Angola's New President Has $500 Million Bill From World Airlines
Angola's New President Has $500 Million Bill From World Airlines
(Bloomberg) -- Angola still owes more than $500 million to international airlines including Emirates, Deutsche Lufthansa AG and Air France-KLM, one of many items in the in-tray of new President Joao Lourenco as he tries to revive the economy.
Africa’s second-biggest oil producer is withholding repatriation of the funds amid a persistent shortage of foreign-currency reserves, according to the International Air Transport Association. Alexandre de Juniac, the industry body’s chief executive officer, has this week held meetings with Angolan government ministries about how to recover the cash, IATA said in an emailed statement.
Airlines have been struggling to get ticket revenue out of oil dependent countries such as Angola, Nigeria and Egypt after a 2014 collapse in the crude price dried up reserves of dollars, euros and other major currencies. Emirates said in October 2016 it could scrap flights to some African locations, and followed up on the threat in July when it cut journeys to Luanda, the Angola capital, from Dubai to three a week from five.
The lingering problem is one of a number of headaches for Lourenco, who became president in September after ending the almost four-decade rule of Jose Eduardo dos Santos. He’s vowed to fight corruption and end state monopolies, and has earned the nickname “relentless remover” after firing two of dos Santos’s children from senior positions at the state oil company and sovereign wealth fund.
Angola has let its currency fall about 18 percent this year after committing to scrapping a peg to the dollar that’s been in place since April 2016. Lourenco needs investment from foreign companies including airlines as he seeks to revive an economy forecast to expand 1.1 percent in 2017 from zero the previous year, according to the 2018 budget. That’s the worst performance since the end of a protracted civil war in 2002.
Other airlines waiting for cash are Ethiopian Airlines, South African Airways, Air Namibia and Air Brussels. Angola’s national bank has pledged “to find a practical solution to release blocked funds,” De Juniac said.
To contact the reporter on this story: Benjamin Katz in London at bkatz38@bloomberg.net.
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John Bowker
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