Real Property

Land reform in Angola occurred in 2002 following the end of the Angolan Civil War. After two years of preparation, the land law (Lei de Terras de Angola) was passed on December 18, 2004. While the land act is a crucial step toward addressing issues of land tenure, normalization of land ownership in Angola persists with problems such as difficulties in completing land claims, land grabbing, lack of reliable government records, and unresolved status of traditional land tenure. Among other provisions, the law included a formal mechanism for transforming traditional land property rights into legal land property rights (clean titles). During the civil war, a transparent system of land property rights did not exist, so it was crucial to re-establish one shortly after the end of hostilities. Transparency and land property rights are critical for Angolan economic development given that two thirds of Angolans work in agriculture and are thus directly dependent on land property rights.

One of the main tasks of the new Angolan land law is to protect people from evictions, which occurred frequently during the colonial period as well as during the civil war, largely due to unclear land property rights. Under the Constitution, the state has ultimate ownership of Angola’s land with the exception of land protected under international law. The land law authorizes private rights to urban land (i.e. cities, townships) that have qualities of freehold titles: the landholder has a perpetual right of occupancy and land usage, and the landholder can transfer, mortgage, and sell the right. However, the purchase and sale of untitled urban land must be by public auction. The law permits most urban and some non-urban land obtained for economic purposes to be leased through long-term renewable leases from the Angolan government for up to 60 years, a process used especially in the case of rural agricultural land used for economic purposes, and often includes renewal options at the end of the lease.

Legislation governing the right of access to land includes the 2004 “Land Act” and “General Concession of Land Regulations.” According to the “Land Act,” the State may transfer or constitute, for the benefit of Angolan natural or legal persons, a multiplicity of land rights on land forming part of its private domain. Although, it is possible to transfer ownership over some categories of land, the transfer of State land almost never implies the transfer of its ownership, but only the formation of minor land rights with leasehold being the most common form in Angola. The recipient of private property rights from the State can only transfer those rights with consent of the local authority and after a period of five years of effective use of the land (GRA 2004 law). Weak land tenure legislation and lack of secure legal guarantees (clean titles), are the reasons given by most commercial banks for their greater than 80 percent refusal rate for loans since land is used as collateral. Foreign real-estate developers therefore seek out public-private partnership (PPP) arrangements with State actors who can provide protection against land disputes and financial risks involved in projects that require significant cash outlays to get started.

Registering parcels of land over 10,000 hectares must be approved by the Council of Ministers. Registering property takes 190 days on average, according to the World Bank’s Doing Business 2018 survey, with fees averaging three percent of property value. Owners must also wait five years after purchasing before reselling land. There are no written regulations setting out guidelines defining different forms of land occupation, including commercial use, traditional communal use, leasing, and private use. Over the years, the government has given out large parcels of land to individuals in order to support the development of commercial agriculture. However, this process has largely been unsys********tic and does not follow any formal rule change on land tenure by the State.

Before obtaining proof of title, an Angolan citizen or an Angolan legal entity must also obtain the Real or Leasing Rights (“Usufruct”) of the Land from the Instituto de Planeamento e Gestao Urbana de Luanda. This is often a time-consuming procedure, taking up to a year or more. However, in the case that company X already owns the land the company must secure a land property title deed from the Real Estate Registry in Luanda. An updated property certificate ("certidao predial") is obtained from the relevant Real Estate Registry, with the complete deion of the property including owner(s) information and any charges, liens, and/or encumbrances pending on the property. The complex administration of property laws and regulations that govern land ownership and transfer of real property as well as its tedious registration process may reduce investor appetite for real estate investments in Angola. Despacho no. 174/11 of March 11, 2011 mandates the total fees for the "certidao predial" include stamp duty (calculated according to the Law on Stamp Duty); justice fees (calculated according to the Law on Justice Fees); fees to justice officers (according to the set contributions for the Justice budget); and, notary and other fees. The total fee is also dependent on the current value of the fiscal unit (UCF), which is currently at Angolan Kwanza 88.00 (USD 40 cents equivalent).

