Guidance

Overseas business risk: Angola

Updated 26 July 2023

Information on key security and political risks which UK businesses may face when operating in Angola.

1. Political

The country has been politically stable since the end of the civil war in 2002. On 24 August 2022, Angola held its fifth general election. The election took place against a backdrop of socio-economic challenges exacerbated by the global oil price crash and COVID-19 pandemic. President Lourenço was re-elected for a second and final term in office with 51% of the vote. UNITA, the main opposition party led by Adalberto Costa, received 44% of the vote, proving particularly popular with the youth vote. UNITA secured the most votes in some provinces, including the capital Luanda and the oil-rich exclave Cabinda.

While Lourenço secured another five years in office, he and his MPLA party have lost the two-thirds majority they held in the National Assembly. They are under real pressure to deliver change, demonstrate progress and to reform the informal economy with more job security for Angola’s growing, young and increasingly urban population. The country’s first Local Government Elections are expected to be held during Lourenço’s second term. This will be a test of UNITA’s ability to rally support again and a chance for MPLA to try to regain the support of voters in the most economically active provinces.

The public and private sectors are still closely tied together in Angola and political influence is prevalent in many areas of the business environment. The government is committed to address this but progress is slow. The prioritisation of economic diversification and a push towards privatisation of some of the larger state-owned businesses (many of which have been consistently under-performing) should help to curtail this influence. Private sector legislation has already addressed some previous issues such as the requirement to have a local partner in order to do business in Angola.

2. Economy

Angola is Sub-Saharan Africa’s third largest economy and second largest producer of crude oil. It continues to be heavily reliant on both oil and gas, which account for over 90% of exports. The country was hit hard by the global oil price crash and COVID pandemic but is already recovering and exited its 5-year recession in 2021 with 0.7% GDP growth and 3% in 2022. This is partly due to growth in the non-oil sector.

The Government has taken steps to manage public spending, diversify the economy and reduce commodity-linked debt. Economic and business environment reform are moving ahead at pace and the government is working in conjunction with the World Bank, IMF and other IFIs. However, the stability of the country’s economy remains vulnerable to external shocks, such as oil price and currency fluctuations. The kwanza weakened by 30% in relation to US dollar in the first semester of 2023. This is negatively impacting inflation due to the reliance on imported food.

The staggered removal of fuel subsidies was started in June 2023 resulting in an overnight increase of 87.5% on pump prices for petrol. This is expected to be replicated for diesel later in 2023 with further fuel subsidy reductions to be implemented until 2025. The announcement caused an immediate increase in inflation which had been decreasing. The Government subsequently announced a reduction of VAT from 14% to 7% on food items in an attempt to control inflation and ease the cost of living crisis.

While the government has embarked on a drive for economic diversification (initially focusing on agriculture and manufacturing), this will require time and foreign investment to deliver. Nonetheless, there is a concerted effort to obtain non-commodity based loans and to diversify the country’s stock of overseas investment. The last published World Bank Ease of Doing Business ranking (2020) placed Angola at 177 out of 190 countries. At the macro level, the Government debt to GDP ratio declined to 65% in 2022 from 77.4% in 2021. This was mainly driven by the increased global oil prices and appreciation of local currency, particularly relevant as 71% of the debt stock is in foreign currencies. The Government continued to use part of its windfall oil revenue to make early debt repayments, focusing on clearing commodity-tied debt. External amortisations are forecast to remain stable in 2023 and 2024. Due to 71% of Angola’s debt stock being held in foreign currency, the current depreciation of the kwanza means the country’s debt to GDP is now increasing. Fitch estimates it will reach a high of 78.9% in 2023, up from 65% in 2022, before falling again in 2024 to 69%.

In June 2023, Fitch Ratings maintained Angola’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at B-. However, the general economy outlook was changed from positive to stable due to the challenges around currency and inflation.

Since the Central Bank (BNA) stopped pegging the Angolan currency (Kwanza) to the Dollar in 2018, the Kwanza initially depreciated by almost 100% and remains susceptible to external forces. This process has also significantly narrowed the gap between the official exchange rate and the parallel rate, with the aim of reaching parity over time.

The BNA is working steadily towards simplifying foreign currency access for individuals and businesses. In 2020, BNA contracted the Bloomberg FXGO foreign exchange platform facilitating real-time trading of foreign currency direct to market for a licenced group of national banks and international extractives companies. This allows a greater flow of foreign currency without the BNA having to use its international reserves or needing to be involved in authorising transactions. The regulations on the transfer of foreign currency by individuals was also relaxed in March 2023 so high street banks can now execute transactions up to USD250,000 (or equivalent) in a single transaction, this is also the limit per calendar year.

