Chapter

ANGOLA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article XIVYes.
Exchange Arrangement
CurrencyUntil November 30, 1999, the currency of Angola was the Angolan readjusted kwanza. A new currency, the kwanza, was introduced on December 1, 1999.
Exchange rate structureUnitary.
Classification
Independently floatingOn May 21, 1999, a package of foreign exchange liberalization measures was implemented and since then, the kwanza has floated freely, with the central bank setting a reference rate for its transactions based on the previous day’s average market rate. Prior to that date, all legal transactions took place at the official exchange rate, and exchange houses were obliged to deal at the official exchange rate set for commercial banks. Thus, the exchange rate arrangement of Angola has been reclassified to the category independently floating from the category crawling peg. Authorized foreign exchange dealers may deal among themselves and with their customers at freely negotiated rates. The National Bank of Angola (BNA) intervenes in the foreign exchange market.
Exchange taxForeign exchange operations, except transactions with banknotes and traveler’s checks, checks in favor of natural persons, and transactions between banking institutions are subject to a stamp duty of 1.5%.
Exchange subsidyNo.
Forward exchange marketNo.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe BNA prescribes the currency to be used in import and export transactions, which is either that of the country of origin of imports or the country of destination of exports, or the dollar.
Payment arrangements
Bilateral payment arrangements
OperativeYes.
Clearing agreementsAngola is a member of COMESA.
Barter agreements and open accountsBilateral arrangements, which do not contain bilateral payment features, are maintained with Brazil, Portugal, and Spain.
Administration of controlThe BNA is the exchange authority and may delegate its powers pertaining to specific activities to other entities. All capital transactions and invisible operations exceeding $50,000 require a prior authorization by the BNA. The BNA has authorized commercial banks and exchange bureaus to carry out transactions in the official foreign exchange market. Foreign exchange bureaus are licensed to deal in banknotes and traveler’s checks and execute current invisible operations of private nature. Banks are allowed to execute capital movements (after an authorization from the BNA has been issued), permitted invisible operations, and foreign exchange transactions related to foreign trade.
International security restrictionsn.a.
Payment arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are permitted to hold and trade gold only in the form of jewelry.
Controls on external tradeImports and exports of gold are the monopoly of the BNA.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports of domestic currency are prohibited.
Foreign currencyResidents are permitted to take out more than $10,000 in foreign exchange only if they present exchange purchase documents, including the reason for the purchase. Nonresidents are allowed to bring into the country any amount of foreign exchange, but when leaving Angola are allowed to take with them more than $5,000 only if the excess was declared upon arrival into the country. The export and reexport of banknotes and traveler’s checks by banking institutions requires a prior authorization issued by the BNA.
On imports
Domestic currencyYes.
Foreign currencyThere are no limits on the amount of foreign banknotes or traveler’s checks that a resident person may bring into the country; for nonresidents, any amount in excess of $5,000 must be declared upon arrival. Banking institutions are free to import banknotes and traveler’s checks, but they must submit a monthly report to the BNA.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyCheckbooks may not be issued against these accounts. On May 21, 1999, restrictions on the use of foreign currency accounts were eased to allow deposits without declaring source of funds, and to allow debits for purchases of kwanza and for settlements of international payments on behalf of the depositor.
Held abroadAfter prior approval, enterprises are allowed to open foreign exchange accounts to pay for imports of goods and services. For natural persons, no approval is required for opening such accounts.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedThese accounts may be credited with foreign exchange transferred from abroad or the deposit of proceeds from the account holder’s activities in Angola. They maybe debited with the sale of foreign exchange, payments for foreign currency expenditures, or the repatriation of authorized amounts. On May 21, 1999, restrictions on the use of nonresident accounts (in foreign currency and kwanza) were eased to allow shifting of balances between both types of accounts and the transferring of funds from abroad into those accounts.
Domestic currency accountsNonresidents may open two types of domestic currency accounts: type A and type B. The type A account may be credited with the proceeds of the sale of cash from the foreign exchange account and, after prior BNA authorization, with receipts from the nonresident’s activities in Angola. These accounts may be debited for payments of local expenses and against purchases of foreign currency to be deposited in a foreign currency account held by the same entity.



