Angola is a lower middle-income country located in southern Africa with a USD 114 .5 billion gross domestic product (GDP), a 29.1 million population and a per capita income of USD 3,924 according to 2018 International Monetary Fund (IMF) estimates. The third largest economy in sub-Saharan Africa, Angola is a member of the Organization of the Petroleum Exporting Countries (OPEC) and produces an average of 1.373 million barrels per day, the second highest volume in the sub-Saharan region behind Nigeria. Angola also holds significant proven gas reserves as well as extensive mineral resources. Oil still accounts for 90 percent of exports and 37 percent of GDP. The Government of Angola (GRA)’s commitment to improve oil sector transparency led to the creation of the National Oil and Gas Agency (ANPG), an independent regulator to manage oil and gas concessions, which also ensures that the state-owned oil monopoly Sonangol will relinquish substantial control in the sector and on its core upstream business. In addition to reforms in the oil sector, the administration of President Joao Lourenco has implemented numerous other structural reforms to improve macroeconomic stability and the climate for economic growth. In early 2018, the government scrapped the Angolan currency’s fixed peg to the U.S. dollar over concerns of dwindling foreign exchange reserves, and to institute a more transparent market-based foreign exchange regime. A new private investment law and an antitrust law in 2018 have been key administration initiatives to encourage private-sector competitiveness and growth.
Although the more than 47 percent devaluation of the local currency throughout 2018 has improved exchange rate flexibility, it has also increased public debt, now close to 85 percent of GDP. To anchor rising inflation against the impact of the exchange rate devaluation, the Central Bank of Angola (BNA) adopted a restrictive monetary policy and implemented various other financial sector policies. The BNA also increased the minimum share and start-up requirements for commercial banks, and closed several non-complaint commercial banks.
In early December 2018, the Lourenco administration rolled-out an ambitious five-year strategy to tackle corruption, money laundering, and other economic and financial crimes. The strategy focuses on three main pillars – prevention, prosecution, and institutional capacity building, and includes short and long-term initiatives for a-whole-of society approach to help reduce the impact of corruption. These strong anti-corruption initiatives led to the detention of several high-level public and private figures, and the president dismantled most of the influence of his predecessor’s family over key sectors of the economy.
The business environment remains challenging, spurred by a tedious bureaucracy with limited bottom-up leadership. Angola ranked 173 out of 190 in the 2019 World Bank’s Doing Business ranking. Inadequate supply chain infrastructure, slow and inefficient institutions, and corruption continue to constrain the private sector’s contribution to growth. A lack of institutional, human, and material capacity also risks drastically undercutting the government’s anti-corruption intentions. Rolling back dependency on oil will require significant investment in other economic sectors to stimulate growth. Opportunities lie in the precious minerals, tourism, agriculture, fisheries, and hydropower sectors.
Continued infrastructure development opportunities are most obvious in the areas of public transportation, tourism, port rehabilitation, energy and power, telecommunications, mining, natural gas, and in creating national oil refining capacity.
Key sectors that have attracted significant regional and international investment in the country include energy, construction, and oil and gas. Non-oil economic sectors such as agriculture, energy, fisheries, and extractives will open up new areas to foreign and national investment. As the country continues to seek to diversify its economy, an emerging sector is agriculture, in which the country lacks technical knowhow and the necessary startup capital resources to develop. Agriculture represents only 11 percent of GDP. Angola has decided to open up its telecoms market in a bid to attract foreign capital.
Key Issues to watch:
- Angola continues to suffer from a relatively poor investment climate due in large part to the lack of openness to competition in the private sector and the dominance of the state on state-owned enterprises and in the economy. However, the new government of President Lourenco has prioritized the privatization of 74 state-owned enterprises by 2020.
- Angola benefits from a relatively stable and predictable political environment, especially when compared to its neighbors in the region. A peaceful transition following presidential elections in 2017, resulting in new leadership after 38 years of Jose Eduardo dos Santos rule, has raised local and international expectations for change.
