“There is light at the end of the tunnel”
Leading financial institutions operating in Angola’s oil and gas sector remain optimistic toward the country’s fiscal and investment climate.
In a panel discussion focused on financing and investing in a diversified national economy during the Angola Oil & Gas 2019 conference, financial institutions based both in and outside of the country reaffirmed positive growth projections due to recent legislation and the development of the non-oil sector. The panel featured representatives from Banco BIC, Banco Angolano de Investimentos, Afreximbank, Standard Bank, Commerzbank AG, MC Jurist and Citigroup.
“The projection for this year is now positive. Coming from a context of recession and production dipping from 1.7 million barrels of oil per day (bopd) to 1.45 bopd currently, the fact that growth is still expected this year is a demonstration that the reforms that our government has put in place will give positive results,” said Humphrey Nwugo, Regional COO of Southern Africa for Afreximbank.
Among several new reforms implemented within the last year, most notably are the first Competition Law (Law no. 5/18) passed last May and the Private Investment Law (Law no. 10/18) passed last June, establishing the principles and general bases of private investment in Angola and the benefits that the Angolan state grants to private investors.
Another key contributor to economic growth is the country’s National Production, Export Diversification and Import Substitution Program, which aims to stimulate the economy through new investments and prevent the outflow of foreign exchange by encouraging other non-oil sectors to contribute to the gross domestic product of the country. Currently, 80 percent of refined products are imported.
“We have seen tremendous efforts of the country to strengthen institutions, increase transparency and increase levels of compliance,” said Martin Hercules, Senior Representative from Commerzbank AG. “As a commercial bank, we deal a lot with institutions, the Ministry of Finance, Sonangol and the Central Bank, and we have seen substantial progress not just in the facts but also in the mindset of people. For foreign companies interested in Angola, especially in oil and gas, it is time to seriously consider doing something in Angola. We are still in a very strong economic downturn, but there is light at the end of the tunnel.”