Artigos

Boosting tourism in Angola

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1- Framework: the requirements and agents of tourism promotion in Angola

Angola is gradually seeking to diversify its economy, choosing tourism as one of the main priorities for structuring economic policy. As is well known, the reconstruction started from 2002 did not focus on tourism, but on the oil, mining and construction industry. Once this model was exhausted, diversification became the keyword for development.

Since it is conspicuous that Angola has an enormous tourist potential, the truth is its implementation implies the removal of sveral obstacles and the creation of adequate conditions. We refer to two essential axes to create these conditions: the first is the creation of favorable conditions for investment in the tourism sector, this implies the review of the investment law that has already taken place, the removal of barriers to market entry and the facilitation of bank credit for new projects.

The second axis is of an infrastructural nature and requires the creation of an adequate transport network, roads, planes and boats, as well as a climate of criminal security, in addition to the facilitation of tourist visas.

Figure 1: The 2 axes for the development of tourism potential

Furthermore, the growth of tourism cannot be solely dependent on the State, it is naturally responsible for the regulation, supervision and creation of infrastructure and conditions. However, the fundamental role belongs to the private business community, which must advance and establish partnerships to enter the international circuits. And, finally, it is also up to the provincial, municipal and communal leaders to encourage and leverage their resources.

State, businessmen and local leaders form the tripartite partnership that must come together to launch tourism in Angola.

In 2019, at the opening of the World Tourism Forum that took place in Luanda, the President of the Republic made it very clear what the executive wanted for the sector: within the framework of the diversification of the economy, tourism should play a role in promoting development and generating income and employment. For this to materialize, the government should invest in the short and medium term, in the expansion of hotel infrastructures and in the infrastructure of the tourist centers of Cabo Ledo, Calandula and the Transfrontier Project of Okavango Zambeze, with the purpose of increasing the offer and the options diversity of tourists and customers in general[1].

Recently, a possible crisis in tourism in Europe has been discussed, admitting that Greece, Italy, France, Spain and Portugal are affected by the sanctions on Russia resulting from the war in Ukraine (which, in relation, at least to Portugal, is doubtful, as the country was not dependent on Russian tourism), Egypt has not yet fully recovered from fear of  bomb attacks, Indonesia struggles to contain Muslim fundamentalism, India struggles with rising pollution levels, Kenya and Senegal could be invaded by Islamic agitation, favorite destinations like Turkey, Israel, Thailand and Dubai are somewhat saturated. This scenario is described in a somewhat emphatic way, however, it opens up opportunities for tourism in Angola, as it represents a certain verifiable trend.

The country has potential in tourism to attract tourists, as Cape Verde and Botswana did; it has paradisiacal beaches, desert and forests, rivers of great flow, mountains, exuberant fauna and flora, and, above all, a welcoming people and a rich and varied gastronomy.

2-Scenario of Angolan tourism

There is no developed tourism industry in Angola. The few areas that are developed took advantage of the country’s natural beauties, rivers, waterfalls and the 1,650 km of Atlantic coast. As the official brochures describe: “The humid tropical climate [of Angola] has created an exuberant flora and rich fauna spread over regions with forests, savannas, impressive mountains, rivers, beaches that seem to stretch without limits, waterfalls, oases and beautiful landscapes which seem to go on to infinity and are all immaculate and intact. An endless summer of warm afternoons bathed in warm breezes to contemplate adventure and discovery.”

Angola has an extreme natural beauty that reveals itself as a promising tourist destination. Mussulo Island and Cabo Ledo are examples of places with an immense capacity to attract tourists, as well as several areas of the provinces such as Namibe, Benguela, Malanje and Cuanza-Sul. The Calandula Waterfalls in Malanje are particularly impressive.

However, currently, most foreign travelers arriving in Angola are not tourists, but entrepreneurs, workers and consultants. This means that hotels are geared towards business and not tourism or leisure. As businesses have been through a serious crisis since 2015, that only now (2022) is truly emerging, that is to say that in recent years there has been a markedly low occupancy rate in hotels, which went from 84% in 2014 to 35% in 2017 and 25% in 2018. This drop in occupancy reflected the crisis that overshadowed the country, not the lack of interest in tourism. The drop in oil prices that has occurred since 2014 and until last year led to a decrease in economic activity in Angola, which resulted in fewer business travelers occupying hotels.