- Angola will hold its first municipal elections in 2020, which may lead to some decentralization of decision-making authority, disbursement, and management of public resources.
- There is an abundant supply of unskilled labor, particularly in the capital, Luanda. Skilled professionals are available, but often require additional training.
- Portuguese is commonly spoken, while English competency levels are relatively low.
- The new private investment law of 2018 provides greater tax incentives to companies investing in the domestic economy, and does away with the local partnership requirements for foreign investment and ends minimum levels for investment.
- Real estate and living expenses remain expensive, but have recently moderated due to the ongoing economic crisis, and the local currency weakening against the U.S. dollar. In 2018, Luanda ranked sixth as the most expensive city for expatriates globally, down from first in 2017.
- Infrastructure is limited, roads are often in poor condition, power outages are common, and water availability can be unreliable.
- The investment climate remains hampered by rampant corruption, and a complex, opaque regulatory environment, as reflected by rankings from globally recognized entities outlined in Table 1.
- Despite the slight upswing in global oil prices in 2018, the oil crisis continues to affect the Angolan economy, creating drastic losses in export revenue and a severe limitation in foreign exchange, forcing substantial cuts in government spending.
Angola’s high external imbalances and forex shortages have hurt private sector growth, and rapidly declining foreign currency reserves. However, the government approved a law on February 23, 2018 that provided amnesty to any citizen repatriating more than USD100, 000 from overseas accounts until year-end, which the government hopes will help increase its access to forex.
Repatriation of capital, dividends, and transfers of remittances abroad remain challenging.
Portfolio investment in Angola is embryonic.
Although only 23 percent of Angola’s entrepreneurs are women, Angola boasts one of the highest growth rates of female entrepreneurs in Africa. However, the government has not instituted any significant reforms to increase the percentage of female entrepreneurs and limited access to credit remains a significant impediment to entrepreneurship in general.
Table 1: Key Metrics and Rankings
|TI Corruption Perceptions Index||2018||165 of 180||https://www.transparency.org/country/AGO|
|World Bank’s Doing Business Report “Ease of Doing Business”||2019||173 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2018||N/A of 126||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($780M USD, stock positions)||2017||$780||https://ustr.gov/countries-regions/africa/southern-africa/angola|
|World Bank GNI per capita||2017||$3,570||https://data.worldbank.org/country/angola|
1. Openness To, and Restrictions Upon, Foreign Investment
Policies on Foreign Direct Investment
Angola’s business environment remains one of the most difficult in the world. Investors must factor in pervasive corruption, the legacies of and impulses toward central planning and control, an underdeveloped financial system, loss of U.S. corresponding banking relationships, abundant but unskilled labor, and extremely high operating costs. Surface transportation inside the country is slow and expensive, while bureaucracy and port inefficiencies complicate trade and raise costs.
The new government is making concerted efforts to improve and diversify sources of foreign direct investment (FDI). The New Private Investment Law (NPIL) approved by Presidential Decree 10/18, of June 26, 2018 eliminates preferential treatment to local investors and offers equal treatment to foreign investors. There are no laws or practices that discriminate against foreign investors, including U.S. investors. FDI is concentrated in the oil industry with negligible investments in the diamond, power generation, infrastructure and health sectors. The NPIL also eliminated local content provisions for foreign investors, with local content provisions now only applicable to investments specific to the oil & gas, mining, banking and financial services, aviation, and shipping sectors.
In addition to changes to the investment legal framework, the government created the Agency for Private Investment and Export Promotion (AIPEX), a single state-run agency with the goal of facilitating investment and export processes. In September 2018, the American Chamber of Commerce in Angola (AMCHAM-Angola) and AIPEX launched Angola’s first investment guide in New York. Angola’s first anti-trust law, approved on May 17, aims to ensure and safeguard sound competition practices in the award and enforcement of public contracts.
