Angola to drive economy with World Bank’s $300m, MSME-led

By Ben Eguzozie 

• With focus on Lobito corridor 
• Model puts Tinubu-led Nigeria on notice

A World Bank $300 million support to Angola under “accelerating economic diversification and job creation project” is set to accelerate economic diversification, private investment, and jobs by creating more favourable business conditions for micro, small and medium enterprises (MSMEs). 

Approved by the World Bank Group board of directors, the $300 million AEDJCP will benefit an estimated 12,000 firms, creating direct and indirect jobs as a result of project activities, and help Angola transition from an oil-driven and state-led development model to a private sector-led model that is also inclusive and climate resilient.

Although Angola’s economic growth accelerated last year to about 3.1 percent, thanks to higher oil revenues and improved economic management, approximately one-third of the country’ 34 million population live on less than $2.15 per day (2017 purchasing power parity), accounting for 11.7 million people in 2023. 

Furthermore, Angola’s economy does not create enough jobs for a young and increasing workforce, and informal employment is high. Women are at a disadvantage: compared to men, women have less paid employment (18% versus 31%) and earn half as much.

According to Juan Carlos Alvarez, World Bank country manager for Angola and Sao Tome and Principe, “This project will build on the government’s reform agenda and lay strong foundations for diversified growth that creates more and better paying jobs, particularly for women and youth”. 

Carlos Alvarez also said, it will help Angola’s ministry of economy and planning in its endeavour to enable sustainable and inclusive growth by facilitating investment and trade, improving access to productive infrastructure, and broadening access to finance and technologies, including digital and management capabilities.

The project also aims to increase private investment and climate-resilient growth of MSMEs in non-oil value chains, particularly in the Lobito corridor which has the potential to play a central role in Angola’s economic diversification and transformation. The corridor, served by the Benguela rail line, runs 1,344 kilometres from the Lobito Port to Luau on the border with the Democratic Republic of Congo (DRC); and crosses four provinces (Benguela, Huambo, Bie, and Moxico) which are home to eight million people or 25 percent of Angola’s population. These four provinces are important agriculture areas, with value chains in cereals (maize, soybeans, wheat, and rice), tubers, beans, vegetables, and fruits.

The Angolan government plans to partner with the private sector, develop linkages between economic agents along the corridor, and develop productive infrastructure to build value chains. The expansion of economic activity in the Lobito corridor offers an opportunity to develop quality logistics services that benefit agrobusinesses and help reduce post-harvest losses, improving food and nutrition security.

Model puts Tinubu-led Nigeria on notice 

The incoming Angolan model clearly puts on notice Nigeria, led by current president, Bola Ahmed Tinubu, whose administration must ambitiously rescue the West African country from a ruinous eight-year mismanagement by his predecessor, Muhammadu Buhari. 

Tinubu, some development economists told our newspaper, must come clean with policy thrust that accelerates economic diversification, private investment, and jobs, by creating more favourable business conditions for micro, small and medium enterprises (MSMEs). 

Indeed, one development economist told Business A.M. that Nigeria needs to pursue the Angola accelerated economic diversification and job creation (AEDJCP) model that can benefit several tens of thousands of private sector micro, small and medium enterprises (MSMEs), in order to create direct and indirect jobs from their activities, and help Nigeria transition from an oil-driven and state-led development to a private sector-led model that is also inclusive and climate resilient. 

He said by doing so, thousands of youths will be taken out of mounting unemployment. In Nigeria, about 53.40 percent of youths are unemployed, according to youth unemployment rates released by the National Bureau of Statistics (NBS) in 2022. Fifty-three percent or 80 million of 151 million Nigerian youths are unemployed, the NBS said.