Foreign investment in Angola fell by 69.7 billion dollars in the first half of 2023 due, essentially, to the loan item, which has flows of less 4.5 billion and appreciation of 2.7 billion, presenting a very close to 2 billion
According to the report from the Economic Research Center of the Lusíada University of Angola (CINVESTEC) for the first half of 2023, this decrease in Foreign Direct Investment (FDI) represents 3% as it went from 71.7 to 69.7 billion dollars, that is a reduction of 2 billion dollars.
The document points out that the significant reduction in negative FDI flows from 6,599 million to 552 million (-92%) due to the reduction in foreign oil investment outflows from around 7 million to 4,633 million (-32%) and the increase in investment oil from 3,336 to 3,963 million, which is already a relatively positive number (+19%). However, according to the report, semi-annual non-oil FDI was only US$117.5 million, which for CINVESTEC economists makes it urgent to significantly change the business environment to capture both external and internal savings.
The conversion ratio of deposits into loans for credit granted by banks is around 50%, showing an evolution in levels, remaining, until the third quarter of 2022, at the level of 60%, falling to 55%, in fourth quarter of 2022 and the first quarter of 2023, and again to 50%, in the second quarter, a trend that seems to be consolidated taking into account the month of July. Experts emphasize that total credit rose for two reasons, the first being due to the exchange rate effect, and the second due to the exponential increase in bank credit to the State in June, due to the treasury crisis in public accounts.
From the first quarter of 2022 to the second quarter of 2023, real credit for production totaled around 456 billion kwanzas, while credit to families was around 429 billion kwanzas. “This is very low credit growth over a period of six quarters”, highlighted the experts.
Expense by function
Expenditure on education reduced by 13%, and in the opinion of CINVESTEC economists, this expenditure should increase by 29%, going from 10.5 to 14.5% of total expenditure. Expenditure on the health sector also decreased by 12%, they also highlighted that it should grow by 38% in order to reach at least 13.0% of total expenditure.
The experts clarified that they place their recommendations for spending on education and health below international commitments, as the biggest problem is that high levels of poverty prevent many families from spending any money on books, notebooks, pencils or medicines, allocating all family budget for poor nutrition. The inclusion of these people in education and health, they continued, requires, first, that the most basic aspects of the social problem be solved and then, replacing direct social support with education and health.
BY: Francisca Parente
