Angolan Finance Minister says banking development meets with government expectations

13 October 2006

Luanda, Angola, 13 Oct – Angola’s Finance minister, José Pedro Morais, said Thursday in Luanda that the positive results obtained by Angola’s banking sector in the last two years, and cited in the Deloitte Angola report, had met with the government’s expectations.

According to Morais, who was speaking at a session to present the Deloitte report, banking sector profits – obtained in a country with low social indicators, which was under reconstruction and re-launching its economy – were mainly from applying reserves in Treasury and Central Bank bonds.

Morais also noted the sector’s profitability, which was higher than markets such as the United States, South Africa, Portugal and Brazil.

In terms of public debt, the Minister said that it was no longer necessary to issue short term Treasury Bonds to finance treasury crises or rapidly increase the country’s foreign reserves, which have given way to long term Treasury Bonds focused on financing strategic projects for economic and social infrastructures.

According to Morais, in the last three years there had been advances made in macroeconomic terms and public finances, setting up conditions for reducing inflation, strengthening foreign reserves and boosting business.

Inflation has fallen from 105 percent in 2002, to 7.54 percent in the first nine months of 2006, which is close to the 10 percent target set for this year.

At the same time the country accumulated sufficient foreign reserves to re-establish solvency and security ratios for the economy in its economic and financial dealings with the international community, he said.

With this scenario in place, Morais said, private business deals could be carried out in a secure economic climate, safeguarded from the risks of losses due to inflation or exchange and interest rate volatility.

The report, carried out in partnership with Angolan banking association, Abanc, describes the Angolan banking sector as “ a system undergoing a revolution,” as a result of a favorable macroeconomic climate, with high growth, strong liquidity of the national currency (kwanza), reduced inflation and falling interest rates.

The work carried out by Deloitte provides answers to important questions about the sector and presents indicators in comparison with financial markets such as South Africa, the United States, Portugal and Brazil, which were compiled using financial data from over a thousand banks, including Angola’s 12 banks. (macauhub)