Angola's Monetary Tightrope: High Rates, Liquidity, and the Path to Economic Renaissance

The National Bank of Angola (BNA) has walked a tightrope in 2025, maintaining its benchmark interest rate at a sky-high 19.5% while deploying liquidity measures to stoke growth. This dual strategy—balancing inflation curbs with economic revival—is creating a unique investment landscape. For those willing to navigate the risks, sectors like agriculture, manufacturing, and infrastructure present compelling opportunities. Let’s dissect why Angola’s monetary policy is now a catalyst for recovery.

The High-Rate Gambit: Why Inflation Must Be Tamed

Angola’s inflation rate, though declining from a 28.41% peak in late 2024, remains stubbornly elevated at 27.5%. The BNA’s refusal to cut rates since July 2024 reflects its priority: anchor price stability before risking a relapse. By keeping rates at 19.5%, the central bank is targeting two critical threats:
1. Fuel Subsidy Rollback: As subsidies shrink, energy costs could spike anew.
2. Supply-Side Bottlenecks: Imported goods face logistical hurdles, from port inefficiencies to currency fragmentation.

The BNA’s liquidity measures—such as lowering the reserve requirement ratio for banks to 20%—are tactical counterweights. These steps ensure credit flows to businesses without igniting inflation.

Growth’s Silent Engine: Non-Oil GDP’s Silent Revolution

While oil remains Angola’s economic lifeline (contributing 3.61% growth in 2024), the real story is the non-oil sector’s 4.4% GDP expansion—outpacing hydrocarbons for the first time in a decade. This shift is no accident. The BNA’s liquidity tools are fueling:
- Agriculture: Investments in soy, cotton, and palm oil are reducing food imports.
- Manufacturing: Textiles and construction materials are benefiting from local-content laws.
- Infrastructure: The Lobito Corridor and Luanda’s metro expansion are creating jobs and reducing logistics costs.

Investors who target these sectors now—before inflation expectations stabilize—are poised to capture first-mover advantages.

Currency Stability: A Fragile but Improving Picture

The Angolan kwanza has been a rollercoaster since 2023, depreciating 60% amid debt servicing pressures and uneven forex sales. Yet the BNA’s interventions—such as aligning interbank rates with its policy rate—have slowed the slide. Key indicators suggest a turning point:
- Reserves: Gross international reserves hit $15.2 billion in 2024, covering 7 months of imports.
- Debt Management: BNA’s forward-looking cash strategies aim to tackle $25 billion in external maturities through 2029.
- IMF Backing: Staff forecasts predict inflation dropping to 17.5% by 2025, a key threshold for currency confidence.

While risks persist—political uncertainty, oil price swings—the kwanza’s trajectory is now less about freefall and more about stabilization.

The Investment Playbook: Act Now, Reap Later

The BNA’s high-rate stance is a double-edged sword: it deters speculative capital but rewards patient investors in tangible assets. Here’s how to capitalize:
1. Sector Focus: Prioritize non-oil industries like agriculture (e.g., AngolaAgro), construction materials (Cimangola), and tech-enabled logistics (TransAngola).
2. Currency Hedging: Use forward contracts to mitigate kwanza volatility, leveraging its improving fundamentals.
3. Long-Term Bonds: The BNA’s 2025 liquidity measures make Angolan sovereign bonds attractive for yield hunters (current yields hover near 15%).

The BNA’s May 2025 decision to hold rates—despite growth optimism—proves its resolve. This clarity is a green light for investors: Angola’s economy is transitioning from crisis mode to sustainable expansion.

Final Call: The Renaissance is Coming—Don’t Miss the First Chapter

Angola’s monetary policy is a masterclass in balancing act—high rates to crush inflation, liquidity to fuel growth, and reforms to stabilize the kwanza. While risks remain, the BNA’s disciplined approach has laid the groundwork for a recovery that could rival its oil-driven heyday.

Act now in sectors with structural tailwinds. The next phase of Angola’s economic story is being written—and the best seats are reserved for those who move swiftly.

Data Note: For real-time updates on Angola’s GDP, inflation, and kwanza performance, monitor the BNA’s monthly reports and IMF staff projections.