Angola Banking & Financial Services Q2 2018
In terms of its contribution to the overall economic output of the Angolan economy over the next five years, in USDterms the contribution of the Angolan banking and financial services' sectors as a whole is expected to grow by an average y-o-yincrement of 10%. The outlook for the sector for 2018 is better than 2017 given that global crude prices are trading higher and thatthe newly elected Angolan president has so far demonstrated a greater commitment to reform and tackling corruption than manyhad expected. Positive contributions so far have seen the amendment of Angola's exchange rate regime which will ease FX liquiditywhich will bring much relief to the domestic banking sector, as well as the February 2018 announcement that the selling of aminority share in Angola Telecom (the state-owned telecoms company) would most likely be the Angolan bourse's first IPO. Whilstthe overall outlook has improved, we caution that longer-term growth opportunities within the commercial banking, insurance andasset management sectors will likely be significantly limited until their exposure to the oil sector is reduced. Furthermore, otherpertinent structural barriers are hindering growth opportunities within these sectors. These include the caps on foreign ownershipwhich exist within the commercial banking and insurance sectors; the low levels of formal financial inclusion of the Angolanpopulation; and the widespread poverty which prevails within the country. Other structural problems also exist which significantlylimit the Angolan banking sector's access to the international banking network and its ability to perform cross-border transactions.
This has occurred because Angola's AML/CFT legal oversight mechanisms are viewed as weak by global standards and coupled with
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