The government launched a series of measures to expedite the issuance of tourist and business visas, a historically difficult process that has been a major area of complaint from international companies, expatriate workers, and investors. The government abolished the visitor visa requirement for several countries in the region, and as of March 30, it began issuing tourism visas on arrival at the airport to citizens from 61 countries/regions, including the United States, China, and the European Union (EU).
President Lourenço continued a concerted effort to restore investor confidence by prioritizing anti-corruption and the fight against patronage politics. In early December 2018, his administration rolled-out an ambitious five-year strategy to tackle corruption, money laundering and other economic and financial crimes. The strategy focuses on three main pillars – prevention, prosecution, and institutional capacity building, and includes short and long-term initiatives for a-whole-of society approach to help reduce the impact of corruption. These strong anti-corruption initiatives led to the detention of several high-level public and private figures, and the President dismantled most of the influence of his predecessor’s family over key sectors of the economy. These reforms have attracted considerable international attention.
Limits on Foreign Control and Right to Private Ownership and Establishment
With the NPIL, the Angolan government eliminated the 35 percent local content requirement in foreign investments, and it offered incentives to companies investing in the domestic economy, while maintaining minimal FDI screening processes, bringing it more in line with those of its sub-Saharan African neighbors. Foreign ownership remains limited to 49 percent in the oil and gas sectors, 50 percent in insurance, and 10 percent in the banking sectors. There are several objectives that the GRA seeks to accomplish through its FDI screening process: 1) create jobs for Angolans or transfer expertise to Angolan companies as part of the “Angolanization” plan; 2) protect sensitive industries such as defense and finance; 3) prevent capital flight or any other behavior that could threaten the stability of the Angolan economy; and, 4) diversify the economy.
Other Investment Policy Reviews
Angola has been a member of the World Trade Organization (WTO) since 1996. There have been no investment policy reviews for Angola from either the Organization for Economic Cooperation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD) in the last five years. The WTO performed a policy review of Angola in September 2015. Excerpts of the Trade Policy Review concluding remarks by the WTO Chairperson were as follows:
“Members noted that Angola had implemented a number of measures aimed at import substitution. Its applied tariff rates have been significantly increased and range from 2 percent to 50 percent, with a simple average of 10.9 percent (up from 7.4 percent in 2005). Members urged Angola to rectify the instances where applied tariff rates and other duties and charges exceed the corresponding bound levels. In lieu of import substitution, members suggested that Angola reduce production costs through lower import tariffs on inputs and further trade facilitation measures with a view to enhancing competitiveness and promoting local production.”
Members welcomed Angola’s new mining code and sought information about opportunities for foreign operators. They sought clarifications about Angola’s agricultural policy, which deals with food security and aims for sustainability of its fisheries sector. Some participants inquired about Angola’s plans to broaden its General Agreements on Trade in Services (GATS) commitments beyond its three existing sectors. Members were also interested in the Government’s priorities regarding, inter alia, competition policy, Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) regimes, and state-trading and state-owned enterprises. Noting that Angola’s intellectual property regime had not been substantially updated since 1992, members urged the country to implement the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and to broaden its participation in international conventions on intellectual property. The Customs Tariff for import/export rights version of 2017 of the World Customs Organization (WCO) harmonized system came into force on August 9, 2018.
The World Bank Doing Business 2019 report ranked Angola 173 out of 182 countries and also recorded an improvement in Luanda’s electrical grid and overall access to electricity, and the government’s facilitation of border trade by improving infrastructure at the Port of Luanda. Dealing with construction permits was made easier and less time-consuming because of improvements in the permit applications system, according to the World Bank. Angola also made exporting and importing easier by implementing an automated and standardized customs data management system, ASYCUDA World (Automated System for Customs Data), and by upgrading its port community system to allow for electronic information exchange between different parties involved in the import/export process. Launching a business typically requires 36 days, compared with a regional average of 27 days.
