Angola - an Oil Dependant Country in Sub-Saharan Africa

Abstract

The Sub-Saharan Africa belongs to the most underdeveloped regions in the world economy. This region consists of forty nine countries but it’s world GDP share is only a small percentage. There are some very resource rich countries in this region. One of them is Angola. This former Portuguese colony has one of the largest inventories of oil among all African countries. Angola recorded one of the highest growth of GDP between 2004-2008 from all countries in the world economy and nowadays is the third biggest economy in Sub-Saharan Africa after Nigeria and South Africa. The essential problem of Angola is the one-way oriented economy on oil and general on natural resources. Angola will be forced to change their one-way oriented economy to be more diversified and competitive in the future.

Diffusion of Innovations and Labor Market Challenges: A Multiple Case Study from Angola

“…Angola is located on the west coast of southern Africa with an area of 1,246.700 km 2 that was discovered by the Portuguese explorers in 1482, becoming then a trade link with Southeast Asia and India and later a major source of slave trade for Portugal's colonies in Brazil and Caribbean (Nakabashi et al, 2013;Ojo, 2015;Silva et al, 2015). With the end of the slave trade by 1878 (Ball, 2017), an uprising between Angolan national liberation movements in 1950 led to a civil war conflict that lasted 27 years, which culminated to Angola's independence in 1975 and the end of the armed conflict by 2002 (Baumgartner, 2016a;Silva et al, 2015).…”

“…The end of the armed conflict led the Angolan government to engage in post-war reconstruction programs financed mainly from the oil revenues (Baumgartner, 2016a;OECD, 2014;Silva et al, 2015). Among the reconstruction priorities were public policy reforms, consolidation of institutions, establishment of a fiscal system, infrastructure constructions, and the development of an economic diversification program (Cortes, Roberto, & Dias, 2014;Neto & Jamba, 2006;Taylor, 2014).…”

“…The forward projections of the Angolan government regarding its economy growing amongst the higher growth rate economies worldwide, made it highly vulnerable to corruption and oil price shocks since it relied on oil revenues alone for its economy backbone (Bhattacharyya & Hodler, 2010;Baumgartner, 2016a;International Monetary Fund [IMF], 2015).…”

“…Despite the financial efforts, the remarkable recovery for over 40 years of independence, increase in oil production and investments in many sectors Angola was still being regarded as one of the world's richest poor countries ( (Baumgartner, 2016a;OECD, 2014;Power, 2011 Cain, 2017;Power, 2011;Tembe & Xu, 2013). Yet, it was reported that there is an absence of employment opportunities in the oil industry and the population has benefited little from it with almost no forward or backward linkages with the onshore economy, as such, researchers regarded the Angolan oil industry as an enclave (Golub & Prasad, 2016;Power, 2011).…”

“…According to researchers, natural resources may lower a country's economic performance and the efficiency of the public sector regarding employment because they foster rent-seeking activities (Bhattacharyya & Hodler, 2010). Heavy dependence on exports was pointed as one of the factors that hindered development and industrialization because the volatility of this sector can make other labor sectors less competitive (Baumgartner, 2016a;Habiyaremye, 2013). Scholars argued that slavery and bonded labor system can exert a persistent impact over centuries and can create social structures that impede the development even long years after independence (Bezemer, Bolt, & Lensink, 2014).…”