Patrick Flaherty's blog

Notes about state-owned enterprises, sovereign wealth funds and other aspects of state capitalism.

Industry building in Angola

Sonangol, Angola's national oil company, is continuing to expand  their scope outside of the oil sector. Macauhub reports on their latest plan. 

Angolan state oil company Sonangol plans to set up 7 new industrial units in the Special Economic Zone (ZEE) and is seeking partnerships with private companies to carry them out, a group official said.
Bravo da Rosa, chairman of the Executive Commission of Sociedade de Investimentos Industriais (Siind), the arm of Sonangol responsible for coordinating and managing industry, said that the 73 new industrial units covered activities as diverse as metal mechanics, galvanisation, manufacturing prefabricated houses, recycling, glass production and even poultry production.

This isn't necessarily a bad thing. Sonangol is reasonably efficient, especially compared to the government and other SOEs. It has also has more trust from foreign companies than the Angolan government.  Foreign oil companies have given Sonangol even some acclaim for their operations in doling out contracts. With Sonangol running these various projects, there should be far more investors interested in partnerships. This should encourage foreign investors to take on the challenge of investing and operating in Angola when they know that Sonangol is the lead agency.  
But this should not be the long term solution. This is outside of Sonangol's purview and they have limited experience setting up factories and running anything related to some of the activities listed above (poultry production?). No other Angolan government agency does either so Sonangol's involvement is acceptable for now.   As much as Sonangol learned from observing  how oil companies operated in other countries, Siind should do the same by observing some of the better aspects of Sonangol. Once they gained this experience, Siind needs to branch out on their own. 

Patrick Flaherty a freelance researcher on sovereign wealth funds, state-owned companies and state capitalism. His email address is flahertypj@gmail.com and at @thatpolicyguy

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