In 2012, the government opened approximately twenty “Balcoes Unicos do Empreendedor” (Single “One stop” Shop for Entrepreneurs). In addition to the Balcoes Unicos process, new business owners must also complete processes at the Ministry of Commerce, the tax office, and a provincial court in the location where the business has its headquarters. The newAIPEX that replaced the Angolan Investment and Export Promotion Agency (APIEX) now serves as a one-stop shop to promote investments, exports and the international competitiveness of Angolan companies. The new state-run private investment agency website is . Contact Information: Departamento de Promoção e Captação do Investimento; Agencia de Investimento Privado e Promoção de Investimentos e Exportações de Angola (AIPEX). Rua Kwamme Nkrumah No.8, Maianga, Luanda, Angola Tel: (+244) 995 28 95 92| 222 33 12 52 Fax: (+244) 222 39 33 81
To encourage the flow of investors and boost tourism, Presidential Decree 56/18, of February 20, 2018 exempts several neighboring countries from visa entry requirements, and as of March 30, visas upon arrival are available to 61 countries/regions including the United States and the EU upon presentation of proof of accommodation and financial support. The 2018 NPIL eliminates the 35 percent local partner stake in the capital structure of foreign investment in the electricity and water, tourism, transport and logistics, construction, media, telecommunications, and information technology (IT) sectors.
Angolan law provides equal access for women entrepreneurs and underrepresented minorities in the economy. However, in practice, the investment facilitation mechanisms do not provide added advantages to these groups. Programs to benefit female entrepreneurs and underrepresented groups such as startup projects, business capacity building and development, and financial assistance including micro credit, are mainly implemented by non-governmental organizations and international financial institutions such as the African Development Bank (AfDB), the World Bank (WB), and private sector companies.
The Angolan Government does not promote or incentivize outward investment nor does it restrict Angolans from investing abroad. Investors are free to invest in any foreign jurisdiction. According to data from the BNA, in 2018, government did not invest abroad but received returns on previous investments abroad.
6. Financial Sector
Capital Markets and Portfolio Investment
Angola’s capital markets remain embryonic. To respond to the need for increased sources of financing of the economy, in 2013, the Angolan Government created the Capital Market Commission (CMC). Angola’s banks are likely the most established businesses that could potentially list on an exchange. However, many Angolan banks have a high rate of non-performing loans, reported to be as high as 31 percent. Angola’s banks have struggled in recent years due to the country’s deteriorating economic environment and increasingly high rate of delinquent loans. The Governor of the BNA has stated that Angola’s banks must go through a consolidation phase and has started assessing the banks’ asset capacity. So far, the BNA has revoked the licenses of three banks based on their failure to meet the mandatory new share-capital minimum requirement. The process may limit banks’ ability in the near-term to list on the country’s fledgling stock exchange.
The Angolan government raised USD 3 billion in its second Eurobond issue in international markets with investor demand reportedly reaching nearly USD 9 billion. In August 2012, Russia’s second-largest bank, VTB, managed the sale of Angola’s first international bond, a USD 1 billion, 7-year bond with a 7.0 percent yield. In November 2015, Angola raised a USD 1.5 billion, 10-year Eurobond with a 9.5 percent yield. Angola plans to issue a third Eurobond in the second quarter of 2019.
The BNA has developed a market for short-term bonds, called Titulos do Banco Central, and long-term bonds, called Obrigaçoes do Tesouro. Most of these bonds are bought and held by local Angolan banks. The Obrigaçoes have maturities ranging from one to 7.5 years, whereas the Titulos have maturities of 91 to 182 days. For information on current rates, see: .
Foreign investors do not normally access credit locally. For Angolan investors, credit access is very limited, and if available comes with a collateral requirement of 125 percent, so they either self-finance, or seek financing from non-Angolan banks and investment funds. The termination of the “Angola Invest” government-subsidized funding program for micro, small and medium private enterprises (SMEs) on September 25, 2018 has further reduced funding opportunities for many SMEs. Since its inception in 2012, Angola Invest financed approximately 515 projects worth USD 377 million.
