Angola prepares to privatise some large companies to boost business activities

16 May 2011

Luanda, Angola, 16 May – The Angolan government is preparing the partial privatization of some of the country’s largest companies, despite keeping their identity secret for now, Angolan magazine Exame reported in its latest edition.

“In a market economy model, it is the most capable and daring companies that are the driving force behind the country’s economic reconstruction and the modernisation of national production under the State’s leadership,” the country’s Economy minister, Abraão Gourgel said recently at the presentation of the Programme to Support Angolan Business.

Gourgel noted that in Angola there were a number of public sector companies working as monopolies, with reduced competitiveness and efficiency, which did not meet consumers’ needs.

According to the programme, cited by Exame, the partial privatization of large state companies would be carried out as part of the creation of the Stock Exchange and Capital Market, which has been successively delayed.

A study carried out in Angola in 2006 by Portuguese consultancy CESO for the Angolan government proposed the privatization of 77 companies and closure of 53, of a total of 216 companies at the time.

By 2005, the Angolan state had sold of stakes in companies such as Encime (cement), Mecanang (equipment distribution), Cuca (beverages), Moagem Aliança (mill) as well as some hotels.

One of the privatisations projected for this year is of Angolan public fishing sector company Peskwanza, located in the province of Kwanza Sul, according to the Ministry for Agriculture, Rural Development and Fisheries.

With the Programme to Support Angolan Business, the government expects to increase gross domestic product (GDP) by US$1.1 billion to US$2.4 billion, as well as encouraging job creation.

Another of the ten measures outlined is the creation of a Public Venture Capital Fund to support projects that are due to be launched.

It also covers an increase in the financial services offered by banks, professional training at large companies, easier access to loans by small and medium-sized companies, support to small business owners, support for cooperatives and a new policy for subsidies to support businesses.

The programme also aims to simplify bureaucratic processes, boost consumption of Angolan products, support for infrastructures to support companies, a boost to Exclusive Economic Zones (EEZs) and industrial hubs and the creation of tax breaks for entrepreneurs, as well as setting up the Stock Exchange and Capital Market.

It also chooses priority areas within the agriculture, livestock and fishing, industrial (manufacturing, geology and mining and construction materials) and services sectors.

The programme has funding of US$425 million for the first year, of which US$200 million will be applied to the Guarantee Fund and US$135 will be used to subsidise interest rates for entrepreneurs, amongst other measures.

Once it is fully operational the programme will receive funding of US$435 million per year. (macauhub)