Angola STRUCTURE OF THE ECONOMY
Figure 6. Gross Domestic Product (GDP) by Sector, 1985
Source: Based on information from Tony Hodges, Angola to the
1990s, London, 1987, 43.
Since independence, the economy has been dominated by
the oil
export industry and drained by the need to carry on the
war against
the UNITA insurgents. Because of the collapse of the
cash-crop
economy, particularly the cultivation of coffee by
large-scale
plantations, in 1988 the economy depended totally on the
oil sector
to generate funds. As a result of increased oil
production, GDP had
risen steadily from Kz109.4 billion (for value of the
kwanza--see Glossary) in 1982 to Kz144.9 billion in 1985.
Unfortunately, however, as the war against UNITA
continued,
most revenue from oil sales was quickly spent on the
nation's
defense forces. The relationship between oil profits and
defense
requirements became most acute in 1986 when the price of
oil
dropped, reducing government revenues and resulting in a
jump in
the percentage of government spending on defense.
At the same time, the war has also wreaked havoc in the
already
suffering agricultural sector, forcing the government to
use
precious foreign exchange to import food. Once a food
exporter,
Angola by the late 1980s was importing half of its grain
requirements to compensate for reduced production in the
war-torn
rural areas.
Although the war has caused much rural-to-urban
migration,
industries based in the cities have been unable to harness
this
potential work force. Most of the Angolans coming into the
cities
have little education or training, partly because
education in the
rural areas has been disrupted by the war. Furthermore,
the
industries in the cities have been hurt by the lack of raw
materials, including grain, timber, sugarcane, and cotton,
normally
produced in the rural areas. Consequently, industries have
come to
depend on high-priced imported materials. The frequent
unavailability of industrial inputs, particularly during
1986 when
the government severely restricted imports to protect
foreign
exchange reserves, has led to underproduction and underuse
in the
manufacturing sector
(see Industry
, this ch.).
As a result of the general dislocation in the economy,
particularly in the transportation and distribution
systems, many
goods were unavailable in the 1980s. Thus, the black
market (also
called the parallel market, or kadonga) had come to
dominate
trade and undermine government efforts to impose order on
domestic
production. Consequently, the value of the kwanza also
dropped,
making it increasingly difficult for the government to
attract wage
earners to either agricultural or manufacturing
enterprises.
Furthermore, pilfering and graft in most economic
enterprises had
become common, as workers recognized that goods used in
barter were
more valuable than wages paid in kwanzas. As a result,
inflation
was high, goods were scarce, worker absenteeism was
widespread, and
productivity was low.
Data as of February 1989
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