Don’t dismiss Angola’s great sell-off

Luanda, Angola

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Angola’s government has appointed a new board for state-owned telecommunications firm Angola Telecom to lead the planned privatisation of the company.

The loss-making utility ($90 million in 2018) is part of a sprawling privatisation plan being rolled out under president João Lourenço, which aims to spin off 195 state companies by 2022.

This includes stakes in the national airline TAAG, diamond company Endiama, state oil firm Sonangol, and Banco Angolano de Investimentos, the country’s biggest lender. Most (178) are to be sold by public tender, with plans for 17 IPOs as Angola prepares to launch a domestic exchange.

The aim is to drive much-needed diversification, boost private sector development, and attract foreign investment.

It’s ambitious, especially given Angola’s tendency towards snail’s pace policy making, but the sell-off should not be dismissed.

Since taking office in 2017 president João Lourenço has pushed through unexpected and sweeping economic reform in Africa’s second-biggest oil producer, hoping to distance himself from the cronyism of predecessor José Eduardo dos Santos, in power for 38 years.

The shift is welcome, and necessary.

Angola oil-dependent economy has stagnated since the commodity slump, with growth and public expenditure plummet in recent years, while debt has soared.

We’ll see how it plays out, but privatisation could play an important part in reversing this trajectory.

This report reflects the views of the author alone, not those of How we made it in Africa.


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