Intellectual Property Rights (IPR)

Angolan law recognizes the protection of IPR. 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. 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. There are currently no statistics available regarding counterfeit goods seized by the Angolan government.

INADEC (Instituto Nacional de Defesa dos Consumidores), under the umbrella of the Ministry of Commerce, tracks and monitors the seizure of counterfeit goods seized by the Angolan government. They do not currently have a website, nor do they regularly publish statistics. They publish the seizure of counterfeit products on an ad-hoc basis, primarily in the government-owned daily, Jornal de Angola.

IAPI (Instituto Angolano de Propriedade Intelectual), is the governmental body within the Ministry of Industry charged with implementing patent and trademark law. The Ministry of Culture oversees copyright law. IP infringement is widespread, most notably in the production and distribution of pirated CDs, DVDs, and other media, largely for personal consumption. Counterfeit pharmaceuticals are another major area of concern.

Angola is not listed on the USTR’s 2017 Out-Of-Cycle Review of Notorious Markets, or in the 2018 Special 301 Report. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

The U.S. Embassy point of contact for IPR related issues is Mballe Nkembe (NkembeMM@state.gov). For legal counsel, refer to Angola’s Country Commercial Guide Local Professional Services List (http://export.gov/ccg/angola090710.asp)

Capital Markets and Portfolio Investment

Angola’s capital markets remain very underdeveloped. To respond to the need for increased sources of financing of the economy, in 2013, the Angolan Government created the Capital Market Commission (CMC). Angola’s banks are likely the most established businesses that could potentially list on an exchange. However, many Angolan banks have a high rate of non-performing loans, reported to be as high as 31 percent. Angola’s banks have struggled in recent years due to the country’s deteriorating economic environment and increasing high rate of delinquent loans. The Governor of the BNA has stated that Angola’s banks must go through a consolidation phase over the next year, which may limit their ability in the near-term to list on the country’s fledgling stock exchange.

In May 2018, Angola raised USD 3 billion in its second Eurobond issue in international markets. The two-part deal included a USD 1.75 billion of 10-year bond with an 8.25 percent yield and a second of USD 1.25 billion of 30-year bonds with a 9.37 percent yield. Angola previously, in 2012, through Russia’s second-largest bank, VTB, managed the sale of its first international bond, a USD 1 billion, 7-year bond with a 7.0 percent yield. In November 2015, Angola placed a USD 1.5 billion, 10-year Eurobond with a 9.5 percent yield. Deutsche Bank, Goldman Sachs, and ICBC managed the 2015 bond placement.

The BNA has developed a market for short-term bonds, called Titulos do Banco Central, and long-term bonds, called Obrigacoes do Tesouro. Most of these bonds are bought and held by local Angolan banks. The Obrigacoes have maturities ranging from one to 7.5 years, whereas the Titulos have maturities of 91 to 182 days. For information on current rates, see: http://www.bna.ao/.

Foreign investors do not normally access credit locally. For Angolan investors, credit access is very limited, and if available comes with a collateral requirement of 125 percent, so they either self-finance, or seek financing from non-Angolan banks and investment funds. Subsidized government loan programs to promote economic development, such as the Ministry of Economy’s Angola Invest USD 1.6 billion fund to support small and medium-sized enterprises with loans of up to USD 5 million. These loans are available only to majority-owned Angolan companies, but due to reports of limited quality projects and commercial banks reticence, only a handful of the Angola Invest loans were approved in 2017.

Money and Banking System

The BNA has remained under considerable pressure to stabilize Angola’s economy as the kwanza lost over 55 percent of its value since 2014. The BNA has struggled to fully implement reforms across Angola’s banks, which have lost their correspondent relationships with banks in the United States. Angola has been affected by the broader global de-risking trends wherein banks decide to close business in markets deemed too risky from an anti-money laundering and terrorist financing standpoint. In December 2016, Deutsche Bank, the last international bank providing dollar-clearing services, closed its dollar clearing services in Angola. A limited number of international banks still operate in Angola and provide limited trade finance such as Germany’s Commerzbank and South Africa’s Standard Bank. International banks have held back on entering the Angolan market because the risk of fines and other penalties outweighs the potential rewards of doing business in Angola.

