Non-financial expenses increased by 500 billion kwanzas in the first half of 2024, reaching 6.5 billion kwanzas, an increase of 8.7 per cent compared to the 6.0 billion recorded in the same period of 2023.
Despite the increase, data from the economic report by the Centre for Studies and Scientific Research of the Lusíadas University of Angola (CINVESTEC) highlights the challenges of fiscal sustainability, with expenditure representing 219% of non-oil revenue, up from 211% in 2023.
Expenditure on employee remuneration fell by 11.2 per cent in inflation-adjusted figures, reducing its share of total expenditure from 27.7 per cent to 22.6 per cent.
This scenario reflects the continuing loss of workers’ purchasing power. On the other hand, spending on debt interest rose by 25.2% to 1.7 trillion kwanzas, making it the largest share of current expenditure.
The document points out that this increase was driven by the devaluation of the kwanza and represented 63 per cent of non-oil revenue, compared to 47 per cent in 2023.
Increase in investments
Investments grew by 25.3 per cent, reaching 1.7 trillion kwanzas and increasing their share of total expenditure from 23.3 per cent to 26.8 per cent. Meanwhile, spending on goods fell by 22 per cent, while services increased by 28.9 per cent, highlighting a structural difference in the General State Budget (GSB).
The social and public security sectors suffered a slight reduction of 1.3 per cent, totalling 2.5 trillion kwanzas and accounting for 38.7 per cent of total spending, down from 42.6 per cent a year earlier.
Health saw an increase of 11.4 per cent, while education saw a reduction of 9.7 per cent. Agriculture stood out with a 200.8 per cent increase in cats, although the impact on GDP remains insignificant. On the other hand, spending on general public services and general economic affairs fell by 19.8%, in line with fiscal rationalisation efforts.
Oil compensates for fall in other sectors
Oil revenues grew by 18 per cent in the first half of the year, accounting for 63.3 per cent of total revenues, compared to 57.4 per cent in the same period in 2023. In contrast, non-oil revenues fell by 7.7 per cent, reducing their share from 42.6 per cent to 36.7 per cent, reinforcing dependence on the oil sector.
The budget balance was positive, totalling 638 billion kwanzas, but with a real reduction of 7.2% compared to 2023.
The primary balance grew by 14.2 per cent to 2.3 trillion kwanzas. However, the non-oil fiscal balance remained negative, with a deficit of 3.9 trillion kwanzas, 23.5 per cent worse than in the same period in 2023.
The figures point to progress in some areas, such as investment and agriculture, but they also point to structural imbalances and a growing dependence on the oil sector, highlighting the urgent need for more balanced and diversified management, the document emphasises.
Source: O País
