The Portuguese once ruled an empire that included Brazil, Angola and Mozambique, among other smaller possessions. But since the loss of empire Lisbon has fared rather poorly. First it was the Brazilians who managed to economically dominate their former colonizers. The Angolans are beginning to also get in the game. Angola is one of the top three oil producers in Africa, and has the third largest economy in Sub-Saharan Africa.
The BBC reports:
Portugal’s prime minister is travelling to oil-rich Angola, which is boosting its investment in its former colonial power caught up in the eurozone debt crisis.
Angolan presidential aide Carlos Maria Feijo said Portugal’s privatisation scheme would be discussed. The International Monetary Fund has ordered Portugal to sell state companies to qualify for a bailout.
Angola’s investments in Portugal have risen sharply in recent years.
The figure in 2009 stood at $156m (£99m), compared to $2.1m in 2002, according to the Portuguese Institute of International Relations and Security (IPRIS), a Lisbon-based think-tank.
Angolan companies own the equivalent of 3.8% of companies listed on Portugal’s stock exchange, from banks to telecoms and energy, it says.
More on this here.
HT Louise Redvers
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The oil price shock is adversely impacting the economy. Angola’s oil basket is projected to average US$53 per bbl in 2015, from slightly over US$100 per bbl in 2014, leading to large declines in fiscal revenue and exports. While oil production has recovered following the completion of maintenance work, non-oil GDP growth is expected to decelerate to 2.1 percent in 2015. The industrial, construction and services sectors are adjusting to the decline in private consumption and public investment and lingering difficulties to obtain foreign currency. Inflation is projected to reach close to 14 percent by end-2015, exceeding the National Bank of Angola (BNA)’s 7-9 percent objective. The 2015 budget will allow the central government deficit to fall to 3.5 percent of GDP, compared to 6.4 percent last year. Public debt, however, is projected to increase significantly to 57.4 percent of GDP, of which 14.7 percent of GDP corresponds to the state-owned oil company Sonangol, by end-2015. The external current account deficit is expected to reach 7.6 percent of GDP in 2015; and international reserves to drop to US$22.3 billion (about 7 months of 2016 imports) by end-2015. Meanwhile, a wide spread emerged between the parallel and primary market exchange rates, pointing to an imbalance in the foreign exchange market.
kenopalo.com 