Angola Invest

The BNA has introduced a new regulatory measure, marking another step on its journey to making Angola an enticing investment prospect. James King reports.

In early July, the Banco Nacional de Angola (BNA), Angola’s central bank, introduced new rules permitting the execution of foreign exchange (FX) capital operations without the central bank’s approval. By removing its licensing function from a range of financial transactions, including credit operations, the BNA has taken a further step towards the liberalisation of Angola’s FX market and wider economy. 

The change applies in instances where rights or obligations are created or exchanged between resident and non-resident entities, including granting and repaying loans, the acquisition of stakes in Angolan companies, and the issuance and execution of guarantees, among others. 

The BNA’s regulatory amendment, which has been welcomed by market participants, grants Angola’s banks additional rights and responsibilities, particularly in the fight against money laundering. Banks must conduct thorough transaction analysis, while ensuring effective know-your-customer (KYC) controls are in place. This includes a complete awareness of a client’s financial information, their position with respect to the national tax authorities and independently audited or verified financial statements.

As such, the central bank’s new measure signals the further delegation of responsibility away from the public authorities to the private sector.

An improving investment landscape

The BNA’s intervention is particularly important for Angola’s investment profile, since it eases the regulatory and bureaucratic burden of doing business. “[Following the introduction of the regulatory change], capital operations performed by legal entities do not require prior approval from the BNA, which facilitates intra group loans and the acquisition of shares in Angolan entities,” says Renata Valenti, a partner at law firm PLMJ.

These specific measures were essential for foreign investors and also for Angolan companies

Renata Valenti

The move follows an earlier BNA regulatory amendment in December 2021, in which the framework for executing foreign direct investment operations and the repatriation of capital by certain non-residents was defined. Together, these changes form part of a wider effort to liberalise the financial and business operating environment, a task on which the current government is working with the International Monetary Fund (IMF).

“It’s very difficult to sell the idea of investing in a country when foreign investors don’t know if they can get their money out. These specific measures were essential for foreign investors and also for Angolan companies that have commercial relationships with foreign companies,” says Ms Valenti.

But more to be done

Even as these changes are expected to deliver long-term benefits for Angola, commentators concede that much more needs to be done to improve other aspects of its investment landscape. This includes targeted regulatory reforms of the country’s financial markets. Today, for instance, a number of restrictions and impediments continue to hurt the competitiveness of Angola’s capital markets vis-à-vis other countries in the region. 

Rui Oliveira, chief executive of Banco de Fomento Angola (BFA) Asset Management, says: “There are still a number of problems if you are a fund manager or if you work in capital markets. In Angola, it is prohibited to create any fund that is FX denominated; it has to be in local currency.”

Moreover, entrenched political and regulatory risk perceptions of Angola are blunting the inflow of much-needed private capital. “When we talk about portfolio investments, private equity (PE) or venture capital (VC), if you don’t have that – and Angola doesn’t – it’s a problem. The research tells us that in the past 10 years or so there hasn’t been any PE or VC activity in Angola at all,” says Mr Oliveira.

“That, to me, is a sign that private capital is still not willing to take a risk on Angola. In my view, private capital is what will move this country to the next level,” he adds.

Steady gains

Despite these challenges, Angola’s financial markets have still registered a number of important milestones in recent times. In June, the initial public offering (IPO) of Banco BAI, the country’s largest lender, marked the first IPO for the nation’s stock exchange, with as many as 20 further listings expected in the coming few years.

Additionally, BFA Asset Management launched Angola’s first exchange-traded fund this year, and expects to launch an impact fund by the end of 2022 targeting small and medium-sized enterprises.

Even so, more work is needed to put Angola on an equal investment footing with its continental peers. “What are the required conditions for us to be able to become a place for private investors to allocate their capital?” asks Mr Oliveira. “If they’re allocating in Namibia, or Malawi, why shouldn’t they be allocating money to Angola? Those are the questions that we have to be asking in order to understand the changes that need to be made domestically.”


All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker

For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Top 1000 2023

Request a demonstration to The Banker Database

Join our community

The Banker on Twitter