The Angolan National Development Plan provides for the liquidation of unviable state-owned enterprises, the privatization of non-strategic state enterprises and the sale of shareholding by 2022. In January 2018, the president created a commission to prepare and implement the privatization process, via the Stock Exchange.
Money and Banking System
The BNA has remained under considerable pressure to stabilize Angola’s economy as a high rate, currently 31 percent, of non-performing loans has crippled the banks’ ability and willingness to foster private sector lending. The BNA implemented a contractionary monetary policy, reducing local currency in circulation over fears of escalating inflation and foreign currency arbitrage. To address further these concerns, in early 2018, the government also scrapped the Angolan currency’s fixed peg to the U.S. dollar in favor of greater rate flexibility, and began regular foreign exchange auctions to banks, preventing the allocation of dollars to preferred clients. A 47 percent devaluation of the local currency throughout the year meant an increase in Angola’s debt, now close to 85 percent of GDP.
The IMF projects Angola’s economy will recover in 2019, in large part due to additional regulatory reforms that should open up the economy to more investment. Angola’s agreement with the IMF for USD 3.7 billion in financial support suggests the government’s intent to reassure investors, and to diversify Angola’s source of borrowing. As a key condition of the IMF loan, Angola cannot have any new oil collateralized debt. The government also resorted to international capital markets and raised USD 3 billion in its second Eurobond issue with investor demand reportedly reaching nearly USD 9 billion. The issue was in two installments, the first with a ten-year maturity, a nominal value of USD 1.75 billion, and a coupon fixed at 8.35 percent. The second, with a 30-year maturity, nominal value of USD 1.25 billion, and a coupon of 9.375 percent.
There are currently 27 banks in Angola. Five banks, Banco Angolano de Investimentos (BAI), Banco Economico, Banco de Fomento Angola (BFA), Banco BIC Angola (BIC) and Banco de Poupança e Credito S.A.R.L. (BPC), control over 80 percent of total banking assets, deposits, and loans. Angolan banks focus on profit generating activities including transactional banking, short-term trade financing, foreign exchange, and investments in high-interest government bonds. Banks had until the end of 2018 to comply with the newly BNA-set USD 50 million mandatory capital start-up requirement, up from the previous USD 25 million requirement. In early 2019, the BNA revoked the operating licenses of two banks, Banco Mais and Banco Postal, for failing to increase their capital to meet the new minimum requirements. Another bank, Banco Angolano de Negocios e Comercio, is currently under BNA administration.
Angola has been affected by the broader global de-risking trends wherein banks decide to stop lending to businesses in markets deemed too risky from an anti-money laundering and terrorist financing compliance (?) standpoint. In December 2016, Deutsche Bank, the last international bank providing dollar-clearing services, closed its dollar clearing services in Angola. A limited number of international banks still operate in Angola and provide limited trade finance such as Germany’s Commerzbank and South Africa’s Standard Bank. In 2018, there were no further correspondent bank losses. International banks previously refrained from entering the Angolan market because of the risk of fines and other penalties, but in 2018 there was more interest, with several banks conducting independent assessments of the business climate.
Foreign Exchange and Remittances
Foreign Exchange Policies
Angola continues trading mostly in two currencies, the U.S. dollar and the Euro, with the Renminbi gaining greater prominence given the degree of trade with China. In a bid to deal with the foreign currency shortage and substantial foreign currency arbitrage in the parallel market, the government has opted for a managed float for its currency exchange rate. The Angolan Kwanza was pegged at a rate of 166.00 per U.S. dollar from April 2016 to January 2018 following a steep devaluation due to the slump in oil prices. On January 10, 2018 the BNA began conducting foreign currency auctions allowing the kwanza to fluctuate within an undisclosed but controlled band. Since dropping the peg to the U.S. dollar in January 2018, the Kwanza has depreciated by approximately 47 percent.
