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Executive Summary

Angola Faces Growing Threat from Natural Disasters and Climate Change

Angola is facing increasing risks from natural disasters and climate change, with droughts and floods posing serious threats to vital ecosystems. The country is highly exposed to these perils, which can have a prolonged negative impact on rural areas and cause direct damage and economic disruption in urban areas.

Climate change is expected to exacerbate the frequency and severity of weather-related disasters in Angola. Vulnerable households and small businesses are particularly at risk, as they may struggle to recover from climate shocks without adequate protection measures in place. The small and medium enterprise sector, which plays a crucial role in job creation, also needs financial protection solutions to enhance its resilience.

The cost of disaster response in Angola is primarily borne by the government, as emergency development assistance covers only a small portion of it. This leaves a significant burden on the public sector and creates a potential protection gap for the population and economy. The current approach to disaster risk financing relies heavily on budgetary mechanisms, with limited use of prearranged financing and risk transfer to the private sector.

While Angola has well-coordinated civil protection commissions at both national and local levels, public funding for disaster response is becoming increasingly constrained, especially at the local level. Budget volatility due to oil price shocks further limits the government’s ability to respond to disasters in a sustainable manner.

Furthermore, the country’s fiscal risk management frameworks do not explicitly address climate-related risks. There is a need for a fiscal risk model that considers climate risks to inform the budgeting process and ensure that climate risks are included in annual fiscal risk assessments.

As Angola grapples with the growing threat of natural disasters and climate change, it is crucial for the government to enhance its disaster risk financing mechanisms, strengthen the resilience of vulnerable populations and businesses, and incorporate climate risks into its fiscal planning. Failure to take proactive measures could undermine progress in poverty reduction and shared prosperity in the country.