Angola investor risk - Honeymoon is over as nation seeks infra financing

There are growing indications that the 'honeymoon' period of Angola's new government is over as investors become concerned with entrenched state corruption and the persistently weak state of the economy, according to a report by EXX Africa.

Recent contract cancellations of major infrastructure projects, officially touted as part of a transparency drive, are more likely motivated by a desire to seek fresh rents from foreign investors participating in those projects. 'White elephant' projects, like the new Angola airport, are undermining President João Lourenço's image as being reform-minded and transparent.

The government is seeking billions more in financing from Chinese banks to fund infrastructure expansion and to keep distressed state finances afloat. Just when concerns over Angola’s debt sustainability were calming, the government is committing to another massive Chinese debt pile-up. This bodes ominously for the repayment of arrears to foreign contractors and even Angola's ability to service its latest Eurobonds.