ANGOLA – Home to one of the most expensive cities in Africa and one of the least diversified economies, Angola wants to be known for something entirely different: being a magnet for private investment.

The country’s economy has been fueled by oil, which accounts for a third of its GDP and 95 percent of exports. This has been a boon for a few segments of the population, spurring the development of glossy high-rises in Luanda. 

Since taking office in 2017, President João Lourenço and his administration have begun to enact reforms to promote investment and boost competitiveness.

The government embarked on a comprehensive privatization process with an initial 195 companies or assets across all sectors expected to be privatized. 

“Up to now the incentives in Angola were very focused on using the revenues from the oil sector.

“The government is fully committed to having a proper ecosystem to boost the economic diversification the country needs,” said Daniel Santos, chairman of the executive committee at Banco Millennium Atlântico, one of the country’s largest banks.

Angola was once a significant producer and exporter of agricultural products from coffee to sugarcane, but exports nearly ceased by the 1990s due to poor global prices and lack of investment. 

Agriculture output has been rising, though—and more private investment could facilitate agribusiness diversification, as highlighted in the World Bank Group’s Country Private Sector Diagnostic (CPSD) for Angola.

The report, published in 2019, examined key areas where private investment could play a pivotal role in opening the economy and driving growth.

Angola’s abundance of fresh water and arable land—as well as its location on the Atlantic coast—makes it particularly attractive for investments in agriculture. 

The CPSD noted that Angola’s investment climate would benefit from broad reforms and improved regulations, and that the transport, power, and ICT sectors need sustained investment, improved regulations, and increased know-how to deliver reliable, affordable services.

Additionally, only a fifth of the country’s roads are paved and less than a third of its people has access to electricity—leaving most businesses reliant on diesel generators. 

Financial services are also limited. Around 92 percent of small businesses in Angola don’t have access to finance while less than a third of the population has banking accounts. 

Efforts are underway to help alleviate these challenges and facilitate investment. IFC and the World Bank are working in collaboration with the Angolan government and the private sector on the agribusiness space in Angola to strengthen the agriculture supply chain, promote investment in the sector, and link small businesses to agriculture markets.

“Angola has a lot of potential to do high-value, large-scale agriculture,” said Hector Gomez Ang, IFC’s Country Manager in Angola. “The recent reforms have unleashed Angola’s entrepreneurial spirit, creating an exciting, fast-moving environment.”