Angola Country Risk Report

Published 23 June 2015 | Quarterly

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

Core Views

  • Angola's economy will suffer from significantly lower oil prices, with GDP growth expected to decelerate to 3.8% in 2015. Private consumption will be subdued owing to a weaker kwanza and government spending will contract following a revision of the budget.

  • Despite embarking on a severe fiscal austerity drive, Angola's budget will deteriorate owing to sharply-lower oil revenues and increased borrowing. We have revised down our forecast budget deficit from 6.1% to 6.7% of GDP in 2015. We expect a surplus to return in 2018 as spending cuts and higher oil prices filter through.

  • Fuel subsidy cuts, currency depreciation and rising inflation have stirred resentment in Angola, one of the world's most unequal countries. While not an immediate threat to stability, rising living costs will fuel political discontent and heap pressure on the government to deliver on its ambitious social development agenda.

  • Angola's current account will record a deficit this year - its first in six years - due to weaker oil prices and lack of domestic productive capacity. Lack of diversification in the economy and a heavy reliance on imports will ensure the country remains in deficit for the foreseeable future.

Major Forecast Changes

  • We have made some major revisions to our forecasts following the structural move lower oil prices during the final months of 2014. We now forecast weaker real GDP growth, deeper fiscal and current account deficits and a higher external debt burden.

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 an upside risk to our forecasts over the medium-to-long term.

Macroeconomic Forecasts (Angola 2013-2016)
Indicator 2013e 2014e ...

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
Rising Discontent, But Protests Will Be Contained
8
Table: Politica l Overview
8
Long-Term Political Outlook
10
Path To Political Inclusion Uncertain And Slow
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Table: Ec onomic Acti vit y
14
Fiscal Policy
15
Table: Fisca l Polic y
16
Exchange Rate Policy
17
AOA: No Respite In Sight
17
Table: Exchange Rat e
18
Table: BMI Currency Forecast
18
Regional Economic Analysis
19
Angola To Suffer More Than Nigeria From Lower Oil Prices
19
Chapter 3: 10-Year Forecast
23
The Angolan Economy To 2024
23
New Priorities, Familiar Challenges
23
Table: Long-Term Mac roeconomic Forecasts
23
Chapter 4: Operational Risk
25
SWOT Analysis
25
Operational Risk Index
25
Operational Risk
26
Table: Operational Risk
26
Availability Of Labour
28
Table: Sub -Saharan Africa - Availability of Labour Risk
28
Crime Risk
32
Table: Sub -Saharan Africa - Crime Risk
32
Chapter 5: Key Sectors
35
Food & Drink
35
Table: Food Consumption Indicators - Historical Data & Forecasts
36
Other Key Sectors
39
Table: Oil and Gas Sector Key Indicators
39
Table: Pharma Sector Key Indicat ors
39
Table: Telecoms Sector Key Indicators
40
Table: Infrastructure Sector Key Indicators
40
Chapter 6: BMI Global Macro Outlook
41
Global Outlook
41
Deflationary Pressure
41
Table: Globa l Assu mpti ons
41
Table: Developed Stat es, Real GDP GrowtH , %
42
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROW TH FORE CASTS, %
42
Table: Emerging Markets , Real GDP Growth, %
43

The Angola Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Angola. It 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-2019, just published by award-winning forecasters, BMI  Research.

Key Uses

  • Forecast the pace and stability of Angola's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Angola's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Angola, including currency volatility, the commodity price boom and protectionist policies.

The Angola Country Risk Report by BMI  Research includes four major sections: Economic Outlook, Political Outlook, Operational Risk and Key Sector Outlook.

Economic Outlook:

How will the Angola' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Angola through end-2019 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 Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, 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 Index 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 obligations).
  • Global Assumptions - forecasts for each year to end-2019 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 Index evaluates 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 Index assesses explicit short- and long-term risks to political stability; latest positioning 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.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Angola’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

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.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Angola?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Angola against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Angola’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

Key Sector Outlook*

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

BMI 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, including recent sector developments and major industry key performance indicators (KPIs) that have impacted company performance.
  • 5-year Industry Forecasts - Forecasts for each year over 2015-2019, using BMI's proprietary industry modelling technique, which incorporates 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.

*Not all Country Reports contain the Key Sector Outlook chapter. Please enquire above for more information.

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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