Angolas Foreign Currency Reserves Gains from High Crude Oil Prices

Angola is the second largest oil producer in Africa. The country’s reserves of foreign currency reached a total of $25.02 billion by December of last year. According to a document presented by the central bank of Angola, the 44 percent increase in its reserves is highly attributed to the rise in crude oil prices.

Based on the initial report received by Bloomberg News from Banco Nacional de Angola, the country’s Luanda-based bank, the reserves rose from the $17.33 billion it attained at the close of 2010. By December of 2011, the total increase of $25.02 billion was a huge leap from the $23.27 billion total reserves it achieved prior to that month.

In a telephone interview, Stephen Bailey-Smith, research head covering Africa for the Standard Bank Plc of London, said that Angola seems to be in an extremely good position to consistently maintain its growth in the future.

Bailey-Smith further added that Angola must continue to gain from exports and rising oil prices. Both of these comprise over 90 percent of Angola’s earnings from foreign currency.

Moreover, Bailey-Smith shared that oil production is expected to rise in 2012. From an average production of 1.69 million barrels a day in the past year, Angola is hoping to increase the amount of oil it produces to 1.84 million barrels each day. Moreover, the country may post and achieve a surplus in its budget for 2012. The anticipated excess they will gain in their budget is about 9 percent of the gross domestic product (GDP) of Angola.