Those responsible recognize that there are currently major weaknesses in the tourism sector, namely “lack of concrete support and incentive measures, difficult access to places, potential resources and tourist attractions, lack of appreciation of tourist resources, lack of flexibility of the banking system to finance tourist projects, deficit in terms of hotel and tourist training establishments, excessive dependence on imports, due to the deficit in domestic production, lack of tourist culture, lack of greater openness in granting entry visas to the main tourist-issuing markets of the world and reduced purchasing power of Angolans[2]”.

However, these unsatisfactory numbers and facts do not represent any structural trend. Between 2009-2014 Angola registered strong growth in the hotel sector with revenues exceeding 45 billion kwanzas (100 million euros at the time exchange rate), creating around 223 thousand jobs. Thus, there is clear potential for the tourism business.

3-Touristic locations and potential markets

Angola has numerous tourist attractions, among which we can highlight the national parks of Kissama and Iona, Quedas de Calandula, Ruacaná, Mussulo, Miradouro da Lua or the Zambezi River.

It is possible to promote the development of hotels and tourist resorts aimed at vacationers in some of the areas specifically intended for sun, sea and sand tourism, such as Cabo Ledo, 120km from Luanda in the municipality of Quiçama, which has 2,000 hectares of enormous beauty and is a potential location for world surfing, once visa processes are facilitated.

Another alternative for nature tourism is Calandula, Malange, which has the most impressive waterfalls in Angola and is the second largest in Africa at 150 meters high and 401 meters wide. An area of ​​1,978 hectares of endless vegetation and waterfalls as far as the eye can see and which has an enormous potential for tourist investment: tourist accommodation, restaurants, entertainment, golf and casinos.

The idea of ​​a museum route also emerged. The initiative of this route is to awaken and increase the culture of visiting museums, in order to create a heritage identity. This route includes the Iron Palace, the National Museum of Military History (Fortaleza São Miguel), the National Museum of Natural History and the National Museum of Slavery, passing through several hotel units. This route should serve as a model for implementation in all provinces of the country.

The target markets for Angolan tourism should be Russia (after the peaceful resolution of the war) and China, which are now the countries from which more than 50% of international tourists come, Angola has everything it takes to absorb a substantial share of these markets. Furthermore, as mentioned above, it could absorb some European demand, especially in the area of ​​adventure and new ecological experiences.

4-Strategic axes and special tourism areas (STA)

As mentioned above, the strategy for tourism must be based on two axes: the promotion of investment and the creation of infrastructure.

We recognize that there is a new favorable climate for investment and also an effort, especially within the scope of the CPLP, to make the bureaucratic process of issuing tourist visas more flexible, that is, conditions are being developed for a new strategy for attracting tourists.

According to an Angolan official, the documents required for the licensing of tourist developments were reduced, from 11 documents previously required to three. The validity of permits was changed from three to five years, the process of decentralizing the permit issuance system is in progress. All these actions aim to improve the business environment in the tourism sector. Regarding visas, the same official points out that the process was already more difficult. He made it known that there have been significant advances, which need to be improved, to attract more tourists[3].

The same officials argue that in terms of infrastructure there are gaps that are easy to solve; Catumbela Airport (Benguela) may be equipped with mechanisms to receive direct international flights, transport is part of the investment that is up to the private sector, the Benguela Railway line passes hundreds of meters from the airport, connects to Zambia and to the Democratic Republic of Congo and goes to Tanzania on the Indian Ocean, Lobito has a large-capacity port, and the expansion itself is providing parallel investments in health, training, services, and the capacity to produce skilled and competitive labor.

At the government level, tourism is recognized as a strategic sector in the National Development Plan 2018-2022, as a guarantee of intensive labour, alongside agriculture, various industries and fisheries. The National Development Plan includes some specific actions, such as the improvement of communication with the Tourist Development Poles, the elaboration of projects for the construction and rehabilitation of hotel and tourist infrastructures, state and mixed infrastructures, the identification of priority development areas, with the aim of recovering and developing the entire heritage of the hotel and tourist network.

Another government official, who has since ceased his duties, underlined that in addition to Angola starting to reduce restrictions and bureaucracy, as part of the strategy to relaunch tourism and promote the attraction of investment to the sector, he wanted to draw attention for the country, with the collaboration of the international supermodel Maria Borges, who would help to promote the potential. The strategy would involve calling an international name, Maria Borges, to help promote the country’s culture, history and main tourist destinations[4].

