AfDB Approves $162.76 Million Loan to Boost Angola’s Economic Diversification and Climate-Resilient Agriculture

The initiative also addresses climate vulnerabilities, which have increasingly threatened agricultural productivity and the livelihoods of Angola’s most vulnerable populations.

The African Development Bank Group (AfDB) has approved a $162.76 million loan to Angola to fund the first phase of the Economic Governance and Resilience Support Programme. This initiative aims to accelerate Angola’s economic diversification by enhancing fiscal governance, reducing dependence on oil revenues, and fostering private sector-led growth in key sectors like agriculture, manufacturing, and trade.

While Angola has made strides toward macroeconomic stability since 2017, challenges persist, including declining oil export revenues, high public debt, and a need for more robust economic diversification. The programme will focus on advancing reforms in agriculture, a sector critical to livelihoods, food security, and job creation.

The initiative also addresses climate vulnerabilities, which have increasingly threatened agricultural productivity and the livelihoods of Angola’s most vulnerable populations.

Focus on Inclusive Growth

The programme emphasizes creating economic opportunities for marginalized groups, including women, youth, persons with disabilities, and low-income households. By enhancing the resilience of the agricultural sector to climate change, it seeks to reduce inequality and promote sustainable development.

“This programme is central to our strategy in Angola, focusing on generating inclusive growth and decent jobs through agricultural transformation and sustainable infrastructure,” said Pietro Toigo, the AfDB’s Country Manager for Angola. “It sets the stage for private sector-led economic diversification, particularly in agriculture and trade, which are vital for sustainable job creation and income generation.”

Strengthening Governance and Fiscal Space

The programme will help Angola create greater fiscal space by reducing borrowing costs and strengthening the implementation of development projects. It also supports reforms aimed at improving public financial management, creating a more conducive environment for private investment, and enhancing the effectiveness of government spending on development priorities.

Enhancing AfDB’s Ongoing Efforts

As of June 2024, AfDB’s portfolio in Angola includes 14 active projects worth $1.2 billion. The new programme complements these existing initiatives, particularly in agriculture, infrastructure, and energy. The reforms under the new programme are expected to amplify the impact of ongoing projects by improving their financial sustainability and implementation efficiency.

“This loan builds on our commitment to support Angola’s economic resilience and diversification goals,” Toigo added. “By addressing systemic challenges, such as fiscal governance and climate risks, the programme lays a strong foundation for Angola’s long-term sustainable development.”

Broader ImpactsThe programme aligns with Angola’s national priorities, including its long-term development agenda, and AfDB’s overarching goal of promoting inclusive and sustainable growth across Africa. It also underscores the importance of climate resilience in achieving food security and supporting the livelihoods of Angola’s rural communities.

The first phase of this ambitious initiative is expected to pave the way for a more diversified and resilient Angolan economy, benefiting millions while reducing the country’s vulnerability to external shocks like oil price fluctuations and climate change.