The services industry is booming worldwide. It is expected to reach $24,032 billion by 2029 and grow at an annual compound rate of 8.3% from 2025 to 2029. In Angola, the story is also positive as the country sees a boom in the services industry. The services industry is providing essential support to citizens while also boosting the economy. This article will cover the services market as well as the economic landscape of the country.
The services market in Angola
The market encompasses various sectors, including human services, hospitality, retail, and health services. In retail services, brands such as Ambo Market stand out, making it easy for consumers to find everyday goods in one place and have them delivered to their doorstep.
This can be seen from the e-commerce market stats in Angola. While the market is still considered a smaller market for e-commerce, it is expected to reach a revenue of US$152.5 million by 2025. This means it’s going to grow by 14.4% to reach a projected market volume of 261.0 million US$ in 2029. In this industry, electronics is the largest market, followed by hobby and leisure. Fashion furniture, and home come next with care products, DIY, and groceries taking the remaining percentage.
Hospitality services is another industry experiencing significant growth. This industry is driven by foreign investment and government initiatives. The country has seen a rise in tourism, and hospitality services are benefiting from this. In August 2022, the government announced that it is investing $20 million to construct a hospitality training institute to boost tourism in the country.
Also, the government has developed a new plan to help leverage tourism in the country. Since the pandemic, the hospitality industry has continued to grow, with many sectors maintaining business, even during the peak of the restrictions. New hotel chains are joining the fold in major cities in the country.
While there are still some challenges the industry faces, such as lack of training, infrastructure, and marketing, it is poised for continued growth.
In the healthcare sector, there is some growth compared to other service sectors, but there are significant challenges. For one, the country is finding it difficult to adapt its healthcare sector to meet the needs of the growing population. The healthcare system still has private and public providers and the quality of care is still considerably poor.
There are issues of understaffing and the lack of adequate resources. However, the government is making some efforts to improve this system with investment and infrastructure.
While the stats on other parts of the services industry are limited, they still contribute to the budding economy. For instance, services such as hairdressing and housekeeping are considered lucrative depending on where the service person is located.
Other vital services that are picking up in this sector include wellness services such as spas and massages along with food catering services.
The economy in Angola
Angola’s economy has been mainly reliant on oil since the Portuguese discovered it. It has accounted for more than 90% of exports by value and 64% of the government’s revenue in 2017.
Oil accounts for 28.9% of the country’s GDP. According to the African Development Bank, the country’s GDP grew by 0.9% in 2023. Unfortunately, this was lower than the 3.5% projected at the beginning of 2022. In the first part of 2023, the oil price dropped, and production was reduced, leading to higher external debt and amortizations.
This also led to a whopping 60% currency devaluation. However, the Angolan economy during this period had some positive aspects. For one, the ratio of debt service to total income declined, falling from 297% to 100%. Inflation also dropped to 13% from 21.7%.
The economy in Angola has undergone a slight recovery since the coronavirus pandemic. However, the GDP growth is still anchored by international oil prices.
The country’s unemployment rate fell to 30.8% in the third quarter of 2024. The year before, this rate was 14%, slightly declining by 0.07% in 2022. This rate increased within the younger demographic from 15 to 24 years old and is currently 56.6%. Such stats have led to the growth of the services industry in the country. Many youths are looking into providing services with the little skills they have.
While there were declining imports, the international reserves did not change much. The economy is still largely reliant on oil, but will that change in the future?
What to expect in the future?
The stats for the Angola economy in 2025 show that there will be some decline in the short term. The economic outlook expects inflation to reach 18.1% and then drop to 12.4% because of the currency devaluation. The government is already taking measures to manage this outlook by tightening fiscal policy.
It has done this by implementing measures to improve and rationalize public expenditures. The Angolan government has limited the purchase of non-essential goods and services. It also adopted subsidy reforms, suspended selected nonessential capital expenditures and embarked on a privatization program.
These policies were hard on the citizens, so the government implemented some relief measures to cushion the effects. These measures include exemptions for value-added tax, VAT credit for imported capital goods, and customs duties on goods imported under humanitarian aid. Also, the government enabled citizens to pay Social Security contributions at a later date to ease the pressure.
Another noticeable measure the government is taking to improve the future economy of the country is the adaptive social protection scheme. This mechanism was designed to mitigate the impact of future shock on the economy. Under this protocol, millions of families are registered to receive direct money transfers to ease their suffering. The government has also taken some measures to reduce the impact of economic downturns, natural disasters, and health crises, such as the COVID pandemic.
How these policies impact the economy of the country in the next few years still remains to be seen.
