-5-24

Angola’s economic freedom score is 54.3, making its economy the 118th freest in the 2024 Index of Economic Freedom. Its rating has increased by 1.3 points from last year, and Angola is ranked 19th out of 47 countries in the Sub-Saharan Africa region. The country’s economic freedom score is lower than the world average and higher than the regional average. Angola’s economy is considered “mostly unfree” according to the 2024 Index.

The government of Angola is highly dependent on oil and diamond revenues, and its domination of the economy undermines efficiency. Monopolies and quasi-monopolies are common in the leading sectors. Pervasive corruption and a lack of judicial independence from political interference continue to undermine the foundations of economic freedom. The overall regulatory environment remains constrained by a lack of commitment to policies that support open markets. Non-tariff barriers and burdensome investment regulations hamper development of a dynamic private sector.

Angola's dependence on the oil sector has increased its vulnerability to external shocks and undermined macroeconomic stability. Strong real exchange rate appreciation has stunted the non-oil economy and limited economic diversification and job creation. 

Angola's economy is considered “mostly unfree” according to the 2024 Index. The government of Angola is highly dependent on oil and diamond revenues, and its domination of the economy undermines efficiency. Monopolies and quasi-monopolies are common in the leading sectors.

The central hypothesis maintains that poverty in Angola is not intrinsic but rather the result of significant deprivations affecting a large proportion of the population. We argue that unequal structures in the distribution of economic and social opportunities are the main driver of high poverty rates in the country.

The overall rule of law is weak in Angola. The country’s property rights score is below the world average; its judicial effectiveness score is below the world average; and its government integrity score is below the world average.

The top individual income tax rate is 25 percent, and the top corporate tax rate is 25 percent. The tax burden equals 10.1 percent of GDP. Three-year government spending and budget balance averages are, respectively, 21.8 percent and 0.9 percent of GDP. Public debt amounts to 66.7 percent of GDP.

Angola’s overall regulatory environment is poorly institutionalized and inefficient. The country’s business freedom score is far below the world average; its labor freedom score is below the world average; and its monetary freedom score is below the world average.

The trade-weighted average tariff rate is 8.2 percent, and nontariff measures further undermine trade flows. The government’s sectoral restrictions on foreign ownership continue to limit foreign investment. Access to credit remains difficult despite some progress, and the equity market is underdeveloped.

https://www.heritage.org/index/pages/country-pages/angola#:~:text=Angola's%20economy%20is%20considered%20%E2%80%9Cmostly,common%20in%20the%20leading%20sectors.

Comments

Angola is one of those African countries with close ties to its foreign customers. It needs to address its ties to its citizens in order to expand its economy above subsistence levels.

Norb Leahy, Dunwoody GA Tea Party Leader