Angola Records Strongest Growth Since 2014, But Urged to Deepen Financial Reform

Angola's economy registered its most robust expansion in a decade, with real GDP growth surging to 4.4% in 2024—the highest since 2014—driven by a recovering oil sector, an upswing in diamond extraction, and notable growth in commerce and fisheries. However, despite this encouraging rebound, the country remains burdened by structural weaknesses and high inequality, according to the latest Angola Economic Update (AEU) published by the World Bank Group under the title Boosting Growth with Inclusive Financial Development.

Recovery Driven by Natural Resources, But Structural Weaknesses Persist

The report attributes the sharp turnaround in economic performance primarily to the revival of Angola’s oil output, following years of production decline, and a booming diamond industry benefiting from improved global demand. Strong growth in commerce and fishing also contributed to the overall performance.

Yet, the World Bank warns that underlying vulnerabilities remain entrenched. From 2016 to 2020, Angola’s economy contracted by 10.4%, averaging an annual decline of 2.1%, largely due to overreliance on oil exports, global price volatility, and delayed structural reform implementation.

While the 2024 growth rate marks a significant shift, medium-term growth projections remain modest, with GDP expected to average 2.9% from 2025 to 2027. This pace, the report argues, will be insufficient to substantially improve living standards or reduce poverty levels without broad-based reforms.

“The Angolan economy is in urgent need of establishing a consistent pathway toward robust growth to address nearly a decade of stagnation and to improve conditions for poverty alleviation,” said Juan Carlos Alvarez, World Bank Country Manager for Angola.

Financial Inclusion Key to Long-Term Resilience

The AEU makes a compelling case for Angola to focus on inclusive financial development as a critical pillar of its economic transformation. Access to financial services, especially in rural and underserved areas, remains alarmingly low. Women, older adults, and remote communities are among the most excluded.

Compared to other Sub-Saharan African countries, Angolan households have:

• Limited access to credit and savings

• Poor uptake of digital financial services

• Low penetration of insurance coverage

This exclusion, the report states, stifles small business development, weakens economic resilience, and perpetuates income inequality.

“Financial inclusion can reduce inequality by empowering the marginalized to build assets and access opportunities,” noted Benedicte Baduel, World Bank Senior Country Economist for Angola.

Pathways for Reform: Building a Resilient and Inclusive Financial Sector

To unlock inclusive growth and reduce systemic vulnerability, the World Bank outlines a series of targeted reforms that can reshape Angola’s financial landscape. These include:

• Expanding digital payments infrastructure to bridge access gaps in remote regions

• Enhancing usability of digital platforms to drive mass adoption

• Establishing enabling regulation to support microcredit and SME lending

• Boosting lending to MSMEs, with transparency and better market alignment of support initiatives

• Strengthening Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) frameworks under the Financial Action Task Force (FATF) Action Plan

• Promoting insurance uptake, including weather-indexed agricultural insurance for rural livelihoods

These interventions, the report argues, will be vital to diversify the economy, broaden the tax base, and build buffers against commodity shocks—key goals as Angola transitions toward a more inclusive and innovation-driven growth model.

Regional Connectivity and Economic Corridors

The report also stresses the importance of spatial inclusion in Angola’s financial development strategy. Focus areas include:

• Enhancing access to financial services beyond Luanda

• Supporting economic activity in secondary cities and along the Lobito Corridor

• Improving infrastructure connectivity to facilitate rural economic integration

A Window of Opportunity Amid Global Uncertainty

With mounting global uncertainty, including the threat of declining oil prices, the report emphasizes that Angola cannot afford complacency. The current recovery offers a critical window to implement long-delayed structural reforms that could generate inclusive and sustained economic momentum.

“There is optimism that the comprehensive economic reforms currently being implemented by the government will produce positive outcomes and unlock the country's potential,” Alvarez noted.

The Angola Country Economic Memorandum: A Deeper Dive

The AEU was published alongside the Angola Country Economic Memorandum (CEM), which provides an in-depth analysis of sectoral reform needs, including agriculture, manufacturing, logistics, and services. The CEM highlights key opportunities to reduce import dependency, stimulate local production, and create jobs through value-added industries.

Inclusive Finance as a Foundation for Transformation

While 2024’s growth signals a welcome rebound, the report warns that without financial inclusion and structural reform, Angola risks slipping back into stagnation. By empowering underserved populations, modernizing financial infrastructure, and fostering SME development, Angola can build a resilient, diversified economy that delivers real improvements to its people.