Angola told to face new era without oil

Economist Manuel Nunes Júnior (photo: António Escrivão) Economist Manuel Nunes Júnior (photo: António Escrivão)

Angola must create objective conditions to face a new cycle of political, economic and social stability without relying on oil that represents 95 percent of the country’s exports, said economist Manuel Nunes Júnior.

According to the economist, although the weight of this sector in the constitution of the Gross Domestic Product dropped by about 60% in 2002 to about 35% in 2015, the country is still strongly dependent on the extractive activity, the reason why the fall in the oil price in the world market has induced to a fall in the country’s foreign values, with a resulting pressure on the country’s exchange reserves.

Manuel Nunes Júnior was delivering a lecture on the “impact of the fall in the oil barrel price in the world market and the Government’s measures to ensure continued growth of the national economy,” at the 6th Forum on Business Opportunity and Investments held in northern Uige province.

He said there is a pressure on the foreign reserves, due to the country’s imports and other external commitments.

The economist stated that the fall in the inflow of strong currency as a result of the drop in the oil price is creating constraints in the country’s monetary and exchange market, mentioning that in the first quarter of 2016 the foreign exchange sold by the reserve bank to the commercial banks stood at about Usd 721 million, against Usd 3.9 billion of the corresponding period of 2014.

The specialist explained that in the first quarter of 2016, the average sale stood at Usd 300 million a month, against the first quarter of 2014 that recorded sales of Usd 1.3 billion a month.

As a result of the situation facing the country, he recalled, the annual accumulated inflation until 2014 was 7%, while in March of 2016 the inflation stood at 23,60%.

On the other hand, the State Budget for 2016 was drafted on the basis of an oil barrel reference price of Usd 45, while the average oil rate of export this same year was Usd 31,5, which represents a Usd 13,5 deficit.

According to Nunes Júnior who is also a lecturer in the faculty of Economics of the Agostinho Neto University, due to the strong dependence on the oil activity, there has been an impact on non-oil activity and job.

In order to reverse the present situation, Manuel Nunes defends a strategy based on a short term increase in the production and control of exportable products to attract foreign values into the country.

Source: Angop