Top-Rated Debt Collection Agency in Angola

The economic risk in Angola

Economic risk in Angola is very high (6 out of 6). An economic risk of 6 out of 6 is relatively high in Africa.

GDP and economic growth are critical drivers for economic risk.
The GDP of Angola is 72,55 bn. USD (2021), growing by 0,7% per year.

In terms of the size of its economy, Angola ranks #69 out of 183 countries and has a medium-sized economy.

Having a view at the growth rate, it is ranked #159 out of 183 countries and is therefore considered a slow-growing economy.

GDP per capita is 2138 USD, ranking Angola number #133 out of 183 countries. This means the purchasing power of citizens in Angola is low compared to the rest of the world.

You can see a more detailed picture of GDP and economic growth in Angola in the table below:

Another critical driver for the economic risk score is the inflation rate and the interest rates. You can see a more detailed picture of monetary key performance indicators in Angola in the table below:

The interest rate for businesses is 19,4%.

The business environment risk in Angola

Our analysis shows that the business environment risk in Angola is high (5 out of 6), which is a pretty average risk score in Africa.

Economic freedom and rights has a big influence on the business environment risk in a country. You can see the critical facts for Angola in the table below:

In the above table, you can see, the property rights index is 30 in Angola, which is considered low in Africa.

The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 57 in Angola, a pretty average score for a country in Africa.

Angola's overall economic freedom index is 54 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.

The political risk in Angola

The political risk in Angola is high, with a score of 5/6. This is a pretty average political risk score in Africa.

The governance and political stability indicators are critical drivers for political risk. An overview of Angola can be seen in the table below:

The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.

When doing business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.

In Angola, the rule of law index is at -0,95 points, with the score going from -2.5 (weak) to 2.5 (strong). Angola has, therefore, a very low rule of law index, which means it is often close to impossible to enforce your contracts. We, therefore, recommend avoiding credits and recommend charging upfront payment instead.

Other drivers for the high political risks are the very weak control of corruption, the very weak political stability index, and the very large shadow economy that is 35,25% of Angola's GDP.

The commercial risk in Angola

In Angola, the commercial risk score is 3/4, which in our model is a medium score. This medium commercial risk score is relatively high compared to the average in Africa.

The commercial risk is relying on a country's international trade relationships. You can see some of the key facts for Angola in the table below:

Angola has a foreign exchange reserve of 14.47 bn. USD.

Angola has a positive trade balance of 22,82% of GDP. What this means is that Angola imports fewer goods and services than the country exports.

The annual growth of exports of goods and services has been growing -10,7% annually - now 37,87% of GDP. Import of goods and services represents 15,05% of the GDP in Angola.

The financing risk in Angola

We have calculated the financing risk to be 4/4, which equals a high risk. A high financing risk score is relatively high for countries in Africa.

The country's banking system, efficiency, and stability influence the financing risk. Additional facts and info can be found for Angola in the table below:

In Angola, the credit information sharing index is 0 on a scale from 0 (low) to 8 (high). The consequence of that number, is that the access and quality of credit information available in Angola is very low.

This makes it very difficult for you to understand the credit risk of your counterpart in Angola. Unless you have a strong relationship with your customers in Angola, we highly recommend charging payment upfront or using credit insurance.

Your legal rights as a creditor (and as a borrower) are 1 out of 12 and, therefore, very weak.

The high financing risk for creditors also impacts the high interest rate in the private sector of 19,4%.