Angola: After the “Angolanization” of the banking sector, a new phase for Sonangol

29 September 2008

Luanda, Angola, 26 Sept – After having closed the complicated “file” on the “Angolanization” of the banking sector last week, Sonangol could now be on the verge of important internal changes.

Carlos Feijo, well-known Angolan lawyer and legal consultant to the chairman of Sonangol, is set to replace Manuel Vicente at the head of the state-owned oil company, according to Africa Monitor newsletter, published in Lisbon.

According to the same source, the current Chairman of the Board of Directors at Sonangol will be the next Oil Minister in the new Angolan government, after the September elections which were a resounding victory for Jose Eduardo dos Santos’ ruling MPLA.

The anticipated change in Oil Minister should coincide with a real shake-up in the structure of the sector, in terms of the withdrawal of the privilege of national concessions to oil resources from Sonangol, considered negative by institutions such as the IMF.

Through the Oil Ministry, which will therefore have increased powers and influence, or a National Oil Agency, with status of autonomous public institute, the State will become the holder of the concession rights and of the legal capacity to grant exploration licences.

This reconfiguration was mooted at the end of last year by deputy minister Aguinaldo Jaime, considered the main “mentor” for economic policy to Fernando Piedade dos Santos’s government.

“When we felt that these two bodies [the ministries of Finance and Oil] had taken on sufficient capacities, it was time for Sonangol to be completely separate from regulatory activities,” he told the Financial Times recently.

Asked about the timeframe for this reorganisation, Jaime indicated that five years would probably be enough.

The state-owned oil company currently has shares and assets in areas such as transport, communication, banking and insurance, as well as a significant portfolio of external shareholdings including Portuguese oil company, Galp Energia and Millennium BCP, the largest private bank in Portugal.

This week, after over a year of negotiations, the so-called “Angolanization” of the Portuguese-owned banking sector, which was engendering unease amongst many influential figures in political and economic circles in Luanda, was finally concluded.

After Unitel, instead of Sonangol as was initially predicted, secured almost half the capital of the largest private bank in the country, Fomento, controlled by Portuguese bank BPI, the oil company announced its stake in Millenium Angola and Banco Caixa Geral Totta Angola, also Portuguese and with important expansion plans.

Sonangol and its Banco Privado Atlantico (BPA) have acquired a stake in Millenium Angola for US$100 million and the agreement stipulates that the oil company has 29.9 percent of the capital while BPA has 20 percent.

The oil company also has a 25 percent stake in Banco Caixa Geral Totta Angola, and “other investors resident in Angola” have 12 percent each, the rest of the capital being divided amongst Caixa Geral de Depositos, the biggest Portuguese bank, and Santander Totta, Portuguese subsidiary of the Spanish banking giant.

With the conclusion of these agreements, Sonangol has increased its presence in the Angolan financial sector, where it already had stakes in Banco Africano de Investimentos and Banco Popular de Angola.