Angola’s Q1’23 GDP slows to 0.3%

In the latest macro-economic focus, CNBC Africa delved into the economic landscapes of Mozambique and Angola with Fáusio Mussá, Chief Economist for Mozambique at Standard Bank. Starting off with Mozambique, Mussá highlighted the significant progress made in combatting inflation. From a peak of 12-13% last year, current inflation stands at 5.7%, reflecting a substantial decline. However, the improvement came at a cost, with high interest rates and cash-required reserves. Mussá expressed optimism about future rate cuts, with a forecasted 200 basis point reduction in May next year. On the growth front, he emphasized the importance of foreign direct investment (FDI) and noted a positive shift in the security situation, which has boosted investor confidence. The upcoming natural gas conference is expected to herald progress in FDI and economic development. Moving on to the Metecal, the currency and forex market in Mozambique are navigating supply-demand imbalances. While there is currently higher demand than supply, measures such as tight monetary policy and support to exports are expected to rebalance the market. Shifting focus to Angola, Mussá shed light on the country's GDP growth slowdown, attributing it to reduced foreign exchange supply. Despite an initially strong growth rate of 3% last year, Angola is forecasted to see a decrease to 1.8% in 2023. The privatization efforts in Angola, particularly in the stock market, have shown some progress, albeit hindered by global economic conditions. The government's plans to privatize key entities like Sonangol and telecom companies are still underway, with significant deals yet to be finalized. Notably, the Angolan stock exchange has shown promising signs, with the recent introduction of corporate bonds by Sonangol marking a step forward in the privatization agenda.