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Financial stability underpins business ecosystem

Article - April 7, 2014
The financial sector has helped the country become a key player amongst African economies and now it is looking at a range of new projects to cement its position as a major continental force
ANGOLA FINANCE
Financial stability has been a key driver behind Angola’s recent growth but it is now seeking to expand with a series of governance projects and funds designed to empower the nation’s business communities and wider population.
 
At the heart of the country’s future financial success is Angola’s Capital Markets Commission (CMC), which aims to create an efficient, transparent and modern trading environment. The CMC is headed up by former finance minister Eduardo Severim de Morais and Archer Mangueira, who oversee all aspects of the organisation’s operations, including offering training to investors and educating Angolans about how various financial instruments work.
 
One of the CMC’s major targets is the creation of the Luanda Stock Exchange, which is expected to start trading in late 2016/2017. Ahead of the exchange’s launch, the CMC is currently developing a secondary debt market in securities, which will start operating later in 2014, followed by a private corporate debt market.
 
Both Mr Mangueira and Mr de Morais are set to play key roles in Angola’s financial future, with the CMC creating “the institutional and regulative environment” to enable business to be done, as well as developing accessible capital flows that will enable Angola’s economy to bloom further.
 
As Mr de Morais explains, the country has now created a steady macroeconomic environment, with stability of prices and exchange rates, and investment in infrastructure. Those developments have enabled Angola to cut its poverty indices from 60% in 2002 to 35% in 2013.
 
Alongside this vision of an economically dependent future has been the creation of a sovereign wealth fund designed to ensure Angola has the means to deal with its wide-ranging industrial and social needs. The Fundo Soberano de Angola (FSDEA) was established in 2008 and is used to generate financial returns that are then ploughed back into services that benefit Angolans, including their economy and industries. Capital preservation is a key concern for the Fundo Soberano but investing in infrastructure is also vital. 
 
José Filomeno dos Santos, Chairman of FSDEA, adds that while the fund invests in companies it is also increasingly looking to improve Angola’s workforce skillset to ensure more growth. 
 
“There is still a need to empower people in order for them to become self sufficient, for them to contribute to their own environments and improve their socio-economic situations,” he says. 
 
President dos Santos also wants to see Angola, and all countries across Africa, investing in their populations to avoid becoming simple “extraction” economies and instead move into “more value-added activities.” Such a transition can only be made with substantial investment however, as well as an efficient and trustworthy financial system, which have been the founding factors behind the establishment of the newly created Angolan Centre of Corporate Governance (CCGA).

Its Chairman, Carlos Feijo, is one of Angola’s best known lawyers. He has been developing the subject of corporate governance to drive trust amongst the country’s international investors and has worked closely with Angola’s Agencia Nacional de Investimento Privado (ANIP), which oversees the interests of private investors.
 
Mr Feijo says the CCGA’s creation is another step for Angola’s “business ecosystem” and will ensure the longevity of companies, and promote the African nation on the global stage as a credible place to do business. “It will take time to achieve the desired results, but success begins with the awareness that we are in a time of change and that we can take advantage of the opportunity that change presents,” he says. 

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