1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

A NG OL A
of GDP in 1996. E x p o rts increased by 36 percent in 1996 to
USD5.1 billion, m a i n ly because of a 12 percent increase in oil
e x p o rt volumes and a 19 percent increase in international oil
p r i c e s . R e c o rded diamond export receipts increased by 59
p e rc e n t . Data on imports are limited, but present estimates
point to an 18 percent rise in 1996 to about USD2.2 billion. T h e
c apital account showed a surplus of some USD106m in 1996,
owing mainly to higher loan disbursements. The above
explained trend was expected to continue in 1997 with the
exception of international oil price levels which we re expected
to dro p.The continued decline in oil prices seen so far in 1998
indicates that even if production incre a s e s ,A n gola is like ly to
experience a decline in export reve nues in dollar terms this
ye a r.
A n go l a ’s external debt was reduced from USD13.7 billion at
end-1995 to USD10.1 billion at end-1996, as a result of the
cancellation of 70 percent of the stock of debt and arrears to
the Russian Fe d e r a t i o n ,and the rescheduling of the remaining 30
p e rc e n t . In add i t i o n , USD1.2 billion of short-term debt to
Po rtugal was conve rted into medium- and long-term debt. A t
the end of 1997, A n go l a ’s external debt was equivalent to 129
p e rcent of exports of goods and non-factor serv i c e s , and its
d e b t - s e rvice ratio amounted to 33 perc e n t .
The much discussed IMF programme was not instituted in 1997
as had been anticipated. The IMF is due to visit A n gola for art i c l e
IV consultations in May 1998,but it is unclear what the outcome
of this visit will be. The IMF has expressed concern at the lack
of transparency with re g a rd to the handling of oil export
p ro c e e d s .
Financial Institutions
Since 1991, the A n golan government has been attempting to
c reate a more efficient and diversified banking system. U n d e r
these new re forms Banco Naçional de A n gola now acts solely as
a central bank,being responsible for monetary policy and issuing
of bank notes and coins. As a banker of the government it
administers the tre a s u ry ’s account, e f fecting payments and
collecting tax income on behalf of the authorities. The bank is
also co-responsible for the fo r mulation of monetary and
exchange rate policies and is largely responsible for the
e xecution of these policies. H oweve r, m o n e t a ry policy is in
practice determined by the gove r n m e n t ’s economic team which
includes the Minister of Finance, the Governor of the central
bank and the Minister of Planning, and is headed by the latter.
F u rther developments are the arrival of fo reign banks who have
established offices in the country. P roblems still exist, h oweve r,
in that credit facilities for businesses are inadequate and large
p a rts of the country, e s p e c i a l ly small tow n s , a re underbanke d .
T h e re are five commercial banks in A n go l a .Two are stateow
n e d : Banco de Poupança e Crédito and Banco de Comérc i o
e Industria, and three Po rtuguese private banks: Banco de
Fomento e Exterior, Banco Totta e A ç o re s ,Banco Po rtuguês do
A t l ã n t i c o.
M o n ey and capital markets are still poorly developed and the
i n formal money market is thus used extensive ly. The first steps
to create a capital market have been take n . A task fo rce has
been set up to discuss primary legal and economic fo u n d a t i o n s
and to pre p a re a basis for the creation of a Capital Marke t
S u p e rv i s o ry Commission. The task fo rce will also analyse the
d e regulation and restructuring of the insurance industry, and to
a n a lyse debt restructuring and privatisation issues.
E x c h a n ge Control and Currency Conve rt i b i l i t y
The A n golan Kwanza is not conve rt i b l e, and exportation of
domestic currency is pro h i b i t e d . Banco Naçional de A n go l a
publishes two sets of exchange rates on a daily basis - one fo r
its transactions with commercial banks and one for transactions
b e t ween the commercial banks and economic agents. Fo re i g n
c u rrency accounts are permitted, into which fo reign curre n c y
(in cash, t r avellers cheques or fo reign payment orders) may be
d e p o s i t e d . Chequebooks may not, h oweve r, be issued against
these accounts. Exchange control regulations are fairly strict.
Dividends earned by fo reign investors may be taken out of
A n gola if the investment in the resident company exceeds USD
2 5 0 , 0 0 0 .Tr a n s fers of personal capital are permitted only on a
c a s e - by-case basis. All capital transfers are subject to licensing
and contro l .
Fo reign Trade
A n gola has come to depend ove r w h e l m i n g ly on oil for its
e x p o rt earnings, with the USA being the main market fo r
e x p o rt s .In 1996,crude oil made up over 90 percent of export s .
T h e re is much underutilised potential in other are a s , h oweve r,
such as diamond mining, c o f fe e, and fishing.The promotion and
d i versification of exports have been recognised by the
goverment as one of the ways to facilitate grow t h .
Up until re c e n t ly, A n gola has had few trade ties with southern
African countries. H oweve r, o p p o rtunities for trade with
countries in the region have opened up. Relations with South
Africa have improved during the 1990s, and there has been a
notable increase in trade (especially imports) with South A f r i c a .
Trade Liberalisation
All imports and exports must be licensed by the Ministry of
C o m m e rc e. An import license fee of 0.1 percent of the value of
the imports is lev i e d , and import licenses are only granted to
enterprises of proven cap a c i t y. E x p o rts of certain goods are
p ro h i b i t e d .
Fo reign Direct Inve s t m e n t
Since 1994 the number of ap p rove d 2 ) p rojects have incre a s e d
s u b s t a n t i a l ly. B e t ween 1990-1997 projects amounting to a total
of USD800m we re ap p rove d . Most ap p roved investments are
f a i r ly small, a round USD250,000, and half of all projects have a
value of less than USD1m each. The largest single inve s t m e n t
thus far amounted to USD120m. A large pro p o rtion (more than
80 percent) of the invested amounts is used for imports of
equipment and other go o d s ;the remainder for the purchase of
assets in A n go l a .
The geographical distribution of ap p roved investments show s
that some 75 percent originate in Euro p e, fo l l owed by We s t
Africa with 11 percent of all investments (mainly from Nigeria).
Po rtugal is the single biggest inve s t o r. South African inve s t m e n t s
a re slow ly incre a s i n g ,with Anglo American Corporation and De
Beers making investments in 1997. Other South African firms
h ave expressed intere s t ;some invo l vement in consumer go o d s
has already been undert a ken by firms from South A f r i c a . C o c a -
Cola has announced intentions to construct a plant to be
opened north of Luanda in 1999, and De Beers and the state
diamond company, E n d i a m a , will set up a diamond sort i n g
operation in Luanda during 1998.
Privatisation Prog r a m m e
The privatisation of state assets is part of the strategy that the
A n golan government hopes to implement for the purpose of
rebuilding the economy. Due to a number of pro b l e m s ,t h e
privatisation process has not been as rapid as initially planned.
B e t ween 1991 and 1997, a number of small and some mediumsize
enterprises we re privatised, yielding gross reve nues of
2 )
Statistics for actual investments are difficult to obtain.The Inve s t m e n t
Institute howeve r, keeps a re c o rd of all ap p roved inve s t m e n t s .
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