In an effort to increase greater confidence in the banking sector, President Joao Lourenco appointed Jose de Lima Massano as new Governor of the Central Bank on October 30, 2017. The BNA has since raised the mandatory capital start-up requirements for banks from USD 25 million to USD 50 million in the hopes of reducing the number of banks and force necessary mergers. Commercial banks operating in Angola also have until the end of 2018 to increase their share capital to USD 35 million, in line with Notice 2/2018 from the BNA on the “Adequacy of Minimum Capital Stock and Regulatory Own Funds of Financial Banking Institutions.” This regulatory instruction will be reinforced by current draft legislation (“Implementation Strategy of Executive Macroeconomic Program 2017”), which seeks to designate six Angolan Banks (BAI, BIC, Banco Economico, Banco Millenium-Atlantico, BNI, and Banco Sol) to handle 80 percent of Forex in the primary market. The remaining 22 banks are likely to survive only by merging with other banks.

Angola has a low banking market penetration rate and ranks 183 out of 190 countries in the World Bank’s Doing Business 2018 report on the ease of getting credit indicator. According to latest demographics recorded on the last census in 2014, the rate of banked population is 47 percent. As of December 2013, the latest figures available indicated that total customer deposits with the Angolan commercial banks was 4.6 trillion Angolan kwanza, an increase of 17 percent since 2012. Angolan banks extend little unsecured credit, instead requiring significant amounts of collateral (125 percent) in the form of property, or dollar deposits from the borrower. Commercial credit in Angola remains tight. Unclear land titles and ill-defined property rights frequently complicate and lengthen the process of applying for a mortgage. While the BNA tries to limit foreign currency risk, some loans are denominated in foreign currencies, but are consequently weighted at 130 percent for the calculation of risk-weighted assets.

Five banks, Banco Angolano de Investimentos (BAI), Banco Economico, Banco de Fomento Angola (BFA), Banco BIC Angola (BIC) and Banco de Poupanca e Credito S.A.R.L. (BPC), control over 80 percent of total banking assets, deposits, and loans. Angolan banks focus on profit generating activities including transactional banking, short-term trade financing, foreign exchange, and investments in high-interest government bonds. Loans to most sectors have slowed because of the economic crisis. BNA and local bankers have also indicated that there is a growing level of non-performing loans (12 percent in 2015 and 31.3 percent as of December 31, 2017 according to the BNA Financial Indicator System) corresponding to USD 6.8 billion out of USD 22 billion of loans granted. Across most economic sectors, clients struggle to make payments on loans because of the economic crisis. Most banks focus their operations on short-term commission-related activities and are the largest purchasers of government treasuries. Even with the severe economic slowdown and reduction in overall foreign exchange availability, bank profit margins are still high enough to allow them to sustain operations. However, traditional commercial loans are still only a small part of banking in Angola. In the past, state and state-affiliated companies enjoyed privileged access to loans, often at concessionary rates without regard to risk, leading to several bank failures.

Foreign Exchange and Remittances

Foreign Exchange Policies

Angola continues trading mostly in two currencies, the USD and the Euro, with the Renminbi gaining greater prominence given the degree of trade with China. In a bid to deal with the foreign currency shortage and substantial foreign currency arbitrage in the parallel market, the government has opted for a managed float for its currency exchange rate. The Angolan Kwanza was pegged at a rate of 166.00 per U.S. dollar from April 2016 to January 2018 following a steep devaluation due to the slump in oil prices. On January 10, 2018, the BNA began conducting foreign currency auctions allowing the kwanza to fluctuate within an undisclosed but controlled band. As a result, the BNA facilitated a 20 percent devaluation of the kwanza. Commercial banks now purchase foreign currency from the BNA at weekly auctions within the undisclosed band. Payment of remittances in any form and non-strategic imports face a lengthy wait between 90-180 days for foreign exchange. Priority is given to strategic importers of food, raw materials for construction, agriculture, medicine and the oil sector. The government also has a huge backlog of forex arrears of approximately USD 3 billion.

