While Angola’s oil-fueled economy is one of the least diverse in the world, the country also lags behind in several macroeconomic and welfare indicators. This disappointing outcome largely follows from the Dutch disease, a mechanism that describes causal linkages from natural resource abundance to the lack of economic diversity through the loss of international competitiveness in the nonresource sectors. In this section, we apply an autoregressive distributed lag (ARDL) model to identify the cointegration between the international oil prices and the real effective exchange rate of the Angolan kwanza as a severe symptom of this phenomenon. While our results show that the Dutch disease does emerge through the spending effect, we also argue that this mechanism considerably impedes economic diversification.