With the new strategy for the promotion of tourism, Angola hopes to integrate the list of the main tourist destinations in Africa by 2025[5] .

***

However, it is not possible in the short term to create a complete national infrastructure for tourism. There must be pragmatism and realism in political approaches to promoting tourism in a country where tourism has been almost non-existent. It is in this sense that the best solution must be dual and with different deadlines.

In the medium term, a national tourism strategy should be developed. However, in the short term, there must be a focus on what we will call Special Tourism Areas (STA). The STAs would be five areas of the country in which the State in partnership with the private sector and local authorities would focus to create infrastructure and specific conditions for tourism. Areas with easy access, hotels, restaurants, guaranteed security and maybe free transit visas to visit these areas. Preferred areas chosen to test the STAs could be Malanje, a beach area with urban animation, a paradisiacal-style beach area, and a city with a lot of history or an area with ecological interest aimed at European tourists.

Figure 2: Special Tourism Areas

These areas would have privileged tax treatment and the elimination of visas should be considered for those who went there for up to 15 days. This proposal would imply the elimination of visas for foreign tourists from the target markets who travel to the STAs for a maximum period of 15 days in tourism. All they need to do is present a return flight ticket and proof of booking in tourist accommodation.

There would thus be the creation of pilot districts dedicated to tourism, small capsules of what could be global tourism in Angola in the future.

Conclusions

Tourism can be one of the areas of excellence in the ongoing diversification of the Angolan economy, as it is a sector where the country has enormous potential. The investment in tourism must be a tripartite work of the State, private business and local communities. Target markets will be Asia and Russia (after the Ukrainian War settlement), as well as eco-tourists or European adventurers.

For tourism to exist in Angola, investment conditions must be provided (which is ongoing) as well as adequate infrastructure in physical terms and easy to move around.

It is advisable to proceed in the short term with the creation of Special Tourism Areas that work as pilot experiences for tourism promotion. Areas that will bring together hotels, restaurants, local entertainment, security and easy access, and elimination of visas for tourism in the STAs. And then with the results of these STAs extend to the entire country.

[1] https://e-global.pt/noticias/lusofonia/angola/angola-joao-lourenco-aposta-em-turismo-para-diversificar-economia-do-pais/

[2] https://www.jornaldeangola.ao/ao/noticias/os-resultados-da-estrategia-para-o-turismo-ainda-sao-incipientes/ – interview with ANGOP by the general director of Infotur – 31-08-2021

[3] https://www.jornaldeangola.ao/ao/noticias/o-futuro-de-angola-repousa-no-turismo-e-nao-no-petroleo/

[4] https://pt.euronews.com/2021/06/28/as-apostas-de-angola-para-relancar-o-turismo

[5] https://www.jornaldeangola.ao/ao/noticias/o-futuro-de-angola-repousa-no-turismo-e-nao-no-petroleo/

Angola’s new strategic partners and Portugal’s position

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Angola’s new strategic partners: Spain and Turkey

Two recent intense diplomatic exchanges at the highest level point to the emergence of new strategic partnerships for Angola. In a previous report, we warned of realignments in Angola’s foreign policy[1]. Now, what happens is that this realignment continues, and at an intense pace. The President of the Republic João Lourenço is clearly giving a new dynamic to Angola’s foreign affairs, which is not seen to be affected by some internal unrest on the way to the 2022 electoral process.

The most recent examples of the President’s diplomatic activity are Spain and Turkey. The important thing in relations with these countries, is not whether or not there is a visit at the highest level, it is about having an intensity of visits by both parties and clear objectives designed. It can be said that from a mutual perspective, Spain and Turkey are becoming Angola’s strategic partners.

Let’s start with Spain. Last April, the prime minister of Spain, Pedro Sanchez, who barely left the country during the Covid-19 pandemic, visited Angola. The visit was seen as marking a new era in bilateral cooperation between the two countries and led to the signing of four memoranda on Agriculture and Fisheries, Transport, Industry and Trade. The agreement regarding the development of agribusiness was particularly relevant, in order to build an industry that transforms raw material into finished product in the future, relying on the experience of Spanish businessmen. As is well known, agriculture is one of the Angolan government’s areas of investment in relaunching and diversifying the economy[2]. Therefore, this agreement is dedicated to a fundamental vector of Angolan economic policy.

