Public works contracts in Angola revised to incorporate currency devaluation

21 June 2016

The government of Angola has decided to make changes to contracts with construction companies for amounts converted at the exchange rate at the time the contracts were signed, according to presidential orders.

Construction company Centro Cerro is one of the companies whose public works contracts the Angolan government has altered, converting the investment at the 2014 exchange rate, when the proposal was made.

This company’s case involves orders signed by the Angolan President authorising the use of the 2014 exchange rate (1 dollar to 95.05 kwanzas) for two public works contracts, putting the value of the deal at US$216.8 million.

Due to the economic, financial and currency crisis brought on by low oil prices, the Angolan national currency has depreciated by more than 40 percent in the last two years, with the current exchange rate standing at 166 kwanzas per US dollar.

Several other companies, such as Consultores Reunidos, Impulso, TILCA, Solidaeng, VH, One Ouro Negro Exploration, Génius, Sinohydro Construction, Tahal Consulting and DAR, also involved in the construction of water supply systems in the province of Luanda, saw identical contractual changes approved by the government in the last few days. (macauhub/AO/BR/PT)