Angola's total bank credit stock grew by just 1% in the first half of this year, edging up from 8,903 billion kwanzas at end-December to 8,987 billion kwanzas by end-June — an increase of 84.3 billion kwanzas — according to calculations by Expansão based on data from the National Bank of Angola (BNA). Lending to households and the retail trade sector accounted for the largest share of that expansion.
The picture looks considerably brighter on a year-on-year basis, however. Compared with the same period in 2024, the credit stock rose 12%, reflecting the cumulative impact of successive monetary policy easing measures.
That year-on-year improvement is largely attributable to the decline in interest rates that has taken hold since 2025, as the BNA eased monetary policy in response to slowing inflation, which currently stands at around 10.1%. The central bank has executed what is, by historical standards, its most aggressive consecutive monetary easing cycle on record — five successive cuts to the benchmark policy rate beginning in November 2025, bringing it down to pre-pandemic levels.
The reduction in the benchmark rate fed through to the Luibor, Angola's interbank reference rate, lowering the cost of borrowing for households and businesses alike. Complementing this environment has been a period of relative stability in the kwanza's exchange rate against the US dollar. Although the BNA continues to maintain that the exchange rate is determined by market forces, in practice the central bank has acted to prevent a renewed depreciation of the kwanza, despite the persistence of a backlog in the foreign exchange market.
Under a fully flexible exchange rate regime, such an imbalance would typically translate into a depreciation of the domestic currency. Despite the credit stock in kwanza terms reaching all-time highs, the picture is markedly different when expressed in dollars. The levels seen between 2013 and 2014 — when the total credit stock exceeded US$30 billion — remain a distant memory. The stock currently stands at approximately US$9.9 billion, roughly one-third of the peak of US$32.6 billion recorded in 2014.
Credit therefore remains well below the levels needed to adequately serve the economy's financing requirements. Banks continue to display a clear preference for lending to the government rather than extending credit to the private sector, a dynamic widely described as crowding out.
The reason is straightforward: sovereign exposure carries minimal risk, allowing banks to sustain high levels of profitability without assuming the credit risk inherent in corporate lending — a risk further amplified by Angola's often challenging business environment. In other words, banks generate sufficient returns on their capital through holdings of public debt, while the perceived risk of financing private-sector activity remains prohibitively high for most projects. With interest rates now on a downward trajectory, however, this equilibrium is expected to shift gradually in favour of private credit.
Through to the end of June, lending to individuals — predominantly consumer credit — was the segment that contributed most to overall credit growth. According to bank balance sheets, this category led the expansion in the first half of the year.
The retail trade sector was also among the main drivers of credit growth during the period, alongside personal lending, confirming a pattern in which consumption-related financing continues to dominate Angola's credit market rather than productive investment in industry or infrastructure.
Source: Expansão / Original article: http://expansao.co.ao/economia/detalhe/stock-de-credito-so-cresceu-1-no-primeiro-semestre-para-8987-mil-milhoes-kz-73657.html
