Angola's de-dollarization drive
The country’s radical programme has put pressure on the banking sector, which in its short existence has relied heavily on the business brought in by foreign exchange. How can banks stay afloat with a lack of dollars in the system?
Luanda, Angola. A halving of oil prices last year has increased hardship in Angola, one of the world's most unequal countries
The sky outside the Banco Angolano de Investimentos (BAI) head office is ominously grey and has dulled the room in which João Fonseca, executive director, sits.
His mood reflects the room’s hue. Fonseca and his team have been working tirelessly to straighten out the bank’s balance sheet, which, he admits, was “heavily reliant on foreign exchange”. When the de-dollarization of Angola’s economy was stepped up last year, coinciding with the global collapse in the oil price, a dearth of dollars in the country put BAI in a tricky situation.
“It has been nonstop over the last 10 months, and we have been doing everything we can to mitigate against foreign exchange and liquidity risk at a time when dollar liquidity is low. It’s what we spend every day doing,” he says. There is a lot of work for BAI to do at this juncture in Angola’s economic development.
In stark contrast, Emidio Costa Pinheiro, chairman of the executive committee at Banco de Fomento Angola (BFA), seems well-rested after returning from a break overseas.