Wednesday, 11 Dec 2013
Overseas Business Risk - Angola
Angola’s economy continues to rise and has for the past couple of years been one of the world’s leading economies. GDP rose almost 8% in real terms in 2012 and the country has adhered to one of the IMF’s recommendations of increasing fiscal transparency. Spending controls have been tightened to stop Ministries signing contracts without having the necessary funds and thus worsening the country’s debt bills. The National Bank of Angola (BNA) has over the past year laid down laws making it illegal to trade in any currency other than the Kwanza.
The country is sub Saharan Africa’s second biggest oil producer and continues to be heavily reliant on the commodity. It desperately needs to diversity and currently it’s investment in both telecommunications and breweries are leading the way, with both among the most lucrative in the continent.
Government and business are inextricably linked in Angola. Political interference is reportedly prevalent in many areas of the business environment. The Government has signaled its intention to address this, and the push towards privatisation of some of the larger state-owned business should help to curtail this interference
The country has witnessed considerable political stability since the end of the war in 2002. Peaceful general elections were held in August 2012 (only the second time Angolans have been to the polls), the ruling MPLA retained power, albeit with a slightly reduced majority, and there are no major indicators of instability in the foreseeable future. However street protests are becoming more common with some reports of Human Rights violations. The common complaint is the perceived corruption among business and government elites and widespread poverty despite the immense oil wealth.
Angola’s recent constitutional revision means that it has modern labour and employment laws including provision for the protection of employees’ rights (including the right to join a trade union). In practice, the developing nature of Angola’s economy and the inconsistent application of the law has resulted in disputes over payment of salaries, forcible resettlement and unregulated pollution, and reprisals have been known to occur as a result of complaints and strikes. Angola has ratified 8 of the 8 fundamental conventions of the International Labour Organisation.
There are specific concerns which have been raised by opposition parties and international and national civil society and non-governmental organisations over alleged human rights abuses particularly in Lunda Sul, Lunda Norte and the enclave of Cabinda. There are continued reports of forced evictions from homes in slum areas and land grabs in some provinces in Angola to make way for infrastructure projects. There are more frequent reports of the right to protest being undermined. There have been concerns raised around the Freedom of Expression in Angola and self regulation occurs.
The UK Government is committed to promoting respect for human rights amongst UK companies operating anywhere overseas. We stand ready to help British firms with advice on their political and reputational risk management.
Bribery and Corruption
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
In 2013, Angola was ranked 153 out of 177 in the Transparency International’s corruption perception index. Bribery and corruption are prevalent throughout society, particularly within the civil service and police. However, President dos Santos has declared a zero-tolerance approach and a number of important pieces of legislation designed to address the problems have been passed. The dialogue that the IMF now has with Angola in connection with its Stand-By Arrangement, as well as the regular visits from commercial credit rating agencies that began last year with Angola’s first rating, have also had a positive impact. There have been a number of high-profile court cases against senior officials which have resulted in some custodial sentences. A round of high profile dismissals recently show that the executive is working towards sending out the right message.
The threat of terrorism is low throughout Angola, although separatists in Cabinda have in the past targeted foreign companies in, usually, the interior of the province.
Protective Security Advice
Most international companies and organisations operating in Angola have strict security rules and regulations for their staff. They should be read in conjunction with the advice in these pages.
There is some crime in Luanda. Muggings (particularly the theft of mobile phones) and occasionally armed robberies, can occur in any area at any time of the day or night. We do advise caution and common sense when out and about. For further information and updates please refer to FCO Travel Advice.
Angolan laws are weak in this area and are almost never enforced.
Organised crime appears to be limited however there are signs that it is on the rise. There is evidence of drug smuggling and reports of human trafficking that could well be linked to organised crime. Recently two high profile Angolan individuals were registered on Interpol’s list for Human Trafficking.