Despite substantial reforms to attract investment, which have already reflected in an improvement in the global corruption perception index, the Angolan economy is still in negative territory. Heavy reliance on oil exports means Angola’s GDP is highly exposed to “contagion” from the effects of the coronavirus crisis in China.
The average export price fell 7.31% compared to the previous year, to US$65.27, leading export revenues to tumble to US$31.2 billion.
In order to contain the drop in oil production, the Oil, Gas and Biofuels Agency (ANPG) kicked off its six-year strategy last October with the auction of 10 blocks, nine in the Namibe Basin and one in the Benguela Basin. Licensing was announced in November and the operator’s group will be defined by 30 April 2020.
By 2025, ANPG plans to sell interests in 50 new blocks for oil exploration in the country, through public tender, restricted public tender or direct negotiations. In 2020, the strategy foresees the launch of a public tender for nine onshore blocks, three in the Congo Basin and six in the Cuanza Basin.
In the mining sector, agreements were recently signed between the executive and multinational Anglo American for five concessions on prospecting for metals: three in Cunene (copper, cobalt and nickel) and two in Moxico (copper, cobalt and silver). According to the CEO, Mark Cutifani, work should begin this year, following the conclusion of details to be agreed with the authorities.
Bur forecasts for 2020, namely from the Economist Intelligence Unit, remain of a further drop in GDP, with oil production remaining historically low, while the non-oil economy stagnates. For the whole of 2019, estimations are of a decline of 1.3%.
In order to attract investment, the government has put forward a number of measures to remove barriers for companies. At the end of January, several proposals were examined and approved by the Council of Ministers, with the purpose of improving the business environment. Proposals already approved include the creation of a single form to allow for the setting up of a business.
On the other hand, the organic statute of the Angolan Development Bank (BDA) was changed, transferring its superintendence to the Ministry of Economy and Planning.
The new anti-money laundering and counter-terrorism finance (AML/CTF) law have also been published on the official gazette. The law came into force on 27 January, fulfilling one of the requirements of the programme agreed with the International Monetary Fund.
Reflecting efforts by the government, Angola’s score in the Corruption Perceptions Index (CPI) went up 7 points, to 26 points in 2019. It’s the country’s highest score to date and saw it climb to the 146th position on the list. Despite the improvement, Angola is still below the global 43-point average and the 32-point average for sub-Saharan Africa, the lowest-scoring region on the CPI.
Another front in revitalising the economy are privatisations, several of which are already ongoing. State oil company Sonangol announced that it had launched a public tender, ended on 30 January, to sell stakes held in six tourism-related companies. It has also announced the launch of tenders for its holdings in other companies, including Sonaid (drilling) and Sonasurf (maritime services).
The public entity responsible for state-owned enterprises (IGAPE) enters its second phase of privatisation, preparing the sale of 13 industrial units in the Luanda-Bengo Special Economic Zone (ZEE).
On the other hand, the government is now taking control of the country’s major telecom company, Unitel, and also of Banco Fomento Angola (BFA), both previously led by Isabel dos Santos, businesswoman and daughter of former president José Eduardo dos Santos.
Sonangol now controls 50% of the capital of Unitel, following an agreement to purchase Brazilian telecom Oi’s 25% stake in the telecommunications operator, concluded at the end of January.
Given that Unitel holds 51.9% of BFA’s capital, Sonangol now controls both corporations. Reflecting the change, a new chairman has already been named for the bank: Rui Mangueira, a career diplomat, who replaced Mário Leite Silva, a Portuguese manager trusted by Isabel dos Santos.
Isabel dos Santos’ stake in Unitel (25%, worth an estimated US$250 million) was frozen by court order at the end of last year, and so her voting rights are vested in the administration of Unitel itself, headed by Portuguese Miguel Geraldes.
According to Africa Monitor Intelligence, with the freezing of her assets, Unitel’s management, hitherto blocked by conflicts between dos Santos and Sonangol, tends towards normalisation. (CLBief/Macauhub)