Angola’s Privatization Success: Over $1 Billion Raised Since 2019

Angola’s privatization efforts have yielded significant financial gains for the government since 2019.

The Privatization Programme (Propriv) has successfully raised 567 billion kwanzas (approximately $1.11 billion) through the sale of 96 (109) state-owned assets and companies.

The privatization initiative was launched in 2019 as part of a broader economic reform agenda under President João Lourenço’s administration.

The goal was to diversify Angola‘s economy away from its heavy reliance on oil and gas while creating a more inclusive, market-driven economy with an emphasis on private sector development.

Scope and Progress of Privatization

The Propriv program initially aimed to privatize 195 state-owned companies between 2019 and 2022, with 32 of them considered major national companies.

By the end of this first phase, 96 companies were successfully privatized, raising $1.13 billion through various methods, including public tenders, auctions, and initial public offerings (IPOs).

In May 2023, the government expanded the program, adding 73 additional assets and companies for privatization by 2026. This second phase includes plans to privatize significant entities such as:

• ENSA – Seguros de Angola (insurance company)
• Unitel and TV Cabo (telecommunications companies)
• Angola Development Bank
• TAAG (national airline)
• Aldeia Nova (an agro-industrial company)
• Endiama (diamond firm)
• Sonangol (National Oil Company)

Economic Impact and Job Creation

The privatization efforts have had a positive impact on employment. The program has secured 2,747 jobs, of which 1,462 are new positions and 1,285 are previously existing roles.

International collaboration and investor confidence

Angola is carrying out its privatization program with support from the International Finance Corporation, a global development institution. This collaboration ensures quality certification and aims to reassure foreign investors.

Challenges and Future Outlook

While the privatization program has shown success, challenges remain. The state-owned enterprise sector’s financial performance was mixed in 2022, with about half of the SOEs registering losses.

The International Monetary Fund (IMF) has recommended accelerating the planned SOE privatizations to address these issues.

The government aims to finalize the privatization of 31 assets by Q4 2023 and is working on privatizing 11 Sonangol processes, with plans to exit the company by 2027.

Additionally, seven assets in the Luanda-Bengo Special Economic Zone are slated for privatization.

In conclusion, Angola’s privatization efforts since 2019 have generated significant revenue for the government.

These efforts are part of a broader strategy to diversify the economy, attract foreign investment, and promote private sector growth.

While challenges persist, the program’s expansion and continued implementation suggest a commitment to ongoing economic reforms in the country.