Angola: International crisis leads to fall in foreign in investment, says KPMG

28 April 2009

Luanda, Angola, 28 April – The fall in foreign investment, except from Portugal, and the depreciation of the kwanza were some of the effects of the global crisis on the Angolan economy, said KPMG consultant, Paul de Sousa.

According to the consultant from KPMG, one of the leading global companies in the fields of auditing, taxes and consulting, other foreseeable consequences are an increase in the cost of credit, a lack of liquidity, a significant reduction in the growth of the GDP, payment difficulties for entrepreneurs who have accumulated various loans, due in part, to the lack of a public credit registry and a fall in the price of housing, at least in some areas, such as Luanda Norte and Luanda Sul.

All this amounts to the collateral effects of a nuclear explosion: brought about by the fall in oil prices, with a negative effect on tax revenues and on public investment.

Paul de Sousa admitted that lately there had been an increase in credit lines to Angola from different sources but added that this might not be enough to make up for “the reduction in national savings and in private funds and those loaned by the Government,” that would occur.

The persistence of the current crisis in Angola will depend, decisively, on the evolution of oil prices, on which in turn, depends the recovery of the global economy, particularly for a return to the high rate of growth in China, which, in other words, he added, would “give North America the capacity to consume and China the capacity to produce.” (macauhub)