Angola: Investing in Angola
According to UNCTAD’s World Investment Report 2023, FDI flows to Angola remained negative for the fifth consecutive year in 2022 (-USD 6.1 billion) as companies in the oil sector continued to repay loans. Similarly, the stock of FDI in the country decreased significantly to USD 14.7 billion from USD 20.8 billion in 2021, now representing around 12.1% of its GDP, a share that halved over the last five years. The petroleum sector remains the main destination for FDI flows. Most FDI in Angola comes from the Netherlands, France, China, Portugal, and Brazil (IMF). The vast majority of foreign investment is directed towards the region of the capital Luanda (Angola’s Private Investment and Export Promotion Agency – AIPEX).
Rich in hydrocarbons, minerals, fisheries, and agricultural land, Angola also has significant hydroelectric potential. The government is striving to improve the business climate and has adopted favorable legislation in recent years, including a new Private Investment Law reducing the minimum capital requirement, facilitating capital repatriation, and eliminating the requirement that local investors have a 35% stake; a Competition Law; a Privatization Law; and a law allowing the creation of free trade zones. A single contact mechanism enables investors to obtain the necessary permits in a simplified manner. 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. Although known for its challenging business environment, Angola is endeavoring to enhance its investment climate and make strides in anti-corruption measures, democracy, governance, and human rights. Nevertheless, a sluggish and non-transparent judicial system poses a deterrent to investment and occasionally hampers contract enforcement efficiency. Likewise, the perception and occurrence of corruption continue to concern investors, especially outside the extractive industries. On October 9, 2023, the Council approved the signing of the Sustainable Investment Facilitation Agreement (SIFA) between the European Union and Angola. This agreement aims to streamline the process of attracting and expanding investments while incorporating environmental and labor rights commitments into the EU-Angola relationship. Angola ranks last among the 132 economies on the Global Innovation Index 2023 and 118th out of 177 countries on the 2023 Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | -1,866 | -4,355 | -6,142 |
FDI Stock (million USD) | 21,595 | 20,861 | 14,719 |
Number of Greenfield Investments* | 17 | 9 | 5 |
Value of Greenfield Investments (million USD) | 3,437 | 2,594 | 359 |
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:
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: November 2024