The type B account may only be credited with receipts of the nonresident’s activity in the country (when allowed by the BNA), and may only be debited for payment of local expenses.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Preshipment inspectionYes.
Import licenses and other nontariff measures
Negative listThere are restrictions on the imports of ammunition, money, toxic products, and certain drugs by private persons.
Open general licensesImports of goods under $5,000 do not require trade licenses.
Import taxes and/or tariffsThe tariff system comprises eight rates: 1%, 2%, 5%, 10%, 20%, 25%, 30%, and 35%.
Taxes collected through the exchange systemThe stamp duty is collected through the exchange system.
State import monopolyImports of oil products can only be effected by the public oil company.
Exports and Export Proceeds
Repatriation requirementsYes.
Surrender requirementsForeign oil companies are allowed, under an authorization, to retain their export receipts abroad for payment of imports of goods and services, profits transfer, and the amortization of capital. These companies must import funds for payment of royalties, taxes, and local expenses. Domestic oil companies must surrender all their export proceeds to the BNA. In the non-oil sector, foreign exchange earnings must be surrendered to the domestic banks. Diamond companies are allowed to retain in banks in the country a percentage of the receipts of exports for payment of imports of goods and services. They may also retain part of their receipts abroad in escrow accounts.
Financing requirementsn.a.
Documentation requirements
Letters of creditYes.
DomiciliationYes.
Preshipment inspectionYes.
Export licenses
Without quotasAll exports of goods and services are subject to licensing. Exports of arms and ammunition, and ethnological collections are prohibited. Special export regimes apply to aircraft, animals and animal products, historical objects, and petroleum. Reexports of goods other than personal belongings are also prohibited.
Export taxesOn September 3, 1999, export taxes were changed to the rates of 1%, 2%, 3%, 4%, 5%, and 10%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersAs of May 21, 1999, authorization of the BNA is required for nongovernment payments for invisibles in excess of $50,000; below that, banks may sell the foreign exchange but must report to the BNA; lower limits are applied for travel and private transfers, as indicated below.
Trade-related paymentsAbove $50,000, service contracts with nonresidents are subject to licensing.
Prior approvalYes.
Investment-related payments
Prior approvalYes.
Quantitative limitsForeign investors have to obtain MOF authorization to remit dividends, which are routinely granted, provided the investment in the resident company exceeds $250,000.
Payments for travel
Quantitative limitsDepending on the documented purpose of the travel, the limits are as follows: (1) for individuals, up to $10,000 a person a trip to any country; (2) for business travel, $500 a day for up to 30 days.
Personal payments
Prior approvalPrior approval is required for the payment of pensions above $50,000.
Quantitative limitsFor extended education travel, the limit is $2,000 a month. For family maintenance and alimony payments, up to the equivalent of $2,000 a month may be granted to Angolans or foreigners residing abroad who are direct ascendants or descendants of, and financially dependent on, residents in Angola, subject to presentation of documents establishing kinship. For medical expenses, the limit is $5,000.
Foreign workers’ wages
Prior approvalYes.
Other payments
Prior approvalYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Surrender requirementsService earnings must be surrendered to the banks, unless the provider is authorized by the BNA to retain a certain proportion of the proceeds.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsForeign investment activities (i.e., the setting up of new companies or branches, but also acquisition of equity, total or partial takeover of operations, and lending related to profit sharing) are subject to the provisions of the Foreign Investment Law as well as the provisions of foreign exchange legislation and regulations. Implementation is the responsibility of the Foreign Investment Institute. Foreign investments in the areas of petroleum production, diamond mining, and financial institutions are governed by separate legislation. All capital transfers, except supplier credits, are subject to BNA licensing.
Controls on derivatives and other instrumentsThere are controls on all derivatives transactions.
Controls on credit operations
Commercial creditsOperations are subject to licensing for statistical purposes only.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Financial credits
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Guarantees, sureties, and financial backup facilities
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Controls on direct investment
Outward direct investmentAccording to the Exchange Control Law, Angolan citizens are permitted to invest abroad.
Inward direct investmentEffective May 21, 1999, a minimum amount of $60,000 was set for authorized foreign investments. Such investments in amounts up to $250,000 need BNA clearance; for those above $250,000, government approval is required. Foreign investment is prohibited in the following areas: (1) defense, internal public order, and state security; (2) central banking and currency issue; and (3) other areas reserved for the state.
Controls on liquidation of direct investmentForeign investors are guaranteed the right to transfer abroad the proceeds of the sale of investments, including gains and amounts owed to them after payments of taxes due, but prior approval of the MOF is required.
Controls on real estate transactionsThere are controls on all real estate transactions.
Controls on personal capital movementsThere are controls on all personal capital movements.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)Yes.
Lending locally in foreign exchangeBanks may lend locally in foreign exchange to resident exporters.
Differential treatment of deposit accounts in foreign exchange
Liquid asset requirementsLiquid asset requirements are 50% of the foreign exchange portfolio.
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidents
Reserve requirementsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsBanks may hold daily foreign exchange positions of up to $500,000; for foreign exchange bureaus, the amount is up to $150,000.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 1999
Exchange arrangementMay 21. Foreign exchange transactions were authorized at market exchange rates. Thus, the exchange rate arrangement of Angola has been reclassified to the category independently floating from the category crawling peg.



May 21. Commercial banks and foreign exchange bureaus were authorized to settle international trade and services transactions up to certain limits, without requesting BNA authorization.



December 1. A new currency, the kwanza, replaced the readjusted kwanza.



Resident accountsMay 21. Restrictions on the use of foreign currency accounts were eased to allow deposits without declaring source of funds, and to allow debits for purchases of kwanza and for settlements of international payments on behalf of the depositor.
Nonresident accountsMay 21. Restrictions on the use of nonresident accounts (in foreign currency and kwanza) were eased to allow shifting of balances between both types of accounts and the transferring of funds from abroad into those accounts.
Imports and import paymentsSeptember 3. The import tariff code was simplified through a reduction in tariff levels (with a new maximum rate of 35%) and in the levels of bands (to 8 from 43).
Exports and export proceedsSeptember 3. The export tariff code was simplified to six levels of bands and tariff levels were reduced (with a new maximum rate of 10%).
Payments for invisible transactions and current transfersMay 21. Banks and foreign exchange bureaus were authorized to settle invisible transactions up to amounts of $50,000 without requesting BNA authorization; travel allowances were raised for all travelers; the limit on transfers to relatives abroad was reduced to the equivalent of $2,000 a month.
Capital transactions
Controls on direct investmentMay 21. A minimum amount of $60,000 was set for authorized foreign investments. Such investments in amounts up to $250,000 need BNA clearance; for those above $250,000, government approval is required.
Provisions specific to commercial banks and other credit institutionsMay 21. Banks were authorized to provide credit in foreign currency to exporters, up to a limit of 50% of the lending bank’s deposits in that specific currency.

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