The drop in FDI in the oil sector comes at a time when Angola recorded production below one million barrels per day. Even so, it is the first time since 2016 that the balance between inflows and outflows of foreign direct investment was not negative in a first half of the year. But without investment, the decline in national production cannot be halted.
Foreign Direct Investment (FDI) in the country fell 10% to USD 4.246 billion in the first half of this year compared to USD 4.714 billion in the same period of 2024 — meaning Angola attracted USD 467 million less in the first six months of the year versus the same period last year, according to calculations by Expansão based on statistics from the National Bank of Angola (BNA).
This is the lowest FDI in the past five semesters. One would have to go back to the second half of 2022 (an election period, which usually discourages investors) to find a lower record.
At the root of this decline is the 14% plunge in oil-sector FDI to USD 3.908 billion in the first six months of the year. In practice, oil companies and foreign firms operating in the sector invested USD 627 million less than in the same period last year.
This fall mirrors the sector’s performance in recent years, as the country faces a continued decline in oil production. To put it in perspective, Angola produced about 186 million barrels in the first half of the year — an average of 1.028 million barrels per day — a 9% drop compared to the 1.123 million daily average in the same period last year, or 96,000 fewer barrels per day, according to Expansão’s calculations based on monthly reports from the National Oil, Gas and Biofuels Agency (ANPG). This dragged down the GDP of the oil extraction and refining sector, which, according to the National Statistics Institute (INE), contracted 6.5% year-on-year.
The outlook worsened further in July, when Angola’s daily average production fell to around 999,000 barrels — dropping below the symbolic one-million-barrel mark for the first time in 28 months.
Oil and gas expert Flávio Inocêncio pointed to multiple reasons behind the fall in FDI, noting that international market uncertainty and oversupply pushed oil prices down sharply, given that OPEC+ and the U.S. are producing around 13 million barrels per day.
“It’s important to note that oil-sector FDI was negative last year, meaning more money left than entered, reflecting a period of uncertainty. But that doesn’t mean Angola isn’t attractive from a geological standpoint — recent non-associated natural gas discoveries prove otherwise,” he explained.
According to Inocêncio, Angola’s oil production has been in decline for some time due to proven reserves of around 8 billion barrels and a low reserves-to-production ratio, though forecasts were once more pessimistic. “Rystad Energy projected a steeper decline, predicting Angola could fall to 650,000 barrels by 2032,” he noted.
“The reason is simple: mature well decline and insufficient exploration in past years dictate the sector’s current performance. Reforms — especially on incremental production and new bidding rounds — have partially mitigated the issue, so the decline isn’t as steep. But we shouldn’t be surprised production is dropping. There have been no significant new discoveries to offset natural decline,” he concluded.
The fact that oil has consistently represented 90% of foreign investment in Angola highlights that the sector remains the backbone of the national economy and the one most trusted by investors. Meanwhile, the non-oil sector accounted for just 8% of all FDI between January and June this year, though it grew 34% to USD 338 million (+USD 160 million).
Outbound Angolan Investment Surges
While foreign investors put less money into Angola in the first half, Angolans increased their investments abroad.
They invested an additional USD 63.6 million between January and June, marking a 405% surge to USD 79.3 million year-on-year. Still, outbound Angolan investment represents only 1.9% of what foreign investors put into the country.
Source: Expansão