More recently, at the end of September 2021, the President of the Republic of Angola visited Spain where he was received by the King and the Prime Minister. On that visit, João Lourenço clearly stated that he was in Spain in search of a “strategic partnership” that went beyond the merely economic and business sphere[3]. In turn, the Spanish authorities consider Angola as a “priority country”[4].

Now it will be seen how these broad intentions will materialize in practice, but what is certain is that both countries are clearly betting on an increase in both economic and political relations and their declarations and goals seem to have a direction and meaning.

The same kind of intensified relationship is being established with Turkey. Last July, João Lourenço visited Turkey, where he was extremely well received. From then on, it was agreed that Turkish Airlines would fly twice a week from Turkey to Luanda. It was also announced that Turkey has opened a credit line on its Exxim Bank to boost bilateral economic relationship. This means that the Turkish financial system will finance Turkish businessmen to invest in Angola. As early as October 2021, Turkish President Erdogan visited Angola. This visit was surrounded by all the pomp and circumstance and expressed an excellent relationship between the two countries. Like Spain, Turkey has an aggressive strategy for Africa, where it wants to gain space for its economy and political influence. The agreements signed by Erdogan and João Lourenço were seven, namely, an agreement on mutual assistance in customs matters; a cooperation agreement in the field of agriculture; an agreement for cooperation in the field of industry; a joint declaration for the establishment of the joint economic and trade commission; a memorandum of understanding in the field of tourism and a cooperation protocol between the National Radio of Angola and the Radio and Television Corporation of Turkey[5].

The approach with Turkey, like that of Spain, has as an immediate and structuring objective “that [the Turks] bring above all know-how that allows us to quickly and efficiently diversify and increase our internal production of goods and services”, using the words of João Lourenço[6].

In these two challenges by João Lourenço there is an obvious determination, or rather two.

First, seek new sources of investment that support the fundamental diversification of the Angolan economy. This is extremely important, and the Turkish and Spanish economies are properly diverse to be able to correspond to the model intended by Angola.

The second aspect refers to the need Lourenço feels to detach Angola from an excessive relationship with China and Russia, without harassing them, but looking for new partners. The geopolitical weight of the Cold War and the subsequent implementation of the Chinese model in Africa, with which Angola is identified, weigh heavily in the evaluations of foreign ministries and investors. Thus, Angola is looking for new openings and a “detachment” from that previous brand, not least because Russia does not have the financial muscle to make large investments in Angola, and China is in the middle of an economic turmoil. As we already know, “the Chinese economy grew 4.9% in the third quarter of this year, the lowest rate in a year, reflecting not only the problems it is facing with the indebtedness of the real estate sector, but also the effects of the energy crisis.”[7] This means that China needs a lot of Angolan oil, but it will not have financial resources for large investments in Angola.

In fact, the relations between China and Angola and the need for a reassessment of the same, especially in terms of oil supply and the opacity of the arrangements, will have to be a theme for an autonomous report that we will produce in the near future.

Portugal’s position. The ongoing deberlinization

Having established that the importance of the intensification of Angola’s relations with Spain and Turkey is established, an obvious question arises: and Portugal?

Portugal has tried to be Angola’s partner par excellence, and for this it has accommodated itself, in the past, to the several impulses of Angolan governance.

Currently, there are good political relations between Angola and Portugal. Just recently, João Lourenço said: “I was fortunate that during my first term in office we were able to maintain a very high level of friendship and cooperation between our two countries.” He also added that “personal relationships also help. Therefore, over the years, we have been able to build that same relationship with President Marcelo Rebelo de Sousa and Prime Minister António Costa”.[8] There is no doubt that favorable relations are established between Angola and Portugal. It also helps that Portugal has three ties that are felt every day; historical ties, cultural ties, especially linguistic ties, and emotional ties.

However, despite the satisfaction expressed by the Angolan President regarding the good relations between the two countries, there are structural issues that cast shadows on the relationship and make Portugal’s position less relevant to Angola than in the past, generating some caution on the part of Angola in relation to excessive involvement with Portugal. Actually, there is a decline in the Portuguese position in Angola, vis-à-vis Spain or Turkey, or Germany, France or the United Kingdom. There is an ongoing de-Berlinization of Angola’s foreign policy. João Lourenço sees Portugal as an ally in the CPLP, but not as a gateway or platform to Europe. There, he wants to relate directly to each of the specific European countries. The old idea that pervaded in some European chancelleries that Angolan topics were specific to Portugal and should be dealt with from, or at least, with the Lisbon competition (which we call Berlinization), ended. Each of the European countries now deals with Angola without Portuguese intermediation and vice versa.

