Standard Bank’s chief economist for Angola has warned that the country faces elevated fiscal slippage risks in the run-up to its 2027 general elections, urging the government to maintain tight expenditure controls while navigating heightened oil price volatility.
Fáusio Mussá, Standard Bank’s chief economist for Angola, Mozambique and the Democratic Republic of Congo, delivered the warning while speaking to journalists at the close of the bank’s first Economic Briefing of 2026, held under the theme ‘Angola: Macroeconomic Stabilisation in an Environment of High Oil Price Volatility’, at which he was the keynote speaker.
Mussá noted that the global economy is passing through a period of turbulence driven by the conflict in the Middle East, but expressed expectations of peace in the region and a normalisation of oil prices, which have been weighing negatively on several value chains, including those for fertilisers and other industrial inputs.
Angola must press ahead with reforms to attract both domestic and foreign investment and to improve the business environment, Mussá said, describing existing results as encouraging. Data point to consistent growth underpinned by the non-oil sector, driven by investment in energy, agriculture and import-substitution projects across multiple industries.
The macroeconomic analyst highlighted that Angola has benefited from elevated oil prices, which have created a more favourable economic environment. However, he cautioned that the fuel subsidy regime continues to erode the fiscal gains the country would otherwise derive from the current commodity cycle.
‘There has been a notably prudent fiscal policy and, above all, strong coordination between fiscal and monetary policy to ensure a degree of macroeconomic stability,’ said Mussá, also emphasising the Angolan government’s decision not to revise the budgetary assumptions underpinning the State Budget, arguing that ‘uncertainty and volatility remain very high.’
Angola is scheduled to hold its sixth general elections in 2027, and Mussá stressed that pre-election years historically heighten the risk of fiscal slippage, making closer monitoring of public expenditure essential.
‘As elections approach, there may be an impulse to conclude various projects that have been under development for years but whose pace of execution, for one reason or another, did not allow for completion,’ he explained.
From a public finance standpoint, Angola must be able to continue building fiscal buffers and generating savings that allow it to manage the impact of oil price swings, Mussá said. ‘Expenditure needs to be concentrated on priority projects, and the impact of that spending on public debt and the fiscal balance must be smoothed out so that there are no spikes of fiscal pressure,’ he added.
‘This has been a rather interesting year. Angola recently tapped international debt markets, issuing four billion dollars in Eurobonds, but part of that proceeds is being used to smooth the repayment of future debt operations,’ Mussá noted, adding that this strategy ‘can help Angola ease debt service pressure, particularly in 2028 and 2029.’
On inflation, Mussá said the forecast for Angola by year-end stands at 8.6%, pointing to two factors shaping the trajectory of price pressures in the country. The first is exchange rate stability maintained since 2024, which has allowed economic agents to better manage their import margins, resulting in ‘more contained price increases.’
‘The second factor is that the government has continued to maintain fuel subsidies. In Mozambique, by contrast, the diesel price rose by 45%, with a significant knock-on effect on inflation. In Angola, the diesel price increase was just 5%. This supports the outlook for Angola achieving single-digit inflation — which would be the first time in the country’s history,’ Mussá said.
The Standard Bank Group operates in 38 countries, of which 18 are on the African continent, making it the largest private-sector bank operating in Africa.
Source: Notícias ao Minuto
