Sitting under an umbrella in the heat of Angola's capital
Luanda, a vendor holds a makeshift currency exchange board on which is
scribbled "335 kwanzas: $1" — more than double the official rate of 155
kwanzas.
The drop in the price of crude oil to its
lowest level in more than a decade has not only pushed Angola's currency
to record lows, it has plunged the economy of Africa's second largest
crude producer into a crisis.
Despite the country's oil
and diamond resources, Angola suffers endemic poverty, with more than a
third of the population of around 24 million living below the poverty
line, according to the United Nations.
Fallout from the
oil price crunch is inflicting even more pain on the already struggling
poor, and risks threatening the stability of the country.
The
kwanza currency lost 35 per cent of its value against the dollar last
year and Angolans are rushing to turn their local savings into more
stable units, yet banks are low on foreign exchange.
The black market is their only hope for now.
"There is a strong demand for the dollar," said a young black marketeer on condition of anonymity.
The rate "can't continue to go up like this, otherwise it becomes dangerous, people are fed up", he said.
In
December, central bank governor Jose Pedro de Morais tried to calm
nerves, saying there was "no dollar crisis in the country".
"There
is a balance of payment deficit and there are fewer foreign resources,
but the 2016 national budget will try to address this temporary
difficulty," he said.
Shortly after his remarks, the bank devalued the currency by 15 per cent against the dollar.
The
devaluation did not come as a surprise "given the price of oil, the
pressure on the foreign exchange reserves and government revenue below
government's budget," said an internal note from a regional bank.
"A weaker currency is needed to slow imports demand and help exports."
PRICES UP FIVEFOLD
Tino
Mario Salomao is a businessman who imports mobile phone handsets and
other telecommunication products for retail sale in his shop in Luanda.
"We
have reached a stage where we cannot travel anymore. At the rate it is
going, we will soon run out of stock," said the 41-year old, who imports
from China, India and Dubai.
On January 19, Altantico bank and South African Standard Bank imposed limits on foreign purchases by Angolans.
"Prices of some goods have multiplied four or fivefold," said Salomao.
"A year ago you could still find a phone for $50 or 5,000 kwanza.
"Now the same phone costs between 15,000 and 17,000 kwanza — a price too high for the majority.
"Many large companies have pulled down their shutters. How can one even pay salaries for 10 or 20 workers?" said Salomao.
"For us who have three workers, we will survive... just for now."
At
Africampos food market, hawker Isabel Paiva, 36, says she is struggling
to sell her wares and to scrape together enough to feed her family of
four children.
Despite its mineral wealth, Angola has
one of the world's highest infant mortality rates at 167 deaths per
1,000 births, according to the latest UN report.
In 60
per cent of these cases, the deaths are caused by malnutrition, an
alarming statistic that may worsen in coming months given the stress on
Angola's economy.
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