Angolan National Assembly extends state of emergency

Following a parliamentary vote on Wednesday, Angolan President Joao Lourenco has extended the nationwide state of emergency that was originally planned to end today.

Angola’s economy will be seriously damaged by the extended lockdown as well as the global crude oil supply and demand shocks. Africa’s second-largest oil producer, Angola maintains an economy dominated by crude oil, which accounts for almost half of national GDP and 90% of gross exports. Many of these revenues are spent to service the country’s growing debt, which ballooned to 111% of GDP in 2019.

The government needs to sell oil at $55 per barrel to meet its budgetary obligations. However, after a dramatic freefall, global prices of crude are fluctuating around $20 per barrel. With US oil prices falling below zero and a sizeable global supply glut, expect Angola’s economy to contract by more than 4% this year.

Mounting debt payments will force Lourenco to prioritise paying creditors over spending on healthcare, meaning the president will quickly expend his political capital. Faced with a weakened economy, an angry nation and challenges to his power from within his own administration, Lourenco’s future as president is uncertain.

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