Investors cannot freely convert their earnings in kwanza to any foreign exchange rate due to limited available foreign exchange. Credit cards and other options for payment are extremely limited and money-servicing businesses (Western Union & MoneyGram) have ceased foreign outward transactions in foreign currency.

Remittance Policies

The Angolan government established anti-money laundering restrictions in January 2014 to combat illicit remittance flows. The subsequent drop in foreign exchange availability in Angola beginning in 2015 due to declining petroleum revenues has severely impeded personal and legitimate business remittances. International and domestic companies operating in Angola face significant delays securing foreign exchange approval for remittances to cover key operational expenses, including imported goods and expatriate salaries. Profit and dividend remittances are even more problematic for most companies. The Angolan government has prioritized foreign exchange for essential goods and services including the food, health, defense, and petroleum industries. Due to the tremendous strains on foreign exchange, in 2017, reports indicated that the country drew substantially from its international reserves to increase foreign exchange liquidity in the market. As a result, Angola’s international reserves, which had been protected carefully at USD 24 billion, were reportedly down to USD 13.3 billion as of December 31, 2017. However current levels are now estimated at USD 12.5 billion. Foreign exchange allocations from the BNA since 2016 have been almost exclusively in Euros, partly driven by the loss of corresponding banking relationships with U.S. banks. Profits and dividends repatriation are not prioritized by the BNA, which aggressively protects the country’s foreign exchange.

The new 2018 investment law grants foreign investors “the right and guarantee to transfer abroad” dividends or distributed profits, the proceeds of the liquidation of their investments, capital gains, the proceeds of indemnities and royalties, or other income from remuneration of indirect investments related to technology transfer after proof of implementation of the project and payment of all taxes due. Under the previous 2015 investment law, foreign investors were required to pay higher taxes on early repatriation of dividends and profits within the first several years of an initial investment. The new tax on dividends starts at 15 percent and can rise to as high as 50 percent depending on the value and how early repatriation occurs. Under regulations established in July 2013 aimed at tracking capital movement, strengthening the banking system, and capturing tax revenue, foreign companies are required to process transactions through Angolan banks.

Sovereign Wealth Funds

In October 2012, former President Eduardo dos Santos established a petroleum-funded USD 5 billion sovereign wealth fund called the Fundo Soberano de Angola (FSDEA). The FSDEA was established in accordance with international governance standards and best practices as outlined in the Santiago Principles. In February 2015, the FSDEA was recognized as transparent by the Sovereign Wealth Fund Institute (SWFI), receiving a score of 8 out of 10. The FSDEA has the express purpose of profit maximization with a special emphasis on investing in domestic projects that have a social component (http://www.fundosoberano.ao/investments/). Jose Filomeno dos Santos (Zenu), son of President Jose Eduardo dos Santos, was appointed chairman of FSDEA in June 2013, but has been since removed by President Lourenco based reportedly on poor results at the FSDEA. Zenu also came into the spotlight following revelations by the “Paradise Papers" that approximately USD 3 billion of the FSDEA’s capital was illicitly invested in seven offshore corporations in Mauritius. Zenu was further accused of embezzling USD 500 million from a BNA account held in a London-based bank. Former Finance Minister Carlos Alberto Lopes was named new head of the FSDEA.

Half of the initial endowment of FSDEA was invested in agriculture, mining, infrastructure, and real estate in Angola and other African markets, and the other half was supposedly allocated to cash and fixed income instruments, global and emerging-market equities, and other alternative investments. Since the revelations of the Paradise Papers, the Government of Mauritius, in concert with the Angolan government, has frozen seven bank accounts in Mauritius linked to the FSDEA, and suspended business licenses linked to the FSDEA’s Swiss manager, Quantum Global Investment Management.

In Angola, certain state-owned enterprises (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, often benefitting from a government mandate, operate mostly in the extractive sectors, transportation, commerce, banking, and construction. 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. By law, SOEs must publish annual financial reports for the previous year in the national daily newspaper Jornal de Angola by April 1. Such reports are not always subject to publically released external audits (though the audit of state oil firm Sonangol is publically released). The standards used are often questioned. Not all SOEs fulfill their legal obligations, and few are sanctioned.

