Angola: Minister of State Highlights Benefits of Stock Exchange Value

Luanda — Minister of State for Economic Coordination Manuel Nunes Júnior said Angola's first initial public offering will test the "appetite" of investors before listing more assets this year.

In an interview with Bloomberg, the minister said that the BAI bank, the country's largest creditor, will introduce on 9 June 10% of its shares, currently controlled by the state.

The bids will include state stakes in Caixa Geral Angola SA bank, Angolan service station network Sonangalp and TV Cabo Angola.

According to the minister, private companies should also follow the example.

Manuel Nunes Júnior added that companies in the oil, construction and financial sectors have also shown interest in listing their shares on the stock exchange.

"They are being prepared to ensure they meet all regulatory requirements," he added.

According to him, the sale of shares will be part of the biggest privatisation programme ever carried out by Angola, which has around 195 assets earmarked for sale and aims to attract foreign investors to diversify the oil-based economy.

"The government chose to sell some of these assets on the stock exchange to bring greater transparency to the process," explained Nunes Junior.

Angola, he said, works before the stock market has enough liquidity to compete with other stock exchanges.

BAI Bank will go public first with just 10% of its shares, valued at around USD 97 million, traded.

According to the minister, the government has not yet set a date for the sale of the stakes in the two largest companies - the oil company Sonangol and the diamond company Endiama.

"The path to a strong capital market with sufficient liquidity is demanding," Nunes Junior said.

The minister, who is in charge of reviving Angola's economy which emerged from a five-year recession in 2021, said the government was reviewing its economic projections, which could show "slightly stronger growth" for 2022.

Current forecasts call for gross domestic product growth of 2.4% this year, compared to 0.7% in 2021, in line with the 2022 budget.

Angola's economy is benefiting from rising oil prices and the growth of industry, ranging from agriculture to construction.

While the country's 2022 budget was based on the price of $59 per barrel of oil, oil prices fluctuated around $100 per barrel throughout April, due to the conflict between Russia and Ukraine.

"This gives us the opportunity to strengthen our cash reserves, giving us greater security for the normal execution of our expenditures", Nunes Junior added.

However, the conflict has also increased the cost of basic commodities such as food, fertilizer and sunflower oil.

"Angola, which imports most of its consumer goods, is 'exposed to more expensive imports and runs the risk of some pressure on domestic prices,'" he explained.

Manuel Nunes Júnior added that the government had created a working group to assess the impact of the Russian-Ukrainian conflict, including the impact on prices and inflation.

"The objective is to present measures to mitigate these impacts and mitigate the growing costs for Angolan families," he concluded.

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