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Banking

Angola’s rulers mull over their options

Angola has all the characteristics of a 21st-century petro-state: an extravagant property market, a corporate sector dominated by government-related entities and, now, a sovereign wealth fund. But can the country afford to embrace Arab Gulf-style state capitalism?

Property prices are wobbling in Luanda, the capital of Angola, Africa’s second-biggest oil producer. Even so, prices remain high enough to make much of London or New York’s real estate look like a bargain.

This year, Luanda dropped to second in the rankings of the world’s most expensive cities for expatriates, according to an annual poll by human resources consultancy Mercer (Tokyo is now first).

One Portuguese banker working in his country’s former colony boasts that he recently renegotiated the rent of his two-bedroom apartment down to $8,000 a month; it was $12,000 two years ago. Such adjustments mean that Luanda’s city centre is now cheaper, if only slightly so, than London’s haven of the super-rich, Mayfair. But Angola is a country where most people live on less than $1 a day.

Luanda’s booming construction sector is beginning to release more property on to the market. As the crunch in housing supply eases, expatriates say they can now get away with paying only six months’ rent in advance rather than a year.

Construction in Luanda has been too focused on the higher end, and up-front rental payments of up to $50,000 are still enough to make all but the wealthiest wince.

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