In April 2016, former Angolan President dos Santos vacated the board of Sonangol, and in June 2016, installed one of his daughters, well-known business woman Isabel dos Santos, as its Chief Executive to "ensure transparency" in its management and to improve the Angolan oil sector's ability to compete globally. In December 2016, the Angolan Supreme Court ruled that Ms. Dos Santos’ appointment did not constitute a criminal act under Angola nepotism laws. However, in November 2017, only two months into his tenure, President Lourenco fired Isabel dos Santos from the position and named Carlos Saturnino, who had previously served as the Chairman of the Executive Board at Sonangol.

Angola’s supreme audit institution, Tribunal de Contas, is responsible for auditing SOEs. However, the Tribunal de Contas does not make its reports publicly available. Angola’s fiscal transparency would be improved by ensuring its supreme audit institution audits SOEs, as well as the government’s annual financial accounts, and makes public its findings within a reasonable period. Publicly available audit reports would also improve the transparency of contracts between private companies and SOEs.

In November 2016, the Angolan Government revised Law 1/14 “Regime Juridico de Emissao e Gestao da Divida Publica Directa e Indirecta,” which now differentiates between ‘direct’ and ‘indirect’ public debt. The GRA considers SOE debt as indirect public debt, and only accounts in its state budget for direct government debt, thus effectively not reflecting some substantial obligations in fact owed by the government.

Angola is not a party to the WTO’s Government Procurement Agreement (GPA). Angola does
not adhere to the OECD guidelines on corporate governance for State-owned enterprises.

Privatization Program

The government has a plan to privatize 33 of 90 public companies by sale through the Angola Debt and Securities Exchange market (BODIVA). The privatization plan is in line with the provisions of the Government’s Interim Macroeconomic Stabilization Program (PEM), which aims to rid the government of unprofitable public institutions. The government plans to privatize part of state-owned Angola Telecommunications Company, companies in the oil and energy sector, as well as several textile industries. The government has stated that the privatization process will be open to interested foreign investors and has guaranteed a transparent bidding process. The government created a privatization commission on February 27, 2018 but no website has yet been created for submission of tenders. Sonangol also stated that it plans to sell off its non- core businesses as part of its restructuring strategy to make the parastatal more efficient.

The government has enacted laws to prevent labor by children under 14 and forced labor, although resource limitations hinder adequate enforcement. With limitations, the laws protect the rights to form unions, collectively bargain, and strike. Government interference in some strikes has been reported. The Ministry of Public Administration, Employment, and Social Security, has a hotline for workers who believe their rights have been infringed. Angola’s Chamber of Commerce and Industry (CIACC) established the Principles of Ethical Business in Angola.

In 2015, Angola organized an interagency technical working group to explore Angola’s possible membership in the Voluntary Principles on Security and Human Rights (VPs) and the Extractive Industries Transparency Initiative (EITI). Angola has been a member of the Kimberley Process (KP) since 2003, and chaired the KP in 2015, until handing over the rotating chair to the United Arab Emirates.

Angola is not a party to the WTO’s Government Procurement Agreement (GPA), and does not adhere to the OECD guidelines on corporate governance for State-owned enterprises.

Corruption remains pervasive and institutionalized. It has substantially raised the cost of doing business in Angola and has had a corrosive impact on international market investment opportunities and on the broader business climate. Transparency International’s 2017 Corruption Perceptions Index ranks Angola 167 out of 175 countries in its corruption level survey. Prevalent in all sectors of the Angolan society, corruption has remained widespread due to a lack of political will to combat it effectively, appropriate checks and balances, insufficient institutional capacity, and a culture of impunity.

However, against this backdrop, President Lourenco has prioritized the fight against corruption through stronger collaboration and partnership with trade unions, nongovernmental organizations, and civic associations. His government has consulted with industry, cut government expenditure, increased non-oil sector revenue, and devalued the national currency. Lourenco has begun dismantling monopolies to increase market competition and attract investment, and he has won greater investor confidence by removing the former President’s children and incompetent bureaucrats from key government positions. President Lourenco is developing legal instruments to repatriate undeclared assets held by Angolans offshore – valued at approximately USD 30 billion. He has mandated that all senior government officials declare their assets and he has fired several top officials over corruption allegations.

