Credit to the Private Sector
Angola’s credit-to-GDP ratio stands at 14.63%, among the lowest in sub-Saharan Africa and well below the continental average of approximately 45%. This metric underscores the structural underdevelopment of the banking sector’s intermediation function and represents both a constraint on private-sector growth and a significant opportunity for expansion.
Current Credit Landscape
| Indicator | Value |
|---|---|
| Credit-to-GDP Ratio | 14.63% |
| Number of Commercial Banks | 26 |
| BNA Policy Rate | 17.5% |
| Average Lending Rate | 19-25% |
| GDP (2024, IMF) | $115.2B |
| Inflation | 15.7% YoY (Dec 2025) |
Total credit to the private sector remains concentrated in short-term trade finance and working capital facilities, with limited long-term project financing or mortgage lending. The dominance of government securities in bank balance sheets – offering risk-free yields above 15% – has crowded out private lending for decades.
Growth Drivers
Several factors are creating conditions for credit expansion:
- Declining interest rates: The BNA’s three consecutive rate cuts from 20% to 17.5% are gradually reducing the cost of borrowing, though transmission to lending rates remains slow
- Disinflation trend: With inflation declining from above 30% at its mid-2024 peak to 15.7% in December 2025, real lending rates are becoming less prohibitive for borrowers
- Diversification push: Government policies under the PRODESI program (Program to Support Production, Export Diversification, and Import Substitution) are channeling credit toward agriculture, manufacturing, and fisheries
- Digital banking expansion: Mobile banking platforms are broadening the addressable market for credit products, particularly micro and small enterprise lending
Key Constraints
Despite improving macroeconomic conditions, several structural barriers limit credit growth:
- High NPL ratios: System-wide non-performing loans of 12-15% force banks to maintain elevated provisioning levels, reducing capacity for new lending
- Collateral requirements: Banks typically require collateral valued at 150-200% of loan amounts, excluding the majority of informal-sector businesses
- Concentration risk: The top five banks hold 65-70% of system assets, limiting competitive pressure to extend credit to underserved segments
- Dollarization legacy: Approximately 30% of deposits remain denominated in foreign currency, creating asset-liability mismatches that constrain kwanza-denominated lending
- Weak property rights: Land title registration inefficiencies make real estate collateral difficult to enforce, suppressing mortgage market development
Sectoral Allocation
Credit allocation remains skewed toward commerce and services, with limited penetration into productive sectors. The oil sector, despite generating 50-60% of fiscal revenue, sources most of its financing from international capital markets rather than domestic banks. Agriculture, which employs the majority of the labor force and represents 22.1% of GDP, receives less than 5% of total bank credit.
Outlook
The BNA’s easing cycle is expected to continue, with the EIU projecting further cuts to 16.0% by end-2026. Combined with the government’s fiscal consolidation and economic diversification agenda, credit growth should accelerate from its current low base. However, reaching even the sub-Saharan African average credit-to-GDP ratio of 45% would require a structural transformation of banking practices, collateral frameworks, and financial inclusion – a multi-decade undertaking. Near-term credit growth of 15-20% annually in nominal terms is achievable, though real credit growth will depend on the pace of disinflation.