Angola: Investing in Angola
According to UNCTAD’s World Investment Report 2021, Angola reported net FDI inflows of USD -1.9 billion in 2020, compared to USD -4.1 billion in 2019. This is because capital repatriation by multinational oil and gas companies has slowed down. The stock of FDI in the country decreased significantly to USD 16.8 billion in 2020 from USD 32.4 billion in 2019.According to UNCTAD’ Investment Trends Monitor, global FDI flows rebounded strongly in 2021, but FDI flows to African countries (excluding South Africa) rose only moderately. The petroleum sector remains the main destination for FDI flows. Most of FDI in Angola comes from China, Portugal, the USA, France and the Netherlands. Recently, trading company Toyota Tsusho and export credit agency, Japan Bank for International Cooperation (JBIC) signed a deal to invest USD 650 million in the Namibe Bay project, the first Japanese private sector’s investment in Angola.
Rich in hydrocarbons, minerals, fisheries and agricultural land, Angola also has significant hydroelectric potential. The government is trying to improve the business climate. A new private investment law was approved in June 2018, which reduces the minimum capital requirement, facilitates repatriating capital, and eliminates the requirement that local investors have a 35% stake. Competition law was also enacted in May 2018 (and an organization in charge of its implementation created in 2019) and a privatization law was adopted in 2019. In 2020, the government of Angola established a single contact mechanism for investors to obtain the necessary permits in a simplified manner. It also adopted a law allowing the creation of free trade zones with incentives and benefits. The National Agency for Investment Promotion and Export (APIEX) aims to stimulate economic growth, diversify the economy, and expand private sector participation in Angola's economy. The country lost four places in the World Bank's Doing Business 2020 annual business climate report, ranking 177th out of 190 countries. Angola also occupies 136th place out of 180 in the Corruption perception index of the organization Transparency International, in continuous progress over the past years. In addition to its vulnerability due to dependence on oil revenues, Angola suffers from high levels of bureaucracy and an underdeveloped financial system, as well as widespread corruption, poor infrastructure, ineffective ports, abundant but unskilled labour and high costs on the ground for businesses.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | -4,098 | -1,866 | -4,150 |
FDI Stock (million USD) | 19,183 | 17,316 | 13,166 |
Number of Greenfield Investments* | 21 | 17 | 9 |
Value of Greenfield Investments (million USD) | 2,205 | 3,406 | 640 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Angola | Sub-Saharan Africa | United States | Germany |
Index of Transaction Transparency* | 4.0 | 5.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 6.0 | 3.5 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 6.0 | 5.5 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
The main assets of Angola are:
Among the factors that are detrimental to foreign investment are:
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Latest Update: January 2023