Oil, Growth and Political Development in Angola
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Angola is more dependent on oil than any other country in Sub Saharan Africa and most
other countries as well, apart from a handful of OPEC members. Contributing half or more of
GDP, oil revenues condition and distort every other macroeconomic variable in the country, a
situation that has existed for decades. Appreciation of the real exchange rate is the main
macroeconomic distortion resulting from these inflows of mineral income. The paper
demonstrates a marked tendency for the Angolan Kwanza to appreciate in recent years, and
continuation of this trend is one of the biggest threats to economic rehabilitation of Angola’s
war-torn non-oil economy. Resulting economic distortions are quantified using an index of
distortion based on Chenery-Syrquin “standard” growth paths of economic structure. Optimal
savings and expenditure rates out of mineral income are calculated based on a permanent income
approach to optimal expenditure over time. Finally, implications of oil revenue for the future
political development of Angola’s main parties are discussed.