The National Bank of Angola (BNA) set new rules for foreign exchange and remittances on November 19, 2018 in order to curb depleting foreign currency reserves. Under Instruction no. 15/2018 of November 19, 2018 the BNA sells foreign currency (U.S. dollar and Euros only) to commercial banks by auction. Commercial banks may then assign foreign currency to their clients based on a schedule submitted and approved by the BNA. On the sale by banks to exchange offices and remittance companies, banks may only make foreign currency available in physical notes on a collateral basis, as they must, at the time of sale debit the national currency account of those institutions against delivery of physical notes. Banks may charge a margin of up to 2 percent on the reference exchange rate published on the institutional website of the National Bank of Angola, considered high for investors.
Payment of remittances in any form and non-strategic imports face a lengthy wait between 90-180 days for foreign exchange. Priority is given to strategic importers of food, raw materials for construction, agriculture, medicine and the oil sector. The government also has a huge backlog of forex arrears of approximately USD 3 billion.
Investors cannot freely convert their earnings in kwanza to any foreign exchange rate due to limited available foreign exchange. Credit cards and other options for payment are extremely limited and money-servicing businesses (Western Union & MoneyGram) have ceased foreign outward transactions in foreign currency.
The Angolan government established anti-money laundering restrictions in January 2014 and is currently revising the law to better combat illicit remittance flows. The subsequent drop in foreign exchange availability in Angola, beginning in 2015 due to declining petroleum revenues, has severely impeded personal and legitimate business remittances.
International and domestic companies operating in Angola continuously face significant delays securing foreign exchange approval for remittances to cover key operational expenses, including imported goods and expatriate salaries. Profit and dividend remittances are even more problematic for most companies, including foreign airlines with withheld remittances for the sector currently valued by the International Air Transport Association (IATA) at USD 137 million, down from USD 540 million in June 2018.
The BNA is trying to facilitate remittances of international supplies by introducing payment by letters of credit. Also, the 2018 NPIL grants foreign investors “the right and guarantee to transfer abroad” dividends or distributed profits, the proceeds of the liquidation of their investments, capital gains, the proceeds of indemnities and royalties, or other income from remuneration of indirect investments related to technology transfer after proof of implementation of the project and payment of all taxes due. The government continues to prioritize foreign exchange for essential goods and services including the food, health, defense, and petroleum industries.
Sovereign Wealth Funds
In October 2012, President dos Santos established a petroleum-funded USD 5 billion sovereign wealth fund called the Fundo Soberano de Angola (FSDEA). The FSDEA was established in accordance with international governance standards and best practices as outlined in the Santiago Principles. In February 2015, the FSDEA was recognized as transparent by the Sovereign Wealth Fund Institute (SWFI), receiving a score of 8 out of 10. The FSDEA has the express purpose of profit maximization with a special emphasis on investing in domestic projects that have a social component ( ). Jose Filomeno dos Santos (Zenu), son of former President Jose Eduardo dos Santos, was appointed chairman of FSDEA in June 2013, but has since been removed by President Lourenco based reportedly on poor results at the FSDEA and conspiracy with the Fund’s wealth manager, Quantum Global (QG) to embezzle FSDEA funds. Former Minister Carlos Alberto Lopes was named new head of the FSDEA. Zenu, on house arrest, remains under investigation for money laundering, embezzlement, and fraud related to his management of the FSDEA, and for fraud in connection with the transfer of USD 500 million from the Angolan Central Bank to a bank in the UK. On March 22, 2019 the government also freed Jean-Claude Bastos de Morais, QG’s CEO, in preventive detention since September 2018, based on the insufficiency of evidence to support the collection of malfeasance charges.
Half of the initial endowment of FSDEA was invested in agriculture, mining, infrastructure, and real estate in Angola and other African markets, and the other half was supposedly allocated to cash and fixed-income instruments, global and emerging-market equities, and other alternative investments. The FSDEA is reportedly in possession of approximately USD 2.24 billion of its private equity assets previously under the control of QG.
