BMI View: Driven by an expansion in oil production and elevated prices, we forecast robust real GDP growth for Angola of 7.5% in 2011 and 15.2% in 2012, a sharp turnaround from the -0.4% growth recorded in 2009. A number of infrastructural investment projects will also have a positive effect on headline growth, but this remains marginalised by the country’s reliance on oil.

Angola is Sub-Saharan Africa’s second largest oil producer, and BMI’s Oil & Gas analysts forecast oil exports to increase to 2.23mn barrels a day (b/d) in 2012 from 1.88mn b/d in 2011, which has a considerable bearing on our forecasts for headline growth. The Angolan oil sector is set to undergo major restructuring over the next few years following the creation of the National Oil Agency, which will take on responsibilities now in the hands of Sonangol the stateowned giant. Refining, storage, transportation and distribution of petroleum products are currently held under a monopoly by Sonangol, but these activities are scheduled for liberalisation by 2012.

Furthermore, new projects are due to come online in the next two years. Exxon- Mobil ‘s project at Pazflor is due for completion in late 2011 with an estimated output of 220.000 b/d, and Chevron’s project at the Tombua Landana complex is due to ready in 2010 with output of 100.000 b/d, boding well for export revenues.

Moving onto investment, we forecast 12% growth in gross fixed capital formation in 2011 and 2012, contributing around 2 percentage points to headline growth forecasts. Much of this is owing to the government’s infrastructural development program aimed at continued rebuilding of infrastructure decimated during the civil war and at demonstrating an ability to provide key services. Estimates put the number of people without adequate housing in Luanda alone at 3-5mn. In response, and in a marked departure from a focus on high-end development that led to the eviction of hundreds of people from Luanda’s shanty towns, President José Eduardo dos Santos has pledged to build lmn new social homes in the capital over coming years.