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                     Key Economic Indicators
        (Millions of U.S. dollars unless otherwise noted)

                                  1991      1992 /1   1993 /2
Income, Production,
 and Employment

Nominal GDP (at current prices)   8,750     8,279       n/a
Real GDP Growth (pct.)             -1.6       1.3       n/a
By Sector (percent share):
  Oil                              55         n/a       n/a
  Other                            45         n/a       n/a
Net Exports of
 Goods and Services               3,620     3,968       n/a
Nominal GDP Per Capita (US$)      849       781         n/a
Unemployment Rate (percent) /3      n/a      22.3       n/a

Money and Prices
 (annual percent growth)

Money Supply (M2)                  68.5     299.9       n/a
Retail Inflation /3               175.7     526.2      1,687.2
Consumer Price Index /3           275.7      1,642.7  11,210.4
Exchange rate (NKZ per US$) /4
  Official (annual average)       66.1      442       4,000
  Parallel (end-of-period) /3     1,075     6,900     65,000

Trade and Balance of Payments

Total Exports (FOB)               3,449     3,795       n/a
  Exports to U.S. (CIF)           1,786     2,303       n/a
Total Imports (FOB)               1,347     1,631       n/a
  Imports from U.S. (FAS)           188       158       n/a
Aid from U.S.                        16.6      70       n/a
External Public Debt /5           7,537     8,021       n/a
Debt Service Payments (paid)        416       n/a       n/a
Gold and FOREX Reserves             342.5     509       n/a
Trade Balance                     2,102     2,164       n/a
  Balance with U.S.               1,598     2,145       n/a


1/  Estimated and/or based on incomplete data.
2/  Based on January-October data.
3/  Data for Luanda only.
4/  See section 2 for exchange rate information.
5/  Medium- and long-term debt; excludes a portion of the oil
    companies' debt and short-term commitments.

1.  General Policy Framework

    The Republic of Angola is potentially one of Africa's
wealthiest countries.  Relatively sparsely populated, it has
large hydrocarbon and mineral resources, huge hydroelectric
potential, and ample arable land.  Civil war between the
Government of Angola and the National Union for the Total
Independence of Angola (UNITA) from 1975 until May 1991, and
again from November 1992 until the present, has wreaked havoc
and prevented the country from realizing its potential. 
Analysis of the Angolan economy is seriously limited by
inadequate data.

    In addition to the extreme disruptions caused by conflict,
a severe lack of managerial, administrative, and technical
talent has hampered economic performance.  Misguided and
ineffective attempts at socialist economic planning and
centralized decision-making further hindered development.  Only
the country's oil sector, jointly run by foreign oil companies
and the state oil firm Sonangol, has remained well-managed and
prosperous.  Angola currently produces over 500,000 barrels per
day of crude.  Oil accounts for the majority of real GDP, over
90 percent of exports, and over 80 percent of government

    Urban populations swollen by internally-displaced refugees
have subsisted largely on foreign food aid or extensive
parallel markets based on barter and currency dealing.  The
bulk of the rural population carves out a living in marginal
security, surviving by subsistence farming.  Administrative
chaos, corruption, hyperinflation, and war have vitiated normal
economic activity and attempts at reform.

    The public sector budget has been perpetually in deficit
from the heavy military spending burden, and the deficit was
exacerbated by a massive increase in government spending during
the electoral period between May 1991 and September 1992.  The
deficit ballooned to an estimated 30 percent of GDP in 1992. 
Around half of the country's foreign exchange earnings, at
least 40 percent of the budget, and an inordinate proportion of
Angola's human resources were spent on the war effort prior to
1991.  In addition, ailing state enterprises were supported
through heavy subsidies and credit.  The deficit has been
financed by increasing the money supply; there has been little
if any corresponding improvement in the supply of goods and
services.  Shortages, price controls, and erosion of confidence
in the national currency encouraged parallel markets and
widespread dependence on barter or dollar transactions.

    The signing of the Angola Peace Accords in May 1991
provided the first real hope in 16 years for economic
recovery.  The accords provided for a UN-monitored ceasefire,
the creation of a new, nonpartisan national armed force, and
free and fair, internationally-monitored elections at the end
of September, 1992.  The ceasefire generally held through most
of 1992, and elections considered generally free and fair by
the United Nations were held on September 29-30.  However, the
losing party, UNITA, refused to accept the results, and
fighting resumed.  Negotiations held during 1993 have yet to
produce a settlement between the combatants.

    The long-term effects of the war, the destruction of
infrastructure, and years of economic mismanagement remain to
be addressed.  The end of conflict should portend economic
stabilization and growth, but there appears to be little hope
for an immediate "peace dividend."  Reconstruction is likely to
be a long and arduous process, requiring significant inflows of
foreign assistance and investment.

    The government has tried to carry out reforms and to
structure the economy along market lines.  Beginning in 1987,
it has launched various programs aimed at privatization,
liberalization, devaluation of the kwanza, and new rigor in
financial management.  Most of these programs have enjoyed
little success.