7. State-Owned Enterprises
In Angola, certain state-owned enterprises (SOEs) exercise delegated governmental powers, especially in the mining sector where the government is the sole concessionaire. Foreign investors may sometimes find demands made by SOEs excessive, and under such conditions, SOEs have easier access to credit and government contracts. There is no law mandating preferential treatment to SOEs, but in practice they have access to inside information and credit. Currently, SOEs are not subject to budgetary constraints and quite often exceed their capital limits.
SOEs, often benefitting from a government mandate, operate mostly in the extractive, transportation, commerce, banking, and construction sectors. All SOEs in Angola are required to have boards of directors, and most board members are affiliated with the government. SOEs are not explicitly required to consult with government officials before making decisions. By law, SOEs must publish annual financial reports for the previous year in the national daily newspaper Jornal de Angola by April 1. Such reports are not always subject to publically released external audits (though the audit of state oil firm Sonangol is publically released). The standards used are often questioned. Not all SOEs fulfill their legal obligations, and few are sanctioned.
Angola’s supreme audit institution, Tribunal de Contas, is responsible for auditing SOEs. However, the Tribunal de Contas does not make its reports publicly available. Angola’s fiscal transparency would be improved by ensuring its supreme audit institution audits SOEs, as well as the government’s annual financial accounts, and makes public its findings within a reasonable period. Publicly available audit reports would also improve the transparency of contracts between private companies and SOEs.
In November 2016, the Angolan Government revised Law 1/14 “Regime Juridico de Emissão e Gestão da Divida Publica Directa e Indirecta,” which now differentiates between ‘direct’ and ‘indirect’ public debt. The GRA considers SOE debt as indirect public debt, and only accounts in its state budget for direct government debt, thus effectively not reflecting some substantial obligations in fact owed by the government. President Lourenço has launched various reforms to improve financial sector transparency, enhance efficiency in the country’s SOEs as part of the National Development plan 2018-2022 and Macroeconomic Stability Plan. The strategy included the prospective privatization of 74 SOEs that are deemed not profitable to the state. The privatization will possibly include the restructuring of the national air carrier TAAG, Sonangol, and its subsidiaries. The latter intends to sell off its non- core businesses as part of its restructuring strategy to make the parastatal more efficient.
Angola is not a party to the WTO’s Government Procurement Agreement (GPA). Angola does not adhere to the OECD guidelines on corporate governance for SOEs.
The government has a plan to privatize 74 of 90 public companies by 2022 through the Angola Debt and Securities Exchange market (BODIVA) and under the supervision of the Institute of Management of Assets and State Participations (IGAPE). The privatization plan is in line with the provisions of the Government’s Interim Macroeconomic Stabilization Program (PEM), which aims to rid the government of unprofitable public institutions. The terms of reference for the privatization program are not yet public, except for seven factories located in the Special Economic Zone (ZEE). The seven industrial units with full terms of reference are:
UNIVITRO – glassworks industry; JUNTEX – plaster industry; CARTON – carton and packaging industry; ABSOR – absorbent products industry; INDUGIDET – sanitation and detergents industry; COBERLEN – blankets and linens industry; and, SACIANGO – cement bags industry.
The government plans to privatize part of state-owned Angola Telecommunications Company, companies in the oil and energy sector, as well as several textile industries. The government has stated that the privatization process will be open to interested foreign investors and has guaranteed a transparent bidding process. Proposals from investors for seven industrial units at the ZEE will be given special attention to those who decide to retain local workers in these units. The government created a privatization commission on February 27, 2018 and a website for submission of tenders. Full tender documents can be obtained by visiting the below link:
Alternatively, contact firstname.lastname@example.org. The tenders are open to local and foreign investors.
