Angola's economy: an oil state past its oil peak

How oil came to carry the state

Petroleum was first found in Angola in 1955, under the coastal plain, and the reserves turned out to lie mostly offshore, in the waters off Cabinda and the Congo estuary. The crude is generally of good quality and low in sulphur, which is why Chinese refineries seek it. A state company was set up in 1977 to enter joint ventures and production-sharing agreements, and management of the fields was left largely to foreign firms. Control of the industry is now consolidated in Sonangol, a group owned by the state.

The war largely spared the oil industry. Britannica records that it was neither nationalised nor regulated after independence, that it was protected from the fighting, and that it was the only industry producing regular income through the 1980s and 1990s. Everything else collapsed. Portuguese owners and skilled workers left at independence in 1975; the MPLA government nationalised foreign capital and set exchange rates artificially high; by the late 1980s defence took almost half the budget. Inflation exceeded 900% in 1994 and 2,500% in 1995. Food had to be imported or supplied as aid, and coffee, once the main colonial export crop, effectively ceased to be produced until the war ended.

Peace in 2002 released the oil boom. Production passed 1.4 million barrels a day in late 2005. The economy grew by 18% in 2005, 26% in 2006 and 17.6% in 2007, and China extended three large lines of credit: US$2 billion from China Exim Bank in 2004, a second of the same size in 2007, and US$2.9 billion from China International Fund in 2005. The 2004 line was lent for rebuilding infrastructure, and the Benguela Railway was later rebuilt under a rail-for-oil programme. Angola joined OPEC in 2007.

Why oil output has fallen since its peak

Output peaked at about 2 million barrels a day in 2008. By 2022 it had fallen to an average of 1.165 million barrels a day, according to the national oil, gas and biofuels agency, ANPG, and in July 2025 it averaged 998,757 barrels a day, against a government forecast of 1,073,542. That was the first month below a million since March 2023.

OilPrice.com, reporting the ANPG figures in August 2025, attributes the decline to underinvestment in offshore fields, whose development costs had risen enough to turn many companies away. The IMF counted oil production at 1.03 million barrels a day across 2025 and projected 1.05 million for 2026 and 2027. Its oil sector shrank by 5.2% in real terms in 2025 while the rest of the economy grew by 5.2%, and total growth came to 3.1%.

The IMF's board, concluding its consultation on 1 May 2026, called the fall in oil revenue structural. The table sets out the figures its staff published.

What leaving OPEC changed

Angola announced in December 2023 that it would leave OPEC on 1 January 2024, after 16 years. The break was over a quota. Angola had been unable to meet its OPEC+ target for several years, according to Reuters, and in November 2023 the group lowered its 2024 target to 1.11 million barrels a day after outside analysts reviewed the production figures. Angola had asked for 1.18 million and sent a note of protest. At the time of its exit it produced about 1.1 million barrels a day, against about 28 million for the whole group, and it had taken part in the OPEC+ agreements with Russia and other non-members since 2017. Reuters noted that it joined a line of smaller producers to leave, after Qatar in 2019 and Ecuador in 2020.

Leaving removed a ceiling Angola was not reaching, and OilPrice.com observed in August 2025 that a year and a half after the exit, output stood where it had been seven months before it. With crude flat, the government has turned to natural gas as a way to earn more from the same fields.

Where the oil money went

Growing oil revenue also created opportunities for corruption. Human Rights Watch reported that US$32 billion disappeared from government accounts between 2007 and 2010. Sonangol was taxpayer, investor of public funds and sector regulator at once, a mix the World Bank described as weakening the formal budget process.

In January 2020 leaked documents known as the Luanda Leaks showed that consulting firms had helped members of the family of the former president, José Eduardo dos Santos, run Sonangol for their own profit. His daughter Isabel had been dismissed as head of Sonangol in November 2017, and his son José Filomeno was sentenced in August 2020 to five years for fraud committed while heading the sovereign wealth fund.

The IMF approved a three-year Extended Fund Facility of about US$3.7 billion in December 2018, after the collapse of oil prices in 2014, and the programme concluded in 2021. In its 2026 assessment the IMF's board asked for any oil windfall to go on paying down debt, for fuel subsidies to be reformed and for Angola to act on the plan that would take it off the Financial Action Task Force's grey list.

What the kwanza and prices have done

The Banco Nacional de Angola issues the kwanza and acts as the central bank; banks were nationalised after independence, foreign banks returned from 1985 and private banks were allowed from 1995. The kwanza averaged 912 to the US dollar in 2025 on the IMF's figures and ended the year at 923.