The 2010 Law on Administrative Probity, unlike Lourenco’s mandate for senior government officials, requires all public officials to disclose their assets and income once every two years, and it prohibits public servants from receiving money or gifts from private business deals. The Penal Code makes it a criminal offense for private enterprises to engage in business transactions with public officials. Angola has incorporated regional anti-corruption guidelines and incorporated them into their domestic legislation, including: the Southern Africa Development Community’s (SADC) “Protocol Against Corruption,” the African Union’s “Convention on Preventing and Combating Corruption,” and the United Nation’s “Convention against Corruption.” Angola does not have an independent body to investigate and prosecute corruption cases, and generally, enforcement of existing laws is weak or non-existent. Three institutions – the Audit Court, the Inspector General of Finance, and the Office of the Attorney General – perform many of the anti-corruption duties in Angola. http://www.business-anti-corruption.com/country-profiles/sub-saharan-africa/angola/initiatives/public-anti-corruption-initiatives.aspx

Regardless of the laws on the books and institutions that exist to combat corruption, 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 market opportunities for U.S. companies and the broader business climate. It also deters greater 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 Angola, 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 legal counsel.

In 1996, the Government of Angola enacted by presidential decree the Alta Autoridade Contra Corrupcao (High Authority Against Corruption) Act. There has been no action taken to implement the law since it was enacted.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Angola is not a member state to the UN Anticorruption Convention or the OECD Convention on Combatting Bribery.

Politically related violence is not a high risk in Angola, and incidents are rare. The August 2017 election marked Angola’s first transition of power in 38 years, when former President Eduardo dos Santos, one of the longest serving Presidents on the continent, opted to step down. Current President Joao Lourenco has emerged as the most popular political figure in Angola, revitalizing support for the MPLA and slowly improving Angola’s international image as a result of his sweeping reform agenda and eagerness to engage with the international community. His January 2018 trip to Davos for the World Economic Forum (a first for an Angolan president) added to his narrative as an open, reform-minded politician. While the MPLA continues to dominate the political landscape, UNITA remains the largest opposition party, and a viable third party, CASA-CE, has emerged over the last five years. Lourenco has made positive statements encouraging freedom of speech, but there is room for improving respect for human rights. Reports of excessive use of force by law enforcement, as well as restrictions on freedom of assembly and association, and discrimination and abuse of immigrants and migrants, are serious problems. Civil society is underdeveloped and, at times, stifled in its efforts to check government abuses.

The head of the Southern African Development Community’s (SADC) Organ on Politics, Defense and Security, Angola is actively engaged on the political crises in the Democratic Republic of the Congo (DRC), Zimbabwe, Lesotho, as well as other countries in the region. In November 2017, Angola sent its first-ever contingent of peacekeeping troops to participate in the SADC regional stabilization mission to Lesotho. President Lourenco visited Kinshasa on February 14, 2018 to encourage President Kabila to hold elections in 2018. Angola continues to struggle with its legacy of land mines and is far from reaching a mine-impact free status by 2025, a commitment that the government made under the Ottawa Convention. Since 1995, the United States (Angola’s largest demining donor) has invested more than USD 124 million in Angola to clear and dispose of landmines, unexploded ordnance, and aging weapons and munitions.

The last significant incident of political violence happened in 2010 during an attack against the Togolese national soccer team by FLEC-PM (Front for the Liberation of the Enclave of C********da—Military Position) in the northern province of C********da. FLEC threatened Chinese workers in C********da in 2015 and claimed in 2016 that they would return to active armed struggle against the Angolan government forces. No attacks have since ensued and the FLEC has remained relatively inactive. New president Joao Lourenco has pledged to govern for all Angolans, and combat two of the country's major problems: corruption and mismanagement of public funds.