    The government claims to welcome foreign trade and
investment, and eagerly seeks western participation in
development projects.  Barriers to U.S. exports and capital lie
not in deliberate government policies but in war-caused
uncertainty, the government's scarcity of resources, and its
ineffectiveness and poor management.  The oil sector, the only
functional part of the Angolan economy managed by the
government and largely isolated from the civil war, has been
the focus of U.S.-Angolan trade and investment.  The U.S. buys
about 90 percent of Angola's oil exports, while equipment for
the sector accounts for much of U.S. sales to Angola.  Given
the country's huge potential, lasting peace and genuine
economic liberalization could provide substantial opportunities
for U.S. Trade and investment in Angola.

2.  Exchange Rate Policy

    From 1978 to September 1990, the government
maintained the official exchange rate for the kwanza, a
non-convertible currency, at 29 to the U.S. dollar.  The new
kwanza (nkz) replaced the kwanza at par in September 1990.  In
March 1991, the government devalued the new kwanza by 50
percent.  Subsequent devaluations brought the official rate to
nkz 550 to the dollar by April 1992.  In an attempt to narrow
the gap between that rate and a parallel market rate several
times higher, the government adopted a program of currency
auctions in late 1992 and early 1993 that led to the
devaluation of the currency to 7,000 to the dollar.  In March
1993, the government revalued the new kwanza to 4,000 to the
dollar, but in October devalued to 6,500, the current official

    In spring 1993, the government inaugurated a floating rate
80 percent of the parallel market rate, meant to increase the
availability of hard currency for certain categories of
purchases and purchasers, namely, foreign travel and study,
foreign medical and legal expenses, and approved imports. 
Access to this floating rate has widened somewhat in recent
months beyond those with privileged access to government
officials.  The government has also licensed a private foreign
exchange house to trade hard currency at prevailing market
rates.  The still-prevalent parallel market is tolerated by the
government, and there has been no effort to prosecute those
involved or to reduce their ability to operate.  The government
has stated in recent declarations its intention to bridge the
wide gap between official and parallel market rates through a
series of devaluations next year.

3.  Structural Policies

    Angola's economic policy remained in flux in 1993.  The
government has taken some steps to reduce its role in the
economy, and has reduced or eliminated subsidies and controls
of some foodstuffs and other consumer products.  Nevertheless,
it has been criticized by the IMF, World Bank, and bilateral
donors for not going far enough.  Specifically, the
Government's inability to combat hyperinflation successfully ,
to move towards unification of the exchange rates, to control
money supply growth, and to reduce the deficit has engendered
frustration from international institutions and bilateral
donors.  Angola has yet to agree with the IMF on a structural
adjustment program.

4.  Debt Management Policies

    The government began substantial foreign borrowing only in
the early 1980's, principally to finance large oil sector
investments.  Prior to the 1986 slump in international oil
prices, the government scrupulously met its foreign debt
commitments, even those contracted prior to independence. 
Subsequently, however, large payment arrears, estimated by the
IMF to be over $3.1 billion at the end of 1992, have forced
major Western export credit agencies to suspend or highly
restrict cover to the country.

    Total foreign debt is now over $8 billion and at the end of
1992 was 97 percent of GDP and 202 percent of exports,
according to the IMF.  Approximately half of the debt is owed
to the former Soviet Union and its former satellites for
military purchases between 1975 AND 1991.

    In 1989, Angola joined the IMF and the World bank, and was
able to secure the rescheduling of over $1.8 billion in Paris
Club and other debt.  Creditors subsequently rescheduled $669
million of Angola's non-Paris Club debt in 1990, but only about
$40 million in 1991 and 1992.  The government has admitted that
it will be unable to lighten its debt burden without an
agreement with the IMF on structural adjustment of the economy.

5.  Significant Barriers to U.S. Exports

    The establishment of diplomatic relations between the U.S.
government and the Republic of Angola effective June 18, 1993
has in effect ended the previous legal constraints on U.S.
Exports, namely the prohibition of extension of Export-import
Bank (EXIM) cover, and the denial of foreign tax credits for
U.S. entities earning income in Angola.  EXIM cover is not
available at the present time, however, because of the elevated
business risk in Angola and Angola's extensive outstanding

    The Overseas Private Investment Corporation (OPIC) has yet
to commence issuing insurance policies and other guarantees for
U.S. private investments in Angola pending the signing of an
investment agreement between OPIC and the Republic of Angola.

    The U.S. Department of Agriculture (USDA) made $10 million
dollars in agricultural export loan guarantees available to
Angola for the purchase of U.S. agricultural products under the
GSM-102 program for 1992.  However, only $5 million in
guarantees were used, and Angolan financial authorities built
up arrears of $3 million.  This prevented the renewal of
GSM-102 loan guarantees for 1993.  In September of 1993, these
arrears were cleared, enabling USDA to consider the
appropriateness of a GSM-102 program for Angola in 1994.

