Chinese Return to Angola After Currency Crisis Caused Exodus

(Bloomberg) -- Angola is attracting renewed interest from Chinese business owners since it lifted curbs on money transfers, following an exodus of tens of thousands of Chinese amid an economic crisis.

Africa’s second-largest oil producer introduced foreign-exchange policies that have made it easy to transfer money legally, Xu Ning, chairman of the Angola-China Industrial and Commerce Association, said in an interview in the capital, Luanda. That’s drawing a “new group” of companies from China to Angola, mainly in the industrial sector, he said.

“The new government is doing things that make it safe to invest in Angola,” Xu said. “We’re much better than before.”

Angola has had the highest number of Chinese workers of any country in sub-Saharan Africa for almost a decade, reaching a peak of 50,526 in 2013, data from John Hopkins University’s China-Africa Research Initiative show. These figures don’t include traders, shopkeepers and independent business owners.

More than 100,000 Chinese workers, traders and businessmen left the country after the 2014 oil-price crash triggered an economic crisis and froze most construction projects, according to Xu. Relying on oil for more than 90% of exports, Angola kept a tight grip on its currency even as dollars ran dry, leaving hundreds of companies struggling to pay overseas suppliers.

Arbitrary Detentions

Under President Joao Lourenco, who assumed office two years ago, the central bank eased restrictions on money transfers and it’s become more appealing for businesses to get dollars from official channels, according to Xu. Today, the official exchange rate for the kwanza is 369 per dollar, compared to a black-market rate of 530 per dollar, according to data compiled by Bloomberg. That compares to an official rate of about 166 kwanza per dollar and a street rate that was twice as high in September 2017.

Another significant change is that Angolan immigration officials have stopped arbitrarily detaining Chinese nationals and that the police responds to and acts on complaints, Xu said.

Chinese investors have been kidnapped in the past or fallen victim to other crimes, China’s ambassador to Angola, Gong Tao, told reporters on Tuesday, without giving details.

Angola’s public debt to China currently stands at $22.8 billion, with recent direct investments including an assembly plant for fishing vessels, an aluminum factory and a brewery, he said.

To contact the reporter on this story: Candido Mendes in Luanda at cmendes6@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Pauline Bax, Helen Nyambura

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