Luanda – The Minister of State for Economic Coordination, Jose de Lima Massano, on Wednesday defended the need for the country's economy to be rooted in the dynamism of the private sector to help it achieve an average annual growth in the non-oil sector of around five percent.

Speaking at the second edition of the "Economy 100 Makas" business forum, the minister stressed that the government continues to work towards building a resilient, diversified and inclusive economy, while maintaining food security as the anchor of economic and social development.

The minister said work is being done to increase local production of raw materials, training of personnel and production chains.

Massano said the country's international reserves continue to cover well over six months of imports, while the stock of credit to the economy, in national currency, reached 6.1 trillion kwanzas in December 2024, representing 11 percent of non-oil gross domestic production (GDP) at current prices.

According to the minister, the gross credit to the real sector of the economy amounted to 1.6 trillion kwanzas, 29% of the total credit to the non-financial business sector, of which 1.05 trillion kwanzas (68%).

Massano said that the main results came from initiatives such as the Program to Support Production, Export Diversification and Import Substitution (PRODESI), which has established itself as an essential instrument for boosting national production, strengthening the economy and diversifying exports.

According to the Minister, the results obtained show significant progress in reducing external dependence, increase the productive sector and stimulating investment.

The official highlighted the growth of the main agricultural and food production sectors, with 6,301 projects approved by companies and cooperatives, an increase of 120.4% in relation to the scheduled credits.

The minister also highlighted the disbursement of credit concentrated in the industrial (50.6%) and agricultural (26%) sectors, the issuance of guarantees by the Credit Guarantee Fund (FGC) for 4,274 projects, totaling 486,808 million kwanzas and an accumulated growth of 173.9% in the volume of exports.

José de Lima Massano said that the country is producing 50 thousand tons of rice/year, and needs to reach 300 thousand tons, underscoring the importance of diversifying the economy, at a time when overcoming challenges in this area has marked the economic policy options over the years.

The minister pointed out that the exposure and dependence on external factors remains high, despite the growth seen in the non-oil sector, and that the country needs to get out of this situation of excessive dependence on external factors, due to the existence of an economic agenda aimed at internal solutions.

Massano said that between the beginning of 2015 and the end of 2017, the country experienced a deep financial, economic and monetary crisis, due to the decline in oil export revenues, which accounted for more than 90% of foreign exchange revenues and about half of current budget revenues.

The minister stressed that the government took measures to address the challenges arising from the COVID-19 shock, including the approval of a revised budget for 2020.

As a result of the measures, the minister said, oil revenues fell by around 40% compared to 2019, which implied a significant loss of tax revenues, also affected by the reduction in economic activity in the non-oil sector, resulting in a budget deficit of 2% of GDP.

“The context increased net financing needs, but the increase in interest rates on its Eurobonds limited Angola's access to international financial markets”, the minister said.

The minister stressed that the government has joined the Debt Service Suspension Initiative (DSSI) promoted by the G20 and has negotiated the suspension of debt service on official bilateral loans.

The extension of the debt moratorium provided by the DSSI beyond its initial duration (end of 2020) until mid-2021 provided Angola with additional short-term debt relief, with the International Monetary Fund (IMF) also approving an increase of 765 million US dollars to the program.

As a result, the minister explained, the country suffered a deep recession in 2020 as a result of the pandemic, with the oil sector, which accounted for around 30% of GDP in 2019, contracting by 6.7% in 2020, while the non-oil sector contracted by 5%, resulting in an overall GDP contraction of 5.6% in 2020.HM/VC/AMP