Lagos, Nigeria – Angola’s inflation rate continues to decline, marking a significant turning point for the national economy. The seven consecutive months of falling inflation are not just statistical figures but clear evidence of economic recovery and strengthening fiscal policies.
AfricaHeadline Reports Team
editorial@africaheadline.com
In February 2025, inflation dropped to 25.26%, the lowest level in 11 months. This sustained decline reflects the impact of more effective economic policies, tighter monetary control, and increased domestic production.
What Is Driving This Positive Trend?
Responsible Monetary Policy
The National Bank of Angola (BNA) has adopted stringent measures to curb inflation, reducing monetary base growth by 35% over the past 12 months, effectively controlling price pressures.
The Permanent Liquidity Facility interest rate has been adjusted to 17.5%, curbing excess liquidity and maintaining monetary discipline.
The mandatory reserve ratio for local currency was raised to 22%, limiting speculative circulation and stabilizing money supply.
The kwanza has remained relatively stable, with only a 4.8% depreciation over the past six months, a stark improvement compared to the 18.5% depreciation recorded in the same period last year.
The BNA aims to bring inflation below 15% by the end of 2025, with a long-term goal of achieving single-digit inflation by 2026.
Strengthening Domestic Production
The shift from import dependency to local production has played a key role in economic recovery. The National Plan for Promoting Domestic Production has successfully reduced reliance on foreign goods and boosted industrialization.
The agriculture sector grew by 7.3% over the past year, with notable increases in maize production (10%), cassava (8%), and rice (12%).
Industrial output saw a 5.1% growth, particularly in agro-processing and metalworking industries.
Essential goods imports dropped by 18.2% in 2024, significantly saving foreign reserves and improving trade balance stability.
By 2027, the government aims to ensure that at least 60% of locally consumed products originate from Angola, reducing exposure to external market fluctuations.
Strengthening the Kwanza and Exchange Rate Stability
Exchange rate stability has been a key factor in containing inflation. The kwanza has remained relatively stable over the past six months, avoiding the extreme volatility that previously contributed to rising prices.
The dollar-to-kwanza exchange rate has hovered around 850 AKZ/USD, a significant improvement compared to the 1,200 AKZ/USD peak during the 2023 currency crisis.
The BNA has reinforced foreign reserves, which increased by 9.6% in 2024, reaching $15.4 billion, strengthening the central bank’s ability to intervene in the forex market when needed.
Imported inflation dropped by 12%, helping to reduce the impact of external price shocks on the cost of living.
The government’s goal is to maintain the kwanza within a stable range of 800–900 AKZ/USD throughout 2025, ensuring a predictable macroeconomic environment for businesses and investors.
Infrastructure Investment and Economic Diversification
Angola has intensified its investments in infrastructure and economic diversification, crucial for sustainable growth and reducing dependency on oil.
Investment in roads, railways, and energy infrastructure grew by 28% in 2024, facilitating agricultural and industrial supply chain efficiency.
The Lobito Corridor has significantly boosted exports, increasing the transport volume of goods and minerals by 35% compared to 2023.
The energy sector expanded by 22%, with new hydropower and solar energy projects improving electricity access and reducing production costs.
By 2026, the government aims to increase the non-oil sector’s contribution to GDP to 50%, enhancing Angola’s economic resilience against global oil price fluctuations.
Outlook for the Future
Although inflation remains above the single-digit target, the current economic indicators suggest that the worst is overand that Angola is on a sustainable path toward recovery. The country continues to strengthen key sectors, ensuring that inflation continues its downward trajectory in the coming months.
If this trend holds, Angola could end 2025 with inflation below 15%, creating a more favorable environment for investment and improving citizens’ purchasing power. Confidence in the Angolan economy is growing, positioning the country as one of Africa’s most promising emerging markets.