As of Q1 2023, UK Export Finance (UKEF) allocations to Angola stand at approximately £1.5 billion aimed at key development projects in Angola (spanning energy distribution, agriculture, and healthcare). UKEF will now only consider new lending on a case-by-case basis from 2024 to 2025 fiscal year after a review. For up-to-date country-specific information on the support available, see UK Export Finance’s country cover policy and indicators For more information on exporting to Angola, see our exporting guide.

3. Human Rights

Angola has ratified all eight fundamental conventions of the International Labour Organisation. Its 2010 constitutional revision means that there are modern labour and employment laws, including provision for the protection of employees’ rights (such as the right to join a trade union). In practice, however, the developing nature of Angola’s economy and the inconsistent application of the law have resulted in occasional disputes over payment of salaries and pensions.

Angola decriminalised same-sex relationships in the new Penal Code, approved in October 2020, which came into effect in February 2021. The new Code also prohibits discrimination based on sexual orientation.

Gender inequality persists in many parts of Angolan society. However, women are well represented in high-level government positions and in the National Assembly. The Inter Parliamentary Union’s 2023 Women in Politics Report places Angola at 34 out of 190 countries as 37.5% of ministers are women and at 51 out of 190 countries as 33.6% of parliamentarians are women. As of 2022, Angola has its first woman Vice President in Esperança Costa.

Media Freedom worsened in 2023 according to the World Press Freedom Index which ranked Angola at 125 out of 180 countries (down from 99th place in 2022). This is due to the state taking control of some private media companies in 2020 and to a crack-down on national and international reporting around the 2022 elections. Angola is ranked 148 out of 191 countries in the 2021 UN’s Human Development Index. In 2023, there were reports of excessive force and rape during the deportation of illegal migrants to DRC from Angola’s north-eastern Lunda Norte. There are still camps of refugees situated in Lunda Norte. Many rely on the support of international local organisations for food as they do not have the required documents to allow them to seek formal work.

Angola has experienced the worst drought in 40 years in the south and the Integrated Phase Classification (IPC) which describes the severity of food shortages said food insecurity in the Cunene, Huíla and Namibe provinces was among the worst in the world, affecting around 1.58 million people.

4. Bribery and corruption

Bribery and corruption are still prevalent throughout Angolan society, including within the civil service and police. However, from his inauguration onward, President João Lourenço has made the fight against corruption his top priority and improvements can already be seen – some resulting from close cooperation with UK authorities. The IMF’s regular dialogue with Angola, as well as the visits from commercial credit rating agencies since 2013, have had a positive impact. There have already been a number of high-profile court cases against prominent and senior figures which have resulted in some custodial sentences and the recovery of assets. More cases are in preparation, and action is being taken country-wide, not just in the capital.

Angola is a member of the Financial Action Task Force (FATF) and is undergoing a Mutual Evaluation assessment in 2023. The Angolan authorities have shown commitment to implementing FATF recommendations and to improving identified deficiencies.

Angola’s ranking in Transparency International’s Corruption Perception Index has been steadily improving year-on-year. It was ranked 116 out of 180 in 2022. Read the information provided on our Bribery and corruption page.

5. Terrorism threat

The threat of terrorism is low throughout Angola, although separatists in the northern Cabinda exclave have targeted foreign companies in the past, usually in the interior of the province. The government is alert to the risks of extremism and of illicit weapons flows increasing in the region. President Lourenço is an integral part of the African Union’s campaign ‘silencing the guns’. He was nominated to be their Champion for Peace and Reconciliation in 2022 due to his mediation role in the Great Lakes region.

Read the information provided on our Terrorism threat page.

Most international companies and organisations operating in Angola have strict security rules and regulations for their staff. There are many private security firms operating in Angola. Many of the private security operatives are armed. However, the quality of the security firms and the standard of training is varied.

Read the information provided on our Protective security advice page.

6. Intellectual Property

Although Angola is a member of the World Intellectual Property Organisation (WIPO), Angolan laws remain weak and dated in this area and are rarely enforced. IP infringement is widespread, especially in the distribution of pirated media such as CDs and DVDs. Counterfeit pharmaceuticals and alcoholic beverages are also a concern. Read the information provided on our Intellectual Property page.

7. Organised crime

Organised crime is limited in comparison to some other countries in the region. There is evidence of the illegal wildlife trade, drug smuggling, particularly from Brazil, and reports of cross-border human trafficking that may be linked to organised crime.

There is a high level of (mostly petty) crime in Luanda, some of which can involve arms. Muggings (particularly at ATMs) and occasionally armed robberies can occur in any area at any time of the day or night. We advise caution at all times and the avoidance of crowded areas due to sporadic civil unrest. For further information and updates, please refer to FCDO Travel Advice.

Read the information provided on our Organised Crime page.

8. Contacts

Contact the DBT team in Angola for more information.

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