Inflation fell from an annual average of 20.2% in 2025 to 12.4% in March 2026, which the IMF attributes partly to tight monetary policy, and the bank held international reserves of US$15,895 million at the end of 2025, enough for 7.4 months of imports. The board asked for the exchange rate to be aligned with the market-clearing rate and for rules on when the bank intervenes. The capital market opened on 19 December 2014, when the Angola Stock Exchange and Derivatives, BODIVA, was given the secondary market in public debt.

Why Angola buys so much of its food abroad

Before independence Angola exported coffee, sisal and maize, and Britannica puts its coffee output at more than 200,000 tons a year in the early 1970s, almost a fifth of world production. Coffee came from the Malanje highlands and the north-western edge of the Bié Plateau, grown on estates worked by forced and contract labour. The estates were nationalised after 1975, the traders who ran rural distribution left, and landmines closed farmland across the country.

More than 90% of farming is now done by families at subsistence level, and cassava is the main crop. The African Economic Outlook reported that Angola needs 4.5 million tonnes of grain a year and grows about 55% of the maize, 20% of the rice and 5% of the wheat it requires, and the World Bank estimated that less than 3% of the country's fertile land is cultivated. Food comes in expensively, mainly from South Africa and Portugal.

The sea is the other lost industry. Before independence about 700 fishing vessels worked the cold Benguela Current, employing some 13,000 people, and by the early 1980s fewer than a seventh of them still fished, because their Portuguese owners had sailed them away. Foreign fleets then overfished the grounds.

How diamonds and the Lobito railway fit in

Alluvial diamonds lie across the north-east, a high proportion of them of gem quality, and mining there has run since 1912. The state company Endiama approves concessions and licenses buyers, and works in partnership with foreign miners such as ALROSA. During the war the diamond fields paid for UNITA, which held many of them until 2002.

The Benguela Railway, begun in 1902, runs from the port of Lobito to the Congolese border. In 1973 it carried 3.3 million tons of freight and employed 13,000 people; by 2002 only 34 kilometres near the coast were working. Chinese contractors rebuilt it between 2006 and 2014 under a rail-for-oil programme worth about US$2 billion. On 4 July 2023 a consortium of Trafigura, Mota-Engil and Vecturis took a 30-year concession, conditional on investing US$455 million in Angola and US$100 million in the Democratic Republic of the Congo, and the United States and the European Union announced support for the corridor in September 2023. The first trial trains carried copper from the Kamoa-Kakula mine in the Congo to Lobito in December 2023.

In Luanda, the Dubai-based DP World took a 20-year concession on the port's multipurpose terminal in January 2021 and pledged about US$190 million to raise its capacity to roughly 700,000 containers a year.

What the rest of the economy makes

Manufacturing grew quickly in the last years of colonial rule and was hit hardest by independence, when nationalisation and the departure of skilled workers came together. What factories there are produce construction materials, refined petroleum and equipment for the oil industry, processed food, textiles and electrical goods. Output fell through the quarter century of war for want of raw materials, power and transport. In the 1990s the government began privatising businesses and wrote a new foreign investment code, and after 2002 construction took off because reconstruction came first.

Electricity comes mostly from dams on the Cuanza, Cunene, Catumbela and Dande, built where the rivers drop from the escarpment to the coastal plain. UNITA attacks kept much of that capacity out of use into the early 2000s, and repair and new building began after the war ended.

Telecommunications followed a similar arc. The state monopoly ended in 2001, the same year a new mobile network opened, and broadband has been available since 2003, though access outside Luanda stayed limited. Management of the .ao internet domain passed from Portugal to Angola in 2015. The first national satellite, AngoSat-1, launched on 26 December 2017, lost contact the next day and was declared inoperable; AngoSat-2 went up on 12 October 2022.

The government presents tourism as a way to spread activity across the provinces and reduce dependence on hydrocarbons, according to UN Tourism, which reported 223,140 international arrivals in 2025, 28% more than in 2024, and projected foreign direct investment in tourism of US$3 billion for 2025; travel in Angola covers what those visitors find.

Who shares in the growth

Britannica put gross national income per head at US$2,840 in 2024. The 2008 survey by the Instituto Nacional de Estatística classed 37% of Angolans as poor, 58% in the countryside and 19% in the towns. The 2024 census found that 44.9% of households had electricity from the public grid and 29.4% cooked on firewood, with the grid reaching 74.8% of households in Luanda province and 8.6% in Moxico Leste.

The gap is regional as well as social. About a third of economic activity is concentrated in Luanda and the neighbouring province of Bengo. The IMF's statement of May 2026 calls the medium-term outlook subdued and expects growth to depend on the success of diversification. The politics of Angola turned on the same questions in 2022, when jobs and corruption dominated the campaign.