In the third quarter of 2024, Angola’s current account surplus reached USD 2.1 billion, equivalent to 8.4% of GDP, according to data from the central bank (BNA).
This marks a 41.6% increase quarter-on-quarter but is USD 248 million lower than Q3 2023. The annual decline was primarily due to a USD 304 million decrease in exports, reflecting lower oil prices and increased fuel import costs. The trade balance remained positive, recording a USD 5.8 billion surplus, though slightly lower than the USD 6.2 billion surplus seen a year earlier. Meanwhile, the services account deficit widened to USD 1.97 billion, reflecting ongoing payments for external services in oil, transport, and construction sectors. However, the income account deficit improved to USD 1.7 billion, down from USD 2 billion in Q3 2023, driven by reduced dividend payouts and lower interest expenses.
The capital and financial account recorded a deficit of USD 1.38 billion, compared to USD 1.30 billion in Q2 2024, with the financial account making up the majority of this figure. Encouragingly, FDI inflows rose to USD 2.4 billion, up from USD 1.9 billion in Q3 2023. Despite this improvement, FDI outflows remained significant at USD 2.0 billion, although they decreased from USD 2.5 billion a year earlier. A notable reduction was observed in medium and long-term capital account deficits, owing to timely government and oil sector debt repayments. At the end of Q3, Angola’s international reserves stood at USD 14.9 billion, providing 7.9 months of import cover for goods and services.
The data highlights Angola’s high dependency on global oil markets, which exposes the country to volatility in oil prices and foreign exchange earnings. While increased FDI inflows signal positive investor confidence, Angola remains vulnerable to exchange rate pressures and external debt servicing challenges, exacerbated by its weaker currency. Diversification of exports remains a key priority to reduce reliance on oil revenues and stabilise economic performance over the long term.
Looking ahead, Angola’s ability to manage its external debt sustainably will be crucial to maintaining balance of payment stability and mitigating currency risks. The trade balance, while robust, faces continued pressure from fluctuating global oil prices and rising import costs.
However, improvements in the income account and efforts to attract further FDI suggest cautious optimism for Angola’s economic resilience and ongoing reform agenda.
Further Africa