This fact results essentially from three factors. One of an economic nature, and two of a political nature.

In the first place, Angola seeks, in its foray around the world, countries with the potential and capital to invest. It is searching for capital to develop its economy. Now Portugal, jumping from crisis to crisis and having a clear lack of capital for its development, will have much less means to move to Angola. And in the famous Portuguese Recovery and Resilience Plan there is nothing specific for investment in Africa or Angola in particular. Consequently, with no provisions highlighted for Angola in the Portuguese Plan, it is clear that the African country will have to go looking for massive investments elsewhere.

However, we believe that this is not the main cause for the relative decline of the Portuguese position in Angolan foreign policy priorities. There are two other reasons, which are interlinked.

In this sense, there is na element that has caused the disquiet of the current Angolan leadership towards Portugal. This element entails in the fact that in the near past, Portugal constituted what the Financial Times of October 19th[9] described as the place where Angola’s rich (and corrupt) elite collected trophies in assets, a kind of playground for the President’s sons José Eduardo dos Santos and other members of the oligarchy. Now, the Angolan government, apparently, looks with some suspicion at Portugal because of this, specially considering the intervention that banks, lawyers, consultants and a whole myriad of Portuguese service providers had in the laundering and concealment of assets acquired with illicitly withdrawn money of Angola. There is a danger that all these entities are making efforts to undermine the famous fight against corruption launched by João Lourenço.

What happened during the years of inspiring growth in Angola, between 2004 and 2014, significantly, is that Portugal acted as a magnet for Angolans’ savings and income. The Angolan ruling elites, instead of investing the money in their country, went to invest it, or merely park it in Portugal, with disastrous consequences for Angola, which found itself without the necessary capital to make its growth sustainable. The reasoning that can be attributed to the Angolan government is that Portugal allowed the Angolan money obtained illicitly to be laundered in its economic and financial system with such depth that it is now very difficult to recover. Ana Gomes, wisely, always warned about this. In fact, if we look at the assets recovered by Angola, with great significance, there has not yet been public news that any of them came from Portugal. There was the 500 million dollars that came from England, but in Portugal, EFACEC was nationalized by the Portuguese government – and that’s okay from the Lisbon’s national interest point of view- but it was realized that Angola would not receive anything from there, as well as one can’t regard a clear path of receiving from other situations.

To this phenomenon is added a second that is presently noted. Lisbon is serving as a platform for the more or less concealed articulation of strong opposition attacks on the Angolan government. Whether through consultants, press or law firms. In this case, unlike possibly in the case of investments and possible money laundering, these activities will take place in accordance with the law and adequate protections of fundamental rights. However, it will create discomfort in the Angolan leadership, which will possibly see a link between the two phenomena, that is, between the fact that Portugal was a safe heaven for Angolan assets obtained illicitly in the past, and now it has become a local of opposition and conspiracy, above all, to the so-called fight against corruption. It is noticed that many of the movements take place in Portugal and its elites continue to help those who were dubbed by João Lourenço as “hornets”, either judicially or in the search for new places to hide their money.

In concrete terms, the episode of EFACEC nationalization combined with the recent judicial decision to “unfreeze” the accounts of Tchizé dos Santos in Portugal, and the generalization of an anti João Lourenço current in large spaces of the Portuguese media, although they constitute decisions or attitudes that are justified in political, legal or ethical terms in Portugal, they are events that reinforce some Angolan distrust of the Portuguese attitude, which can see the former colonial power in a kind of shadow play.

These situations, which have broadened in recent months, are causing some discomfort in Angola, which may consider Portugal as a kind of safe haven for activities that harm the country. Gradually, conspiracies from Portuguese territory abound, such as meetings and other events

It is precisely the reasons mentioned above that lead us to identify some attempt at political distance between the Angolan government and Portugal. There are no easy answers to these equations, although its enunciation has to be made for reflection by all those involved.

[1] CEDESA, 2021, https://www.cedesa.pt/2021/05/18/os-realinhamentos-da-politica-externa-de-angola/

[2] See report CEDESA, 2020, https://www.cedesa.pt/2020/06/15/plano-agro-pecuario-de-angola-diversificar-para-o-novo-petroleo-de-angola/

[3] Deutsche Welle, 2021, https://www.dw.com/pt-002/jo%C3%A3o-louren%C3%A7o-em-espanha-em-busca-de-parceria-estrat%C3%A9gica/a-59344760

[4] Idem note 3.

