The approval, last February, of the new Law of the National Bank of Angola (BNA), granting it an independence that it did not have vis-à-vis the government, also enshrined, however, in the amended Constitution (under discussion at the time we were writing this text), is an extremely important step for the credibility of the country in the international scene.

The Angolan central bank is dependent at all levels of the State since the independence in 1975 and now enjoys the status of independent administrative authority, like most of its peers in SADC and in line with the best international standards.

It is as of now “prohibited to provide recommendations or issue directives to the governing bodies of the BNA on its activity, structure, functioning, decision-making, priorities to be adopted in the pursuit of the constitutional and legally defined attributions, by the Executive Power or by any other public entity”.

Just like in democracies we usually call advanced, or mature, the National Assembly is as of now involved in the process of appointing the governor of the central bank, thus taking the role of supervisor and regulator. Appointed by the President of the Republic, the “candidate” for the position shall as of now be heard in a specialized parliamentary committee.

The independence of the central bank and its leader from political power does not end here. The governor becomes irremovable, that is, his mandate no longer coincides with that of the Executive that appoints him and cannot be interrupted by purely political decision, and also no longer has a mandatory seat in the meetings of the Council of Ministers, just like in the most liberal and “advanced” economies.

The BNA thus acts as a macro-prudential supervisory authority, articulating actions “with other regulators of the financial system, preserving also the roles of foreign exchange authority, manager of international reserves, financier of last resort, supervisor and administrator of the system of payments in Angola and regulator and supervisor of banking and certain non-bank financial institutions”, as the governor himself recently explained.

The BNA’s independence was one of the missing bricks in building the international credibility of the central bank Angola so badly needs to attract more and better international investment and, not least, to access the relevant banking system.

The change is part of the structural measures pointed out by the International Monetary Fund (IMF) under the extended financing program that is ongoing until 2022, but it does not take away its merit or importance. The truth is that there was a commitment by the Government, which was met and which will bear fruit in the long term.

But there is more from the central bank as regards Angola’s capacity to attract investment, as witnessed this year in Angola. The BNA reiterated the elimination of the need to obtain central bank licensing regarding capital repatriation operations, including dividends or other income under the investment made in the country.

The clarification of the conditions for the repatriation of capital by foreign exchange non-residents, published in early March, determines that foreign investors will be able to freely transfer abroad the dividends, interest and other income resulting from their investments, repayments of shareholder loans and proceeds from the sale of shares listed on the stock exchange.

The same applies to the proceeds of the sale, when “the entity is not listed on the stock exchange and the buyer is also a non-resident foreign exchange entity and the amount to be transferred abroad by the seller is equal to the amount to be transferred from abroad by the buyer, in foreign currency”.

Foreign investors can invest in companies incorporated or recently established in Angola, without the need for any approval or licensing by the BNA, as well as in securities, except for investment in public debt issued exclusively to raise funds from foreign exchange residents.

The possibility of investing, or buying, public debt only from foreign exchange residents is pointed out by investors as something to improve, even more so as a stimulus to the secondary debt market, but Rome was not built in a day and Angola still needs to protect its (scarce) foreign currency holdings.

Critics may say that, if it is free, repatriation of capital will rely on the availability of foreign exchange. This is clear and could not happen otherwise. But this availability will be all the greater the more investment that occurs, especially in productive sectors with export potential.

The issue is trust, which is built over time and, above all, with investor-friendly standards. And this is something Angola is doing now. May this continue and go further, that’s something we wish.