Moody’S Rating for Angola Goes Up as the Country Improves Its Credit Profile 

If there is something that has taken most of us by a surprise is the impressive resilience of African countries amidst the COVID-19 pandemic. When virtually all the Western World, India, and China have struggled to combat the financial consequences of the stagnation, there are several African examples of thriving that should be looked at with close attention.

Of course, one such case is that of Angola.

The financial rating agency Moody’s has definitely paid attention to this country, even when in the past it hasn’t been particularly friendly with it. This nation’s ability to surf through the pandemic turmoil in both the public and private sector has resulted in widespread recognition of its virtues, being Moody’s one of the latest to do so.

The last rating by this New York-based financial agency had positioned Angola with a Caa1 qualification, which actually is the most common value for African countries. However, due to the ability demonstrated by the local government at enhancing the quality of its executive and legislative institutions, this rating has climbed up to a B3.

Furthermore, recent assessments conducted by Moody’s expert panels showed how Angola’s sovereign credit profile has been improving month after month, achieving scores that are similar to the best within the region and which accounts for the recent B3 rating.

Angola’s Finance Minister Highlights the Country’s Performance

It’s no secret that Angola is known for its oil-related businesses and that many financial agencies only assess this sector when measuring the country’s status. However, according to Vera Daves, Angola minister of Finances, this new wave of agencies portraying Angola as a great country to do this business has to do with non-oil revenues.

The minister recently stated that this performance is due to the governmental crusade aimed at improving the country’s economy. These development programs entice many approaches, from fiscal incentives to the consolidation of institutional agencies that serve as the very backbone of local industries. 

Daves has acknowledged how these new ratings ultimately help both Angolans and foreign investors doing business in the country, as financing alternatives for new types of corporations are becoming more and more accessible.

"The higher Angola's credit rating, the easier it will be to get low-interest financing. This impacts the country's ability to finance projects, debt service, and the way potential investors look at the country. Therefore, the narrative of attracting private investment is also easier", Daves stated in a press conference in Ndalatando city.

There are several factors that explain this new qualification, as national authorities consider exchange stability and an overall increase in international reserves as the main causes for the new ratings. On top of that, debt management by financial institutions has also been praised by expert agencies on the matter.

According to Daves, the government’s approach is a conservative one and seeks to deliver financing options in a more intelligent way. This is due to the nation’s objective of broadening the tax base only when it’s necessary, allowing for the total debt to be within the limits of the country’s paying capacity.

In the aforementioned press conference, the Minister was clear at pointing out how these programs will only be expanded in the coming years, especially after seeing its results in income, productivity and international recognition. 

Amongst the main targets, she acknowledges the importance of maintaining the quality of public services and expenditures, well-thought budget proposals and that all public operations are approved considering Angola’s limitations and possibilities.

Recent Tax Legislations among the Main Causes for Success

The Angolan tax regime has seen plenty of changes since the enactment of the VAT framework back in 2019. These changes have greatly improved the conditions for investors to introduce their capital in the country, as income tax, personal tax and property tax are offering amazing incentives.

Regarding industrial taxation, the general industrial tax decreased from 30 percent to 25 percent, while banking, telecom, and oil corporations remained at 35 percent.

Double taxation agreements have been enacted and can lessen even more the tax burden on capital gains. This is especially true for investors working in Angola and Portugal, as the total tax to be paid can be reduced to 5% when it comes to technical, managerial, or consultancy services. Portugal also has double taxation treaties with countries like South Africa and Cape Verde, while Angola has started introducing similar treaties with the UAE.

The personal tax rates are amongst the less favorable ones, as they have increased from 17 percent to 25 percent. However, these changes have the potential to relieve those people on the lower thresholds of income, which is known to be a critical objective of the current governmental authorities.

Regarding property tax, the Urban Property Tax Code has been deleted from the legislation along with all the provisions included within it. The new regulation states that both rural and urban properties can be subject to taxation and that the applicable rates are variable in relation to the location.

These changes are demonstrating the huge modernization aim that has been constant in all Angolan governments since the end of the civil war, and the fact that they are already in place is able to prove the effectiveness of authorities at introducing these groundbreaking changes.

However, it is worth noticing how Angola has been able to conduct amazing financial initiatives that have resulted in great performances and that contribute to long-term stability within the country. It’s precisely this evolution that has lead international agencies like Moody’s to finally sit Angola at the big table of financial leaders in Africa.

At Mundo, we know first-handedly how Angola represents a tremendous investment opportunity for foreign investors throughout the world. Why? Thanks to our partners, one of the greatest financial consulting agencies currently working in Africa and offering capital holders good opportunities. 

Our team of professionals has a large investment portfolio in the region, focusing on presenting clients across the globe with impressive business options regardless of the business sector at hand. Among such options, we can highlight:

-Consulting partnerships

-Transaction services & funds

-Infrastructure projects

-Commodity trading

-Energy-related business

-Lobbying & Conferences

At MUNDO, together with our partners, we are creating an enhanced investment environment for clients to plan their strategic operations in countries often discarded due to ignorance or prejudice.