Investors remain cautious after the more than 50% drop in the oil price and recent credit rating downgrades in Angola, but recent signs of price stability and quick government action to manage the situation are expected to encourage development opportunities in the future.
Oil export revenue accounts for close to 98% of total export revenue in Angola, which is the second-largest oil producer in sub-Saharan Africa behind Nigeria.
“The government is reducing investment plans for this year and there is some reduction in terms of government spending. This is affecting the whole country in terms of economic activity,” says Luis Teles, Executive Head Corporate and Investment Banking, Standard Bank Angola.
One of the solutions to bringing about stability to the market is coming from the government and banks themselves, which are acting quickly to find new avenues of funding. The government is already working with major banks like Standard Bank Group to ensure enough dollars can be provided to help specific industries, like the food and oil industries.
Standard Bank Group hopes that by using its experience and track record in the country and working with authorities to help improve access to capital by introducing new products, that it will allow clients to cover their shortfalls.
Mr Teles says significant development opportunities exist, including in the downstream sector but it is all about balancing timing.
“This could be a good time to invest. The country is keen to attract foreign direct investment and is making it easier and faster to come in. Investors can then take time to find a local partner and invest in their structures without feeling pressure to be profitable immediately. Of course, when the oil price increases, the growth potential will arise quickly again,” said Mr Teles.Back to all news
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