Investment Climate Statement 2012
Angola: Investment Climate Statement for 2012
Openness to, and Restrictions Upon, Foreign Investment
Angola offers both high returns and great risks to investors and exporters. The oil and diamond industries and intensive infrastructure rebuilding following the end of civil war in 2002 create business opportunities, and future opportunities may develop in new areas such as agriculture. From 2004 to 2008, the Angolan economy had double digit growth rates, but the global financial crisis slowed growth to the low single digits from 2009-2011. The IMF forecasts an increase to 10.8 percent growth in 2012. The business environment remains one of the most difficult in the world. Investors must factor in pervasive corruption, an underdeveloped financial system, poor infrastructure and extremely high on-the-ground costs. Surface transportation inside the country is slow and expensive, while bureaucracy and port inefficiencies complicate imports and raise costs.
A new private investment law, passed in May 2011, altered the benefits and incentives available for investors. The minimum size requirement to qualify for incentives was increased from $100,000 to $1 million under the new law. Investors must enter into an investment contract with the Angolan state, represented by ANIP, the National Agency for Private Investment, which will establish the conditions for the investments as well as the incentives granted. The incentives and benefits, which include repatriation of funds for foreign investments, tax deductions, and exemption from certain taxes and duties, will be negotiated with ANIP and other ministries of the Angolan government on a case-by-case basis. In determining whether to grant incentives, consideration will be given to the economic and social impact of the investment according to the economic development strategy set by the Angolan executive. In addition to the process described above, investments with a value between $10 million and $50 million must be approved by the council of ministers, and investments above $50 million require the approval of an ad-hoc Presidential committee. By law, the council of ministers has 30 days to review an application, although in practice decisions by the Council of Ministers are often subject to lengthy delays.
Angola’s private investment law expressly prohibits private investment in the areas of defense, internal public order, and state security; in banking activities relating to the operations of the Central Bank and the Mint; in the administration of ports and airports; and in other areas where the law gives the state exclusive responsibility. Investment in the petroleum, diamond, and financial sectors is governed by sector-specific legislation.
In November 2011, the government passed a new law requiring oil companies to conduct a much greater share of their financial transactions through the Angolan banking system. The new law will be implemented in phases. Under the first phase, which will apply when the law becomes effective in early 2012, oil companies will be required to pay their taxes owed to the Angolan treasury through a local bank. Under the final phase, oil companies operating in Angola must use local banks to make all payments, including payments to suppliers and contractors located outside of Angola.
Obtaining the proper permits and business licenses to operate in Angola can be time-consuming. The World Bank Doing Business in 2012 report identified Angola as one of the most time-consuming countries surveyed for establishing a business (ranked 129 out of 183 in the survey). Launching a business typically requires 184 days, compared with a regional average of 80 days. The government has established the “Guichet Único,” or one-stop shop, under the Ministry of Justice, bringing together representatives of various ministries in one place, in an effort to simplify and speed up company registration time. However, the Ministry of Justice lacks authority over the other government ministries and the process remains slow. With the assistance of advisors from the Portuguese Ministry of Justice, the Angolan Ministry of Justice is in the process of reorganizing the Guichet to increase its efficiency.
While no formal discrimination against foreign investment exists, Angolan or other companies familiar with the bureaucratic and legal complexities of the business environment hold an advantage over newcomers. The Promotion of Angolan Private Entrepreneurs Law gives Angolan-owned companies preferential treatment in tendering for government contracts for goods, services and public works.
Measure Year Index/Ranking
TI Corruption Index 2011 68 of 183
Heritage Economic Freedom 2011 161 of 183
World Bank Doing Business 2012 172 of 183
MCC Government Effectiveness FY 2012 -0.66 (14%)
MCC Rule of Law FY 2012 -0.77 (7%)
MCC Control of Corruption FY 2012 -0.85 (3%)
MCC Fiscal Policy FY 2012 3.9 (92%)
MCC Trade Policy FY 2012 65.2 (16%)
MCC Regulatory Quality FY 2012 -0.50 (21%)
MCC Business Start Up FY 2012 0.844 (7%)
MCC Land Rights Access FY 2012 0.499 (14%)
MCC Natural Resource Mgmt FY 2012 60.08 (8%)
Conversion and Transfer Policies
Economic and financial reform measures in recent years have improved local access to foreign exchange and facilitated remittance and transfer of funds. However, during the recent global financial crisis, when Angola’s oil revenues declined by over 60 percent, the government sharply reduced the amount of U.S. dollars auctioned off to the commercial banking system. The investment law passed in May 2011 guarantees the repatriation of profits for officially approved foreign investments, and investors can remit funds through local commercial banks. However, under a separate law (Central Bank Order 4/2003), the Central Bank (Banco Nacional de Angola, or BNA) must authorize the repatriation of profits and dividends exceeding $300,000. In addition, the Central Bank can temporarily suspend repatriation of dividends or require that repatriation take place in installments if immediate repatriation would have an adverse effect on the country's balance of payments. In the aftermath of its 2009 temporary suspension of wire transfers, the BNA is requiring much more detailed information from the transferring entity, including copies of employment contracts for any individuals paid off-shore with U.S. dollars. These new documentation requirements are expected to be permanent and have significantly increased the BNA’s approval time for transfers.
