Angola plans to sell stake in state oil company Sonangol by 2027

Angola plans to sell stake in state oil company Sonangol by 2027
Angola plans to sell stake in state oil company Sonangol by 2027

Angola plans to complete the sale of the stakes in the national oil company Sonangol EP and the diamond company Endiama in the next five years, according to the president of the government asset management agency.

The two companies were among the largest of 195 state-owned companies and assets the government had originally intended to divest between 2019 and this year. The outbreak of the coronavirus pandemic delayed the process and the number of assets was revised to 178.

“We don’t know if Sonangol will be privatized in 2023, 2024 or 2025,” said Patricio Vilar, president of the State Assets and Participations Management Institute, and driving force behind the privatization program, in an interview. in Luanda. , capital of Angola, last week. “What I can guarantee is that, if the market is ready, Sonangol and Endiama will be privatized” during the new government’s five-year term, he said.

Vilar reiterated the government’s commitment to eventually sell 30% of Sonangol, but said the sale could be completed in stages, with terms still under consideration.

President Joao Lourenço, who won a second five-year term last month, pledged to continue his efforts to diversify the Angolan economy, attract foreign investment and jobs. Africa’s second largest oil producer depends on crude for more than 90% of its export revenue.

The sale of stakes in the lender Banco Caixa Geral Angola SA, the service station network Sonangalp, the cable operator TV Cabo Angola and the insurance company ENSA are among those planned for this year.

“We have to be careful not to flood the market,” said Vilar, former director of the Luanda-based exchange Bolsa de Divida e Valores de Angola.

Sonangol and Endiama are contributing to the privatization program by selling part of their own stakes. In June, the two companies sold a combined 10% stake in Banco BAI, the country’s largest lender, in the country’s first initial public offering of shares.

The government has already raised $1.25 billion through the sale of 92 assets, with Angola-based companies making up around 70% of the buyers, according to Vilar. Many of the assets sold were small industrial units and farms more attractive to local investors, he said.

Painful reforms carried out by the government under an International Monetary Fund program that ended in 2021 have meanwhile boosted the value of the kwanza and helped attract foreign buyers, whose investments have revived outdated industries , Vilar said.

“Today there are wheat and biscuit processing industries that did not exist in Angola for 30 years,” he said. “We are creating a new world.”

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