[5] Presidência da República de Angola, 2021, https://www.facebook.com/PresidedaRepublica

[6] Idem, note 5.

[7] Helena Garrido, 2021, https://observador.pt/opiniao/o-choque-energetico-e-o-orcamento-em-duodecimos/

[8] Observador, 2021, https://observador.pt/2021/10/22/pr-de-angola-ve-relacoes-de-amizade-e-cooperacao-com-portugal-em-nivel-bastante-alto/

[9] Financial Times, 2021, https://www.ft.com/content/4652e15a-f7ba-4d21-9788-41db251c5a76

The question of capital in Angola

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1- Introduction: IMF, sound economic policies and capital accumulation

Contrary to what some economic studies and forecasts currently carried out by some more or less unknown consultants, the current Angolan economic policy has solid foundations. This is demonstrated by the recent assessment by the International Monetary Fund regarding the agreement between the fund and Angola. The IMF administration is clear in declaring[1]: “The authorities [from Angola government] have supported the [economic] recovery through sound policies that aim to further stabilize the economy, create opportunities for inclusive growth and protect the most vulnerable in Angolan society.”

It would be difficult to have a better endorsement of government economic policy.

However, macroeconomic stabilization and the resumption of economic growth are different realities. There is need of a certain engine to ensure economic growth. It is known that the essential growth model was presented by Robert Solow (Nobel Prize for Economics in 1987), that explains that growth depends essentially on the accumulation of capital, with the increase in GDP resulting from the increase in the capital stock[2].

It is known that the latest Angolan GDP figures for the first quarter of 2021 are negative by 3.4%. So the question that now arises is: how to transform sound economic policies into capital accumulation and promote GDP growth?

2-Capital in the Angolan economy

The essential growth model of the Angolan economy, at least from 2021 onwards, was not a model based primarily on investment, but on consumption derived from imports and on the direct benefit of capital gains from the high price of oil. This meant that the investment that existed was induced by oil and not extended to the economy as a whole[3]. It should also be noted that a good part of the savings gains at that time was not transformed into domestic investment, having been transferred abroad from Angola. In a colloquial way, there was a sharp flight of capital from Angola to overseas countries, namely Portugal or off-shore tax havens[4].

It is public that this model went bankrupt as of 2014, and led to sharp years of recession after 2015. At the same time, it was found that the contribution of gross fixed capital formation (GFCF) to GDP began to decrease from that point on. year (2015). If we look at each year the FCF/GDP was respectively 28.21 %, 26.21 %, 23.24 %, 17.19%. The 2018 number (17.9%) is frightening and makes the discussion about the need to capitalize the Angolan economy more relevant.

Figure 1: Gross Fixed Capital Formation in relation to GDP

“The country has a capital deficit”[5] and this problem has to be resolved so that growth can occur. This aspect has to be one of the guides for future economic policy. A goal must be set to raise the GFCF/GDP rate to higher levels, possibly to the 25/26% that happened in 2007 or 2012, which ensure GDP growth levels (albeit based on oil) of 14% and 8%.  Now a new capitalization not only based on oil has to be carried out.

It’s easy to diagnose. Angola lacks capital and needs strong investment. The answers will be the most costly.

3- Increase capital in Angola

What to do to accumulate and increase capital in Angola?

Our answer is divided into two perspectives, the short-term and the medium-term. Let’s focus on the short term, then make a brief reference to the medium term, although it is clear that there is a continuum, as what is done now has repercussions over time.

The executive has already taken some measures, which we have reported in previous reports[6], such as the Private Investment Law (LIP)-Law no. 10/18, of June 26, which no longer requires partnerships with Angolan citizens or companies from Angolan capital and in its article 14, it guarantees that the State respects and protects the property right of private investors; Article 15 establishes that the Angolan State guarantees all private investors access to the Angolan courts for the defense of their interests, being guaranteed due legal process, protection and security. The range of possibilities for transferring dividends were also expanded. Moreover, in administrative terms, it should be noted that in 2018, all requests for the transfer of dividends above five million dollars (4.3 million euros) were granted to foreign companies operating in the country. And, most importantly, since 2020, the capital import from foreign investors who want to invest in the country in companies or projects in the private sector, as well as the export of income associated with these investments, have been exempted from licensing by the Angolan central bank.