The likely continuation of reduced revenue from oil exports will continue to limit the GRA's ability to provide the goods and services for Angolan citizens. The GRA has already slashed its budget by half since the start of the economic crisis in 2014, necessitating the cutting of many subsidies for Angolans (including the gasoline and diesel subsidies). In addition, the GRA has increased tax rates and the tax collection base. Although many Angolans take advantage of lax GRA implementation capabilities, the combination of decreasing government services and increasing costs for them, could raise tensions, particularly in an environment where the government has an inconsistent record of accomplishment of delivering basic services. In response, the government has maintained robust spending in 2018 on its internal security and military budget. The government has also attempted to levy new taxes on the oil industry and has promulgated a plan to impose taxes for trash collection on residents and businesses. These taxes would be payable through electricity bills.

The Angolan labor force has limited technical skills, English language capabilities, and managerial ability. Many employers find it necessary to invest heavily in educating and training their Angolan staff. Angola’s labor force was estimated to be 10.85 million in 2016. The literacy rate is estimated to be 71.1 percent (82 percent male, 60.7 percent female). A 2013 National Statistics Institute (SNI) study indicates that formal unemployment is around 26 percent, although these figures are based on limited data taken primarily from urban centers. 86 percent of primary school age children attend school. The Law mandates that children must attend school for six years beginning at age six. 29 percent of boys and 17 percent of girls attend high school.

There are gaps in compliance with international labor standards that may pose a reputational risk to investors. Children are sometimes employed in agriculture, construction, fishing, and coal industries. Forced labor is sometimes used in agricultural, fishing, construction, domestic service, and artisanal diamond mining sectors. Additional information is available in the 2017 Trafficking in Persons Report (https://www.state.gov/j/tip/rls/tiprpt/2017/), 2016 Country Report on Human Rights Practices (https://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/), and 2016 Findings on the Worst Forms of Child Labor, (https://www.dol.gov/agencies/ilab/resources/reports/child-labor/angola).

Angola’s General Labor Law (Law No. 2/00), updated in 2015, recognizes the right of workers, except members of the armed forces and police, to form and join independent unions, to collectively bargain, and to strike, but these rights are either limited or restricted. To establish a union, a minimum of 30 percent of workers from a sector at the provincial level must participate and prior authorization by authorities with accompanying bureaucratic approvals is required. Unlike workers in the private sector, civil service employees do not have the right to collective bargaining. While the law allows unions to conduct their activities without government interference, it also places some restrictions on engaging in a strike. Strict bureaucratic procedures must be followed for a strike to be considered legal. The government can deny the right to strike or obligate workers to return to work for members of the armed forces, police, prison staff, fire fighters, “essential services” public sector employees, and oil workers. The government may intervene in labor disputes that affect national security, particularly strikes in the oil sector. The definition of civil service workers providing “essential services” is broadly defined, encompassing the transport sector, communications, waste management and treatment, and fuel distribution.

Collective labor disputes are to be settled through compulsory arbitration by the Ministry of Labor, Public Administration and Social Security. The law does not prohibit employer retribution against strikers, but it does authorize the government to force workers back to work for “breaches of worker discipline” or participation in unauthorized strikes. The law prohibits anti-union discrimination and stipulates that worker complaints be adjudicated in the labor court. Under the law, employers are required to reinstate workers who have been dismissed for union activities.

The General Labor Law also spells out 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 Labor Court. The World Banks Doing Business 2018 report placed the average cost of firing a worker in Angola at 26.7 weeks of salary weighting for workers with one year, five years, and 10 years of tenure. The notice period before dismissing a worker is 4.3 weeks.

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, i.e. the hiring of locals, discourages bringing in expatriates. However, the associated visa processes for the oil industry are currently easier and faster due to a special process the Angolan Ministry of Petroleum offers companies in that sector. Additionally, working visas for other sectors are also easier to obtain.

Since 1994, the Overseas Private Investment Corporation (OPIC) has provided investment insurance to projects in Angola. U.S. investors can apply for OPIC insurance, including coverage under the “Quick Cover” program for projects valued at less than USD 50 million. OPIC’s portfolio in Angola currently totals USD 20.4 million. Since the agreement, OPIC’s support has helped facilitate critical investments in the energy, services, health care, manufacturing, and financial services 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, and war or civil disturbance. MIGA also provides investment dispute resolution on a case-by-case basis.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy