Angola- Trade & Development

Angola Trade & Development 
         With trade representing over 50% of Angola's GDP[1], it is safe to say that any changes in trade will have a profound effect on Angola's domestic economy. It will be important for Angola to maintain trade relationships and reduce barriers as much as it can for its economy to grow. With that in mind, Angola is largely dependent on the exports of natural recourses which means that producers must keep a close eye on foreign politics that could potentially influence the price of a good. An excellent case of this occurring is with oil. Oil accounts for an astounding 95% of Angola's exports,   and with such a volatile good, a large percentage of their economy can be punished for a political situation of which they aren't even a part of[2]. For instance, US-China tariffs may halt each country's demand for crude oil which ends up damaging Angola's exports to each of these countries, which both happen to be large trade partners with Angola. In addition to oil prices, there are other barriers to economic growth such as customs. Although customs duties are relatively low at 9.5%[2] Angola has adopted the SADC (Southern African Development Community) guidelines which ban the import of biotech particles. Overall there is poor efficiency at ports which makes delays at customs a big problem. Not only could this delay growth, but also economic development if biotechnology particles are being used to develop pharmaceutical products that benefit the health of Angolan citizens. Generally speaking Angola is pro free trade and do not deal with many foreign barriers when it comes to imports and exports. Specifically they are apart of the SADC, the ECCAS (Economic Community of Central African States), and have signed the African Continental Free Trade Agreement as well.  Because of Angola's situation in regard to natural resource production, they are sort of required to adopt a free trade system and rely on their oil revenue. In terms of trade surplus, Angola has been successful in this regard generating 35 billion in exports and only 28 billion in imports[2]. 

[1] “Merchandise trade (% of GDP)” World Bank: Data, The World Bank https://data.worldbank.org/indicator/TG.VAL.TOTL.GD.ZS?locations=AO&view=chart

[2]Country Risk of Angola : International Trade, import-export.societegenerale.fr/en/country/angola/trade-country-risk.

Comments

  1. Dr. Q February 19, 2020 at 7:48 AM

    Is the country pursuing any measures to increase diversification in their exports? What is their trade strategy?

    ReplyDelete

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