Expropriation and Compensation
The government of Angola is unlikely to expropriate the assets of foreign investors directly. In 2009 and 2010, however, the government fell far behind in payments to foreign companies working on government contracts, eventually running up arrears totaling at least 6.8 billion dollars. Repayment of these arrears began in July 2010, and they have been largely though not entirely cleared by the end of 2011.
Changes in legislation and enforcement of existing laws pose some risk of reducing company profits. This is especially true in the petroleum sector, which has been subject to revised local content regulations and will be impacted by the new foreign exchange law expected to come into effect in early 2012. The legislative process is generally secretive and closed to public review, though the government increasingly consults with major companies and industries on the drafting of legislation that will affect them.
Angola's legal and judicial system lacks capacity and is inefficient. Legal fees are high, and most businesses avoid taking commercial disputes to court. The World Bank’s Doing Business in 2012 survey ranks Angola at 181 out of 183 on contract enforcement, and estimates that commercial contract enforcement, measured by time elapsed between filing a complaint and receiving restitution, takes an average of 1,011 days, at an average cost of 44.4 percent of the claim. The Voluntary Arbitration Law provides a general legal framework for non-judicial arbitration of disputes, except for cases expressly excluded by the law.
In 2008, the Attorney General ruled that Angola’s specialized tax courts were unconstitutional. This effectively left businesses with no legal recourse to dispute taxes levied by the Ministry of Finance, as the general courts consistently rule that they have no authority to hear tax dispute cases and refer all cases back to the Ministry of Finance for resolution.
Angola is not a signatory to the United Nations New York Convention, the World Bank’s International Center for Settlement of Investment Disputes (ICSID), or the United Nations Convention on the International Sale of Goods (CISG). Angola is a member of the Multilateral Investment Guarantee Agency (MIGA), which provides dispute settlement assistance. Past MIGA efforts to resolve foreign investment disputes have proven successful, but no cases involving U.S. companies were referred to MIGA in 2010.
Performance Requirements and Incentives
Angola's investment law gives foreign and domestic investors equal access to investment incentives. Incentives for such high-priority sectors as agriculture, manufacturing, energy, water and housing include exemption from industrial and capital gains taxes for up to 10 years and from customs duties for up to 6 years. Many foreign companies now operating in Angola enjoy some form of tax or duty waiver. Companies need to apply for such incentives when submitting an investment application to ANIP.
The government encourages "Angolanization" of companies’ work force and urges use of Angolan suppliers of goods and services. Decrees 5/95 and 6/01 limit expatriate staffing of local companies set up in Angola by national or foreign investors to 30 percent of the workforce and require Angolan and expatriate staff with the same jobs and responsibilities to receive the same salaries and social benefits. A 2008 decree requires oil companies to first seek Angolan employees to fill any vacant position prior to seeking expatriate appointment, which must first be authorized by the Ministry of Petroleum. International oil companies are working with the government on a new local-content initiative that will establish more explicit sourcing requirements for the petroleum sector. Oil service companies may meet these requirements by partnering with local Angolan firms, hiring more Angolan employees, or substituting local products for imports. Foreign investors can set up fully-owned subsidiaries in many sectors and frequently are encouraged, but not required, to take on local partners. In recent years, the government has enforced Decree 5/95 more strictly. Expatriate employees typically receive no more than three renewals to their one-year work visas, for a total of four years in country. Approval for the fourth year is contingent upon the company's identifying the Angolan employee who will take over the position after the expatriate leaves.
In the oil and diamond sectors, contracts with the government spell out the commitments companies make to invest in infrastructure and social services to benefit local communities, such as building schools, equipping hospitals, or funding microcredit programs. The government also encourages downstream investments in facilities such as refineries and diamond-processing plants.
The Angolan government requires an Environmental Impact Study for investments in petroleum, mining, road construction, or power stations. The Ministry of Environment must approve all Environmental Impact Studies before projects can be licensed.
Right to Private Ownership and Establishment
Foreign and domestic private entities have the right to establish, acquire, and dispose of interests in business enterprises. Public enterprises hold some practical advantages in access to markets and credit. Under the new constitution, which took effect in February 2010, all non-urban and some urban land is declared to be under state ownership, but can be leased to private entities. Oil and diamond production and exploration rights are granted for limited periods of time and only as partnerships between private companies and the resource owners, Sonangol and Endiama, respectively. Recent changes to the mining code have allowed for the possibility of a single contract for exploration, mining, and commercialization of diamonds, processes that were once governed by separate contracts. Oil exploration concessions normally last for ten years. The government allows and encourages public-private partnerships and participation of private investors in public utilities such as electricity and water. Private companies have concessions to operate hydroelectric dams and shipping terminals in the port of Luanda.
Protection of Property Rights
Angolan law recognizes the protection of intellectual property rights. Angola’s National Assembly adopted the Paris Convention for the Protection of Industrial Intellectual Property in August 2005, incorporating the 1979 text and the patent cooperation treaty concluded in 1970 and amended in 1979 and 1984. The Ministry of Industry administers intellectual property rights for trademarks, patents and designs under Industrial Property Law 3/92. The Ministry of Culture regulates authorship, literary and artistic rights under Copyright Law 4/90. However, no court case involving U.S. intellectual property has ever tested the strength of these laws. Angola is a member of the World Intellectual Property Organization (WIPO) and follows international patent classifications of patents, products and services to identify and codify requests for patents and trademark registration.
Angola’s Law on Land and Urban Planning affirms that all land ultimately belongs to the State, but permits most urban and some non-urban land to become effectively privately owned through long-term renewable leases from the Angolan government. Registering parcels of land over 10,000 hectares must be approved by the Council of Ministers. Registering property takes 6 months on average, according to the World Bank’s “Doing Business in 2012” survey, with fees averaging 3.2 percent of property value. Owners must also wait five years after purchase before selling land. Implementing regulations, when written, are expected to set out guidelines defining different forms of land occupation, including commercial use, traditional communal use, leasing and private homes.
Transparency of Regulatory System
The regulatory system has been complex, vague, and inconsistently enforced. In many sectors, no effective regulatory system exists, due to lack of capacity. The Angolan Communications Institute (INACOM) sets prices for telecommunications services and is the regulatory authority for the telecommunications sector. Revised energy-sector licensing regulations have improved legal protection for investors to attract more private investment in electrical infrastructure, such as dams, power plants and distribution grids.
Efficient Capital Markets and Portfolio Investment
Angola’s financial sector, though still underdeveloped, has grown rapidly and key indicators have improved in recent years. As of December 2010, the latest figures available, total customer deposits with the Angolan commercial banks stood at AKZ 2,623 billion, an increase of 14 percent over 2009. Most banks focus their operations on such short-term commission-related activities as currency trading and trade finance. Foreign investors do not normally access credit locally, and local investors either self-finance or seek financing from non-Angolan banks and investment funds. Subsidized government loan programs to promote economic development are available only to majority-owned Angolan companies and on a very selective basis.
In the past, triple-digit inflation resulted in a high level of dollarization in the economy and banking system, with the majority of banking assets held in dollars. Since the end of the civil war in 2002, the Central Bank has devoted considerable effort to rebuilding trust in the kwanza, bringing inflation down to 15% in 2010. The mandatory reserve requirement for non-government deposits in kwanzas is 20 percent, and in foreign currency is 15 percent. The reserve requirement for government deposits is 100 percent, a measure that seriously limits lending by state-owned banks.
The number of private banks has been growing since the end of the civil war, transforming a sector previously dominated by state-owned banks. As of late 2011 Angola had 23 commercial banks, only three of which are state-owned. While every provincial capital has at least three bank branches, only 14 percent of the population uses banks, and few businesses even apply for loans. In 2010, credit to the private sector grew by 16 percent compared to 2009.
Banks in Angola extend little unsecured credit, requiring instead significant amounts of collateral in the form of property or dollar deposits from the borrower. The government’s failure to honor contracts with many private businesses through much of 2009 and 2010 strained the commercial banking system, as government spending drives the non-petroleum economy, resulting in an increase of non-performing loans on bank balance sheets. Commercial credit in Angola remains tight. Unclear land titles and ill-defined property rights may, in some instances, complicate and lengthen the process of applying for a mortgage.
Banks’ lending in 2010 amounted to AKZ 2,571 billion, from which 45 percent in Kwanzas and 55 percent in dollars. Banks’ abilities to know their customers and secure collateral are limited because State-owned property cannot be offered as collateral, the judicial system is weak, credit histories cannot be tracked, and few houses have street addresses. Banks profit largely from transactions, short-term trade financing, and investments in high-interest government bonds, though increasingly also from loans, especially to the construction sector. In the past, State and State-affiliated companies enjoyed privileged access to loans, often at concessionary rates, leading to several bank failures.
The Central Bank has developed a market for short-term bonds, called Títulos do Banco Central, and long-term bonds, called Obrigações do Tesouro. Most of these bonds are bought and held by local Angolan banks. The Obrigações have maturities ranging from 1 to 7.5 years, whereas the Títulos have maturities of 91 to 182 days. For information on current rates, see http://www.bna.ao/. Plans for a Eurobond issue have been under discussion for some time but there is no current date announced for the launch of such a bond.
In December 2005, the government announced plans to develop a stock market and appointed a commission to oversee its creation. No visible progress has been made of late, even though the Minister of Finance had said he hoped the stock exchange would start operations in 2011.
Competition from State-Owned Enterprises (SOEs)
In Angola certain SOEs exercise delegated governmental powers, especially in the mining sector where the government is the sole concessionaire. Foreign investors may sometimes find demands made by SOEs excessive, and under such conditions SOEs have easier access to credit and government contracts. There is no law mandating preferential treatment to SOEs, but in practice they have access to inside information and credit. Currently, SOEs are not subject to budgetary constraints and quite often exceed their capital limits.
SOEs operate mostly in the extractive sectors, transportation, commerce, banking and construction. SOEs are given certain advantages in sectors such as transportation and mining. All SOEs in Angola are required to have boards of directors, and most board members are affiliated with the government. SOEs are not explicitly required to consult with government officials before making decisions. The government has discussed establishing a Sovereign Wealth Fund but has not done so to date. By law SOEs must publish annual financial reports for the previous year in the national daily newspaper by the 1st of April. Such reports are not subject to external auditing. The standards used are often questioned. Although not all SOEs fulfill their legal obligations, very few are sanctioned.
Corporate Social Responsibility (CSR)
There is an awareness of corporate social responsibility among foreign companies and some of the larger local companies. Many foreign companies and a few local ones share concern for the environment and support community projects. Most multinationals from the extractive sector invest significant funds in CSR projects, which are appreciated by the benefiting communities and by the government.
Political violence is not a substantial risk in most of Angola. The most significant incident of political violence since the end of the civil war was the January 2010 attack on the Togolese national soccer team by FLEC (Front for the Liberation of the Enclave of Cabinda), a separatist group. The team was traveling through the northern province of Cabinda by road to take part in a soccer tournament.
Corruption, including bribery, raises the costs and risks of doing business and can create an uneven playing field for foreign investors. Corruption has a corrosive impact on both market opportunities overseas for U.S. companies and the broader business climate. It also deters international investment, stifles economic growth and development, distorts prices, and undermines the rule of law.
It is important for U.S. companies, irrespective of their size, to assess the business climate in the sector in which they will be operating or investing, and to have an effective compliance program or measures to prevent and detect corruption, including foreign bribery. U.S. individuals and firms operating or investing in foreign markets should take the time to become familiar with the relevant anticorruption laws of both Angola and the United States in order to properly comply with them, and where appropriate, they should seek the advice of legal counsel.
The U.S. Government seeks to level the global playing field for U.S. businesses by encouraging other countries to take steps to criminalize their own companies’ acts of corruption, including bribery of foreign public officials, by requiring them to uphold their obligations under relevant international conventions. A U. S. firm that believes a competitor is seeking to use bribery of a foreign public official to secure a contract should bring this to the attention of appropriate U.S. agencies, as noted below.
U.S. Foreign Corrupt Practices Act: In 1977, the United States enacted the Foreign Corrupt Practices Act (FCPA), which makes it unlawful for a U.S. person, and certain foreign issuers of securities, to make a corrupt payment to foreign public officials for the purpose of obtaining or retaining business for or with, or directing business to, any person. The FCPA also applies to foreign firms and persons who take any act in furtherance of such a corrupt payment while in the United States. For more detailed information on the FCPA, see the FCPA Lay-Person’s Guide at: http://www.justice.gov/criminal/fraud/documents
Other Instruments: It is U.S. Government policy to promote good governance, including host country implementation and enforcement of anti-corruption laws and policies pursuant to their obligations under international agreements. Since enactment of the FCPA, the United States has been instrumental in the expansion of the international framework to fight corruption. Several significant components of this framework are the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Antibribery Convention), the United Nations Convention against Corruption (UN Convention), the Inter-American Convention against Corruption (OAS Convention), the Council of Europe Criminal and Civil Law Conventions, and a growing list of U.S. free trade agreements. Angola is not a part of any of these conventions, but generally all countries prohibit the bribery and solicitation of their public officials.
UN Convention: The UN Anticorruption Convention entered into force on December 14, 2005, and there are 148 parties to it, including Angola, as of September 2010 (see http://www.unodc.org/unodc/en/treaties/CAC/signatories.html). The UN Convention is the first global comprehensive international anticorruption agreement. The UN Convention requires countries to establish criminal and other offences to cover a wide range of acts of corruption. The UN Convention goes beyond previous anticorruption instruments, covering a broad range of issues ranging from basic forms of corruption such as bribery and solicitation, embezzlement, trading in influence to the concealment and laundering of the proceeds of corruption. The Convention contains transnational business bribery provisions that are functionally similar to those in the OECD Antibribery Convention and contains provisions on private sector auditing and books and records requirements. Other provisions address matters such as prevention, international cooperation, and asset recovery.
Local Laws: U.S. firms should familiarize themselves with local anticorruption laws, and, where appropriate, seek legal counsel. While the U.S. Department of Commerce cannot provide legal advice on local laws, the Department’s U.S. and Foreign Commercial Service can provide assistance with navigating the host country’s legal system and obtaining a list of local legal counsel.
Assistance for U.S. Businesses: The U.S. Department of Commerce offers several services to aid U.S. businesses seeking to address business-related corruption issues. For example, the U.S. and Foreign Commercial Service can provide services that may assist U.S. companies in conducting their due diligence as part of the company’s overarching compliance program when choosing business partners or agents overseas. The U.S. Foreign and Commercial Service can be reached directly through its offices in every major U.S. and foreign city, or through its Website at www.trade.gov/cs.
The Departments of Commerce and State provide worldwide support for qualified U.S. companies bidding on foreign government contracts through the Commerce Department’s Advocacy Center and State’s Office of Commercial and Business Affairs. Problems, including alleged corruption by foreign governments or competitors, encountered by U.S. companies in seeking such foreign business opportunities can be brought to the attention of appropriate U.S. government officials, including local embassy personnel and through the Department of Commerce Trade Compliance Center “Report A Trade Barrier” Website at tcc.export.gov/Report_a_Barrier/index.asp.
Guidance on the U.S. FCPA: The Department of Justice’s (DOJ) FCPA Opinion Procedure enables U.S. firms and individuals to request a statement of the Justice Department’s present enforcement intentions under the antibribery provisions of the FCPA regarding any proposed business conduct. The details of the opinion procedure are available on DOJ’s Fraud Section Website at www.justice.gov/criminal/fraud/fcpa. Although the Department of Commerce has no enforcement role with respect to the FCPA, it supplies general guidance to U.S. exporters who have questions about the FCPA and about international developments concerning the FCPA. For further information, see the Office of the Chief Counsel for International Counsel, U.S. Department of Commerce, Website, at http://www.ogc.doc.gov/trans_anti_bribery.html. More general information on the FCPA is available at the Websites listed below.
Exporters and investors should be aware that generally all countries prohibit the bribery of their public officials, and prohibit their officials from soliciting bribes under domestic laws. Most countries are required to criminalize such bribery and other acts of corruption by virtue of being parties to various international conventions discussed above.
To lower investment risks and provide greater assurance to investors, Angola needs greater progress toward good governance, the rule of law and diminished corruption. Senior officials are widely seen as corrupt, while the government’s limited publication of accounting information fuels public suspicions. Since 2006, under pressure from the international community, the government has made significant strides towards greater transparency by publishing financial information and preventing extra-budgetary expenditures. In 2010 Angola published its detailed budget online at http://www.minfin.gv.ao/ In recent years, both the amount and quality of budgetary and oil revenue data has gotten better. Angola now publishes online a monthly block-by-block accounting of oil production and revenues at http://www.minfin.gv.ao/. Additionally, Angola has committed to taking greater steps toward transparency, such as publishing the external audits of state-owned oil company Sonangol, as was required as a prior condition for its Stand-By Arrangement with the IMF. Angola participates in the New Partnership for Africa’s Development (NEPAD), which includes a Peer Review Mechanism on good governance and transparency.
Low civil-service salaries and a proliferation of bureaucracy and regulations present opportunities for rent-seeking and encourage corruption. Complicated procedures and long bureaucratic delays sometimes tempt investors to seek quicker service and approval by paying gratuities and facilitation fees. Transparency International's 2011 Corruption Perception Index (CPI) placed Angola at 168 of 183 countries surveyed. The Heritage Foundation ranked Angola 161 of 183 countries surveyed on its 2011 Index of Economic Freedom, describing Angola as “repressed.”
The 2002 Audit Law requires audits for all “large” companies, but the lack of a professional accounting oversight body has impeded enforcement, and the law does not require that the results of the audit be made public. In November 2009, President Dos Santos called for a zero tolerance policy against corruption, but there is little sense that this call has led to a decrease in corruption in practice. In March 2010, the National Assembly approved a law on Public Probity which requires most government officials to declare their assets to the Attorney General, though the information is not made public. In May 2010 the National Assembly passed a new anti- money laundering and terrorism financing law, which came into effect in July 2010, and is still being implemented.
Some useful resources for individuals and companies regarding combating corruption in global markets include the following:
- Information about the U.S. Foreign Corrupt Practices Act (FCPA), including a “Lay-Person’s Guide to the FCPA” is available at the U.S. Department of Justice’s Website at: http://www.justice.gov/criminal/fraud/fcpa.
- Information about the OECD Antibribery Convention including links to national implementing legislation and country monitoring reports is available at: http://www.oecd.org/department/0,3355,en_2649_348
59_1_1_1_1_1,00.html. See also new Antibribery Recommendation and Good Practice Guidance Annex for companies: http://www.oecd.org/dataoecd/11/40/44176910.pdf
- General information about anticorruption initiatives, such as the OECD Convention and the FCPA, including translations of the statute into several languages, is available at the Department of Commerce Office of the Chief Counsel for International Commerce Website: http://www.ogc.doc.gov/trans_anti_bribery.html.
- Transparency International (TI) publishes an annual Corruption Perceptions Index (CPI). The CPI measures the perceived level of public-sector corruption in 180 countries and territories around the world. The CPI is available at: http://www.transparency.org/policy_research/surveys_indi
ces/cpi/2009. TI also publishes an annual Global Corruption Report which provides a systematic evaluation of the state of corruption around the world. It includes an in-depth analysis of a focal theme, a series of country reports that document major corruption related events and developments from all continents and an overview of the latest research findings on anti-corruption diagnostics and tools. See http://www.transparency.org/publications/gcr.
- The World Bank Institute publishes Worldwide Governance Indicators (WGI). These indicators assess six dimensions of governance in 212 countries, including Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption. See http://info.worldbank.org/governance/wgi/sc_country.asp. The World Bank Business Environment and Enterprise Performance Surveys may also be of interest and are available at: http://go.worldbank.org/RQQXYJ6210.
- The World Economic Forum publishes the Global Enabling Trade Report, which presents the rankings of the Enabling Trade Index, and includes an assessment of the transparency of border administration (focused on bribe payments and corruption) and a separate segment on corruption and the regulatory environment. See http://www.weforum.org/en/initiatives/gcp/GlobalEnablin
- Additional country information related to corruption can be found in the U.S. State Department’s annual Human Rights Report available at http://www.state.gov/g/drl/rls/hrrpt/.
· Global Integrity, a nonprofit organization, publishes its annual Global Integrity Report, which provides indicators for 92 countries with respect to governance and anti-corruption. The report highlights the strengths and weaknesses of national level anti-corruption systems. The report is available at: http://report.globalintegrity.org/.
Bilateral Investment Agreements
Angola and the United States do not have a bilateral investment agreement. Angola has bilateral investment agreements in force with Cape Verde, Germany, and Italy, and has signed agreements with Portugal, South Africa, Spain and the United Kingdom, though these agreements have not entered into force. A list of current bilateral investment treaties and their status can be found on the United Nations Conference on Trade and Development (UNCTAD) website at www.unctad.org/sections/dite_pcbb/docs/bits_angola.pdf.
In May 2009 Angola signed a Trade and Investment Framework Agreement (TIFA) with the United States, intended to provide a forum to address trade issues and help enhance trade and investment relations between the two countries. The first meeting of the TIFA Council under this agreement took place in June 2010. However the next step, joint formulation of a work-plan to guide the work of the TIFA Council, has not been completed.
In July 2010 the United States and Angola signed a Memorandum of Understanding establishing a bilateral Strategic Partnership Dialogue, which commits the two parties to increased bilateral partnerships in various areas.
OPIC and Other Investment Insurance Programs
The Overseas Private Investment Corporation (OPIC) has provided investment insurance to projects in Angola in recent years, and U.S. investors can apply for OPIC insurance, including coverage under its “Quick Cover” program for projects valued at less than $50 million in certain sectors.
Angola is a member of the Multilateral Investment Guarantee Agency (MIGA), which provides insurance to foreign investors against such risks as expropriation, non-convertibility, war or civil disturbance. MIGA also provides investment dispute resolution on a case-by-case basis.
Angola’s General Labor Law (Law No. 2/00) provides significant protection and benefits to workers, including the right to strike and bargain collectively. The law spells out proper procedures for hiring workers. For work contracts of indefinite duration, the law provides for a basic probationary period of up to six months, during which the worker or employer can terminate the contract without notice or justification. After the probationary period ends, dismissed workers have the right to appeal to a Labor Court. Many employers prefer to reach a monetary settlement with workers when a dispute arises, rather than bring cases before the Court. The World Bank Group’s 2012 Doing Business report placed the average cost of firing a worker in Angola at 11.6 weeks of salary for workers with 1- 10 years of tenure, and 54.2 weeks of salary for workers with 20 or more years of tenure.
The Angolan labor force has limited technical skills, English language ability and managerial ability. Many employers find it necessary to invest heavily in educating and training their Angolan staff.
The government conducts annual surveys of the oil industry to implement a requirement that oil companies hire Angolan nationals when qualified applicants are available. If no qualified nationals apply for the position, then the companies may request the government’s permission to hire expatriates. Outside of the petroleum sector, policies to encourage "Angolanization" of the labor force discourage bringing in expatriate labor. This has extended to delays in approving visas for technicians to visit for a few weeks. The constitution grants the right to engage in union activities and labor strikes, but the government may intervene in labor disputes that affect national security, particularly strikes in the oil sector.
Foreign-Trade Zones/Free Ports
Angola is a signatory to the SADC Free Trade Protocol that seeks to harmonize and reduce tariffs and establish regional policies on trade, customs and methodology; however, Angola has not yet begun to implement the protocol. A new tariff schedule came into force in September 2008 that removed duties on the import of raw materials, equipment, and intermediate goods for industries and reduced tariffs on 58 categories of basic goods. Angola has signed customs cooperation agreements with Portugal, São Tomé and Príncipe, and Namibia, and has begun negotiating customs agreements with Zambia and the Democratic Republic of Congo, both fellow SADC members.
Foreign Direct Investment Statistics
According to the UN Conference on Trade and Development’s (UNCTAD) 2011 World Investment Report, in 20 Angola had a total inward stock of FDI of $25.028 billion, or 63.3% of GDP, and an outward stock of $4.6 billion. UNCTAD reported the 2010 FDI inward flows at $9.9 billion, and outward at $1.16 billion. UNCTAD does not provide data on the countries of origin for FDI in Angola. Angola’s National Private Investment Agency (ANIP) has released some figures on FDI for 2010, but limits its figures to the non-extractive sectors of the economy, thereby leaving out the diamond and oil sectors, which are the primary source of FDI for Angola.
National Private Investment Agency (ANIP): http://www.iie-angola-us.org/
US-Angola Chamber of Commerce: http://www.us-angola.org/
Government of Angola Website: http://www.angola.gov.ao/
National Bank of Angola (the Central Bank): http://www.bna.ao/
Ministry of Finance: http://www.minfin.gv.ao/
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