    The U.S. government continues to prohibit the transfer of
U.S.-origin lethal material to all entities in Angola under the
"triple zero clause" of the Bicesse Peace Accords and
international traffic in arms regulations, and to prohibit by
executive order the transfer of all defense articles and
petroleum products to UNITA.  The U.S. government has lifted
the restriction on the private transfer of U.S.-origin
non-lethal defense articles to the Government of Angola, with a
presumption of approval of applications for export licenses for
such transfers.

    Since the sharp decline of its coffee and diamond sectors,
Angola's ability to import has depended entirely on oil
earnings, and has been severely constrained by the diversion of
resources to defense spending since the return of hostilities
in late 1992.  According to Angolan and foreign importers, the
procurement of import licenses from government authorities has
become easier during 1993.  The process, however, still lacks
transparency, especially in the acquisition of import licenses
for goods to be purchased with government-provided foreign

    The Angolan government is in the process of revamping its
foreign exchange allocation process.  The government still
plays a significant role in imports through the activities of
state firms and ministries, despite recent attempts at

    The government claims that up to 90 percent of its
expenditures are currently dedicated to the defense effort;
individual importers report that it is very difficult to
receive payment from the government for imports not related to
defense or foodstuffs.  Foreign investment regulations enacted
since the late 1980's have been aimed at opening up more
sectors to foreign investment, and at simplifying the process
for potential foreign investors.  Regulations and the lack of
implementation of reforms continue to prohibit or limit foreign
investment in defense, banking, posts and public
telecommunications, the media, and air and long-distance
maritime transport.

6.  Export Subsidies Policies

    No export subsidy schemes currently exist, although among
the measures proposed but not yet implemented is a foreign
exchange retention scheme as an incentive for non-oil export

7.  Protection of U.S. Intellectual Property

    The Republic of Angola joined the World Intellectual
Property Organization in 1985, but has not adhered to any of
the principal conventions on intellectual property.  There is
no known domestic legislation on intellectual property rights.

8.  Worker Rights

    a.   Right of Association

    The 1991 constitution recognizes the right of Angolans to
form trade unions and to bargain collectively.  The law
governing unions has yet to be passed; free labor organizations
cannot yet affiliate with international labor bodies.  The
National Union of Angolan Workers (UNTA), the official union of
the ruling MPLA, remains the principal worker organization. 
Unta is affiliated with the Organization of African Trade Union
Unity and the formerly communist-dominated World Federation of
Trade Unions.

    b.   Right to Organize and Bargain Collectively

    The constitution provides for the right to strike. 
Legislation passed in 1991 provides the legal framework to
strike, including prohibition of lockouts, protection of
nonstriking workers, and prohibition of worker occupation of
places of employment.  Strikes by military and police
personnel, prison workers, and firemen are prohibited.  The
ministry of labor and social security continues to set wages
and benefits on an annual basis.  Salaries for public servants
are set at the minister's discretion; salaries of parastatal
employees are based on profits of the previous year and
available loans from the central bank.  Angola has no export
processing zones.

    c.   Prohibition of forced or compulsory labor

    New labor legislation prohibits forced labor, reversing
previous laws and provisions which had been cited by the
International Labor Organization (ILO) for violation of
Convention 105.  The previous legislation authorized forced
labor for breeches of worker discipline and participation in

    d.   Minimum Age of Employment of Children

    The legal minimum age for employment in Angola is 14.  The
inspector general of the Ministry of Labor is responsible for
enforcing labor laws.  Labor Ministry registration centers
screen out applicants under the age of 14.  However, children
at a much younger age work throughout the informal sector.

    e.   Acceptable Conditions of Work

    The monthly minimum wage stands at 120,000 kwanzas,
equivalent to about $18 at the official exchange rate but less
than $2 at the parallel market rate.  Most workers depend on
the thriving informal sector, second jobs at night, subsistence
farming, theft, corruption, or overseas remittances to maintain
an acceptable standard of living.  The normal workweek is 44
hours.  No information is available on adequacy of work
conditions or health standards, but in most cases it is assumed
they do not approach Western standards, given the extreme
underdevelopment of the Angolan economy, lack of enforcement
mechanisms, and the war.

    f.   Rights in Sectors with U.S. Investment

    U.S. investment in Angola is concentrated in the petroleum
sector.  There is no specific information available on the
conditions for workers in this sector.

         Extent of U.S. Investment in Selected Industries

              U.S. Direct Investment Position Abroad
                on an Historical Cost Basis - 1992
                    (millions of U.S. dollars)

Category                               Amount

Petroleum                                        D
Total Manufacturing                              0
    Food & Kindred Products            0
    Chemicals and Allied Products      0
    Metals, Primary & Fabricated       0
    Machinery, except Electrical       0
    Electric & Electronic Equipment    0
    Transportation Equipment           0
    Other Manufacturing                0
Wholesale Trade                                  0
Banking                                          0
Finance and Insurance                            D
Services                                         D
Other Industries                                 0

TOTAL ALL INDUSTRIES                             D

(D)-Suppressed to avoid disclosing data of individual companies

Source:  U.S. Department of Commerce, Bureau of Economic

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