[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-108331-en":3,"doc-seo-108331-105":30,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":13,"seo_description":14,"update_tm":28,"read_time":29},108331,3848291630094,"Emma Wilson","https://eur-avatar.wpscdn.com/davatar_085a072bc5b1113ac321206ff7593b45",8,"Research & Report","Angola Public Finance Review Executive Summary - February 28, 2023","Oil revenues have driven Angola’s fiscal performance while amplifying macroeconomic instability through high dependence on volatile oil prices. Public expenditure followed a pro-cyclical pattern, expanding when prices rose and contracting sharply when revenues fell, with limited use of debt as a counter-cyclical buffer. Declines in oil prices contributed to currency devaluation, rapid growth in debt-to-GDP, and rising interest costs that forced deep cuts in non-interest spending. Savings from oil windfalls were insufficient due to weak implementation and poor sovereign fund effectiveness, leaving limited fiscal space and prolonged recessionary pressures.","Public Disclosure Authorized Public Disclosure Authorized  \nReport No: AUS0003257  \nAngola  \nPublic Finance Review Executive Summary  \nFebruary 28, 2023  \nMTI  \nExecutive Summary  \nOil brought substantial revenues to Angola – but also created large fiscal challenges  \nThe oil and gas sector brought substantial revenue to Angola’s public coffers, but the heavy dependence of fiscal revenue on the oil sector tied fiscal policy to volatile oil prices. The steep rise in oil prices until 2008, and renewed high prices between 2010 and 2014, provided the Angolan government with a large windfall in revenue. From 2000 to 2014, oil revenue surged and provided, on average, 78 percent of the government’s total revenue (Figure 1) . This income supported government spending and economic growth but also led to an appreciation of the real effective exchange rate (REER), which contributed to Angola’s lack of economic diversification and reinforced the economic and fiscal dependence on oil. Even as oil prices declined in 2014–2016 and again in 2020, with accompanying reductions in oil production, the share of oil revenue in total fiscal revenues remained high at 55 percent in 2015–2021 . Accompanying the volatility of oil prices, oil revenues were also volatile, with an average year-to-year variation of 28.5 percent (in local currency terms, adjusted for inflation) .  \nAngola’s public expenditure closely followed the patterns in oil revenue and the oil price cycle. While price-driven revenue volatility is inevitable for a country with large oil exports, in Angola, fiscal expenditures have also closely followed oil price trends, as shown in Figures 1 and 2. Put differently, public expenditure followed a pro-cyclical pattern, rapidly increasing when oil prices and revenues rose, and decreasing when oil prices dropped. All major expenditure categories followed this procyclical pattern, but spending on investments and goods and services has been particularly affected.  \nFigure 1: Angola Real Fiscal Revenues in constant Kz bn. And Oil Price 1995-2020  \nSource: Ministry of Finance of Angola  \nFigure 2: Angola Real Fiscal Expenditures in constant Kz bn. And Oil Price 2000-2020  \nPro-cyclical expenditure patterns also result  \nfrom Angola not using debt as a counter-cyclical tool to finance higher deficits in periods of low oil prices. Instead, borrowing was mildly procyclical, as financing was more easily available during times of high oil prices. As a result, until 2019, external debt increased steadily in times of both high and low oil prices. Angola’s public debtto-GDP ratio was particularly sensitive to volatile oil prices. As the slump in international oil prices led to an eventual devaluation of the currency (Angolan Kwanza) in 2019, and GDP in US dollar terms fell sharply, the ratio of (mostly foreign currency-denominated) debt to GDP went from 39.8 percent of GDP in 2014 to over 130 percent  \nby 2020 (Figure 3), even as borrowing decreased in response to the creditor retrenchment given  \nthe higher perceived risk. Notably, however, just as the debt-to-GDP ratio grew rapidly when oil prices fell, it shrank as oil prices increased after 2020, strengthening the Kwanza.  \nFigure 3: General Government Gross Debt (% of GDP)  \nSource: IMF  \nFigure 4: Estimate of Angola’s fiscal windfall and uses 2004–2014 (US$ billion)  \nSource: WB calculation based on data from the Ministry of Finance  \nAngola attempted to save part of its oil windfalls, but due to poor implementation, savings were far short of debt accumulation. Fiscal receipts from oil during the period of rising production and prices (2004–2014) amounted to US$286 .5 billion. Angola spent 31 percent of those revenues, US$89 .6 billion, on public investments, and another 16 percent, or US$44 .7 billion, on health and education, improving the country’s human capital. The government also created four different savings mechanisms, which at their peak (end of 2014) held a cumulative balance of US$22 .7","cbCaikoXzeD1SKuO","https://ap.wps.com/l/cbCaikoXzeD1SKuO","pdf",530772,3,1,9,"English","en",105,"# Executive Summary\n## Oil revenues and pro-cyclical fiscal spending\n## Debt, currency depreciation, and interest-cost pressure\n## Oil windfalls, savings mechanisms, and fiscal space constraints","[{\"question\":\"Why did Angola’s fiscal policy remain tightly linked to oil prices?\",\"answer\":\"Oil and gas revenues supplied a large share of total government income, tying fiscal policy to volatile oil prices and limiting diversification.\"},{\"question\":\"What effects did pro-cyclical spending have on Angola’s economy?\",\"answer\":\"Expenditures rose quickly with oil-driven revenue increases and fell when prices dropped, deepening fiscal tightening during downturns and affecting investment and goods-and-services spending.\"},{\"question\":\"How did declining oil prices influence Angola’s public debt and fiscal space?\",\"answer\":\"Oil price slumps led to currency devaluation and GDP decline in dollar terms, pushing debt-to-GDP sharply higher while borrowing became more expensive and scarce, forcing expenditure cuts.\"}]",1784470484,23,{"code":4,"msg":31,"data":32},"ok",{"site_id":25,"language":24,"slug":33,"title":13,"keywords":34,"description":14,"schema_data":35,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":28},"angola-public-finance-review-executive-summary-february-28-2023","",{"@graph":36,"@context":85},[37,53,68],{"@type":38,"itemListElement":39},"BreadcrumbList",[40,44,48,50],{"item":41,"name":42,"@type":43,"position":21},"https://docshare.wps.com","Home","ListItem",{"item":45,"name":46,"@type":43,"position":47},"https://docshare.wps.com/document/","Document",2,{"item":49,"name":12,"@type":43,"position":20},"https://docshare.wps.com/document/research-report/",{"item":51,"name":13,"@type":43,"position":52},"https://docshare.wps.com/document/angola-public-finance-review-executive-summary-february-28-2023/108331/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":24,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":41,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-29","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"Why did Angola’s fiscal policy remain tightly linked to oil prices?","Question",{"text":75,"@type":76},"Oil and gas revenues supplied a large share of total government income, tying fiscal policy to volatile oil prices and limiting diversification.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"What effects did pro-cyclical spending have on Angola’s economy?",{"text":80,"@type":76},"Expenditures rose quickly with oil-driven revenue increases and fell when prices dropped, deepening fiscal tightening during downturns and affecting investment and goods-and-services spending.",{"name":82,"@type":73,"acceptedAnswer":83},"How did declining oil prices influence Angola’s public debt and fiscal space?",{"text":84,"@type":76},"Oil price slumps led to currency devaluation and GDP decline in dollar terms, pushing debt-to-GDP sharply higher while borrowing became more expensive and scarce, forcing expenditure 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