What Is Angolan Novo Kwanza (AON)?
The Angolan Novo Kwanza (AON) was the national currency of Angola between 1990 and 1995. It was replaced by the Kwanza reajustado (AOR) in 1995, due to severe and persistent inflation.
The AON was only distributed using paper banknotes, primarily by simply modifying or reprinting the denominations of already-issued currency.
- The Angolan Novo Kwanza (AON) was a currency used in Angola between 1990 and 1995.
- It is one of many currencies that the nation adopted and replaced due to chronic inflation.
- Angola’s economy is one of the weakest in the world and relies almost exclusively on raw commodity exports.
Understanding the Angolan Novo Kwanza (AON)
Located on the western coast of Southern Africa, Angola is a relatively populous country, with roughly 30 million inhabitants. It is however one of the world’s poorer countries, with per-capita gross domestic product (GDP) of just $2,790 U.S. dollars (USD) in 2019. Although Angola has a long history dating back thousands of years, its recent history has been significantly impacted by the Atlantic slave trade, in which large numbers of Angolans were forced into slavery. This slave trade began in the mid-15th century and lasted for roughly 400 years before being officially abolished in the mid-19th century.
Angola declared independence from Portugal in 1975, following a bitter period in which Angola fought a war of independence while also becoming engulfed in a civil war. While Angola created its first national currency as an independent nation in 1977, this currency—called the Angola Kwanza (AOK)—soon saw its value rapidly eroded by inflation. The AON, introduced in 1990, was an attempt to deal with this severe inflation, but it too was devalued only 5 years later.
This second devaluation occurred in 1995, when the AON was replaced by a new currency called the “kwanza reajustado”. The devaluation was carried out at a rate of 1,000 new currency units for every 1 AON, reflecting the level of severity of Angola’s inflation crisis at that time. A third devaluation occurred in 1999, replacing the kwanza reajustado with the so-called Second Kwanza (AOA), which is the currency that Angola continues to use today.
Real World Example of the Angolan Novo Kwanza (AON)
Unfortunately, the severe inflation that prompted the previous instances of currency devaluation in Angola has continued to be a severe problem in the country. Unemployment was 6.7% in 2020, down from 9.4% in 2010.
As with all nations, the strength of Angola’s currency is based in large part on the strength of its underlying economy. Currently, Angola’s economy is very heavily reliant on commodity exports, with crude oil and petroleum products comprising roughly 90% of total exports. Diamonds, meanwhile, comprise about 5% of the total, making Angola’s economy almost exclusively reliant on commodities. China is by far its largest customer, purchasing almost 60% of all Angola’s exports.