Corruption remains a strong impediment to doing business in Angola and has had a corrosive impact on international market investment opportunities and on the broader business climate. Transparency International’s 2019 Corruption Perceptions Index ranks Angola 165 out of 175 countries in its corruption level survey, down two places from the previous year due to ongoing efforts to bring down corruption to lower levels.
Since coming into office, President Lourenco has led a concerted effort to restore investor confidence by prioritizing anti-corruption and the fight against nepotism. President Lourenco has dismissed a number of prominent Angolan figures from government ministries and SOEs and has replaced board members charged with developing plans to improve operations and accountability in public institutions. The president approved a set of amendments to the Public Contracts Law on November 16, 2018, which imposed further requirements for the declaration of assets and income, interests, impartiality, confidentiality, and independence in the formation and execution of public contracts. On December 6, the Government of Angola rolled out of a national anti-corruption strategy (NACS) billed under the motto, “Corruption – A fight for All and By All.” The five-year strategy, developed in concert with the UNDP, is designed to improve government transparency, accountability, and responsiveness to citizen needs. The NACS focuses on three pillars in the fight against corruption – prevention, prosecution, and institutional capacity building.
The government also passed the Law on the Repatriation of Financial Resources in June 2018, which established the terms and conditions for the repatriation of financial resources held abroad by resident individuals and legal entities with registered offices in Angola. The law exempted individuals and legal entities, who voluntarily repatriated their financial resources within a period of 180 days following the date of entry into force of the Law, by transferring the funds to an Angolan bank account, from any obligation or liability of tax, foreign exchange and criminal nature. Upon expiry of the grace period for repatriation, the Law allowed for the possibility of coercive repatriation by the government. The government estimates that USD 30 billion of Angolan assets are sheltered overseas. In early 2019, the government established the National Asset Recovery Service (SNRA), an institution linked to the Attorney General’s Office (PGR), in charge of ensuring compliance with the repatriation law.
The 2010 Law on Administrative Probity, unlike President Lourenco’s mandate for senior government officials, requires all public officials to disclose their assets and income once every two years, and it prohibits public servants from receiving money or gifts from private business deals. The Penal Code makes it a criminal offense for private enterprises to engage in business transactions with public officials. Angola has incorporated regional anti-corruption guidelines and into their domestic legislation, including: the SADC “Protocol Against Corruption,” the African Union’s “Convention on Preventing and Combating Corruption,” and the United Nation’s “Convention against Corruption.” Angola does not have an independent body to investigate and prosecute corruption cases, and generally, enforcement of existing laws is weak or non-existent. Three institutions – the Audit Court, the Inspector General of Finance, and the Office of the Attorney General – perform many of the anti-corruption duties in Angola.
It is important for U.S. companies, regardless of their size, to assess the business climate in the sector in which they will be operating or investing, and to have an effective compliance program or measures to prevent and detect corruption, including foreign bribery. U.S. individuals and firms operating or investing in Angola, should take the time to become familiar with the relevant anticorruption laws of both Angola and the United States in order to properly comply with them, and where appropriate, they should seek legal counsel.
In 1996 the Government of Angola enacted by presidential decree the Alta Autoridade Contra Corrupção (High Authority Against Corruption) Act. There has been no action taken to implement the law since it was enacted in 1996.
UN Anticorruption Convention, OECD Convention on Combatting Bribery
Angola is not a member state to the UN Anticorruption Convention or the OECD Convention on Combatting Bribery. On March 26, 2018 it ratified and published in the national gazette the African Union Convention on the Prevention and Fight against Corruption and now takes legislative measures against illicit enrichment (Article 8), confiscation and seizure of proceeds and means of corruption (Article 16), and international cooperation in matters of corruption and money laundering (Article 20).
Resources to Report Corruption
Hélder Pitta Grós
Procurador Geral da Republica (Attorney General of the Republic)
Procurador Geral da Republica (Attorney General’s Office)
Travessa Antonio Marques Monteiro 22, Maianga