However, this is still not enough, and foreign private investment will take a long time, either because a very turbulent electoral period is starting, or because there is a worldwide distraction with Covid-19. In addition, the executive has not yet communicated with all the worldwide amplification, the opening of Angola for business. Even so, it is essential that the executive maintain the political orientation of openness to foreign direct investment.

More needs to be done in the short term to increase investment in Angola and subsequent economic growth. Below is a list of suggestions.

• The initial suggestion is obvious and is based on strengthening public investment. It is essential that the government becomes an inductor of investment and that the capital gains arising from the rise in oil prices and possible apprehensions in the fight against corruption are applied in reproductive investments with short-term results.

The next two suggestions might be more innovative.

 Let us address the first of the most unorthodox suggestions. As mentioned, a good part of the savings obtained by Angolans in Angola was remitted abroad, decapitalizing the country. Now we have to reverse this.

• In this sense, the government should, in the first place, sell the dormant shares and assets or in which there is no very relevant strategic interest, which it has abroad. With the result of this sale, it would constitute an investment fund to be invested within Angola. Thus, the first heterodox proposal to increase the capital available in Angola is to sell what there is abroad that belongs to the State (directly or indirectly) and place it in the Angolan economy. Certainly, Sonangol’s position in Millennium BCP should be sold and transformed into investment capital in Angola, and possibly an indirect stake in Galp, if it is not possible to reach a strategic agreement with the Amorim family to better monetize the Angolan position.

• The second suggestion refers to fighting corruption. It is necessary to get out of a certain delay that entered into and boost the capital recovery.

Thus, the government should directly approach those it calls “hornets” and propose a negotiated solution to their situation. Either they deliver the assets that are abroad for investment in Angola, or they will face long prison terms. In relation to these assets, the method outlined above would be followed: Provided market prices were acceptable, everything would be sold and the capital returned to Angola for investment according to a formula agreed between both parties.

This “negotiation” would not be carried out by common means, but by a special force to be set up in Angola and would have short deadlines, not judicial deadlines.

There will have to be a radicalization in both directions in the fight against corruption. More effective punishment or forgiveness with repatriation. Unlike what happened in the previous repatriation law, there would be no waiting, but there would be a proactive attitude on the part of the executive.

By way of an illustration, the participation of Isabel dos Santos in NOS, that of General Kopelipa in the BIG bank and in several hotel developments, the apartments that the former figures have in Estoril, etc., could be sold. The result of these sales would return to Angola where it would be invested in terms to be agreed between the State and the former owners.

These listed measures could give some boost to the Angolan economy and thus promote economic growth immediately.

At the medium-term level, the essential thing is that there is no rampant corruption,  good communication infrastructures are created, an investor-friendly legal apparatus and fast, non-corrupt courts, an educated workforce (this does not mean having degree courses but the necessary skills) and reasonable taxes. In short, an inviting political and social climate for investment.

[1] IMF, Fifth review under the extended arrangement under the extended fund facility and request for modifications of performance criteria— press release; staff report, and statement by the executive director for Angola, June 2021, available in  https://www.imf.org/en/Publications/CR/Issues/2021/06/30/Angola-Fifth-Review-Under-the-Extended-Arrangement-Under-the-Extended-Fund-Facility-and-461318

[2] Cfr. Recent reassessment and description in Philippe Aghion, Céline Antonin e Simon Bunel (2021), The Power of Creative Destruction

[3] Cfr. Rui Verde (2021), Angola at the Crossroads. Between Kleptocracy and Development

[4] Cfr. For example: Isabel Costa Bordalo, Angola com 60 mil milhões USD é terceiro em África na fuga de capitais,  https://www.expansao.co.ao/angola/interior/angola-com-60-mil-milhoes-usd-e-terceiro-em-africa-na-fuga-de-capitais-94979.html

[5] Jonuel Gonçalves (2021), Angola: Não é a Covid que está a provocar a crise económica, https://www.dw.com/pt-002/angola-n%C3%A3o-%C3%A9-a-covid-que-est%C3%A1-a-provocar-a-crise-econ%C3%B3mica/a-58859385

[6] CEDESA, (2020), A nova atractividade para o investimento internacional em Angola https://www.cedesa.pt/2020/03/09/a-nova-atractividade-para-o-investimento-internacional-em-angola/