Angola: Angolan President authorizes privatization of Multitel operator through public tender
July 26th 2021
The public enterprise privatization program initiated in 2018 continues in Angola. The Head of State has high expectations for the revival of his economy, which has been struggling since he came to power in 2017.
The President of the Republic of Angola, João Lourenço, has authorized the privatization by public tender of 90% of the capital of the company Multitel Serviços de Telecomunicações specializing in the provision of Internet services for businesses. Through the presidential decree n ° 113/21 of July 20, the Head of State repealed the decree n ° 185/20 of December 21, 2020 which provided for the privatization of Multitel through an initial public offer (IPO) on the Angola Debt and Securities Exchange (Bodiva).
João Lourenço explained in the new presidential decree that he had taken this decision because Multitel “ does not meet the necessary conditions ” for its privatization via the IPO procedure. The Angolan State’s share in Multitel amounts to 90%, via PT Ventures (40%), Angola Telecom (30%) and Banco de Comércio e Indústria (BCI) (20%).
The privatization of Multitel falls within the framework of the 2018-2022 national development program which embraces the reform of the public finances of the executive. By 2022, the state plans to sell its stakes in the capital of 195 companies to restructure and resize the public sector of companies in Angola.
Angola’s oil-driven economy has been in recession since 2016, causing its debt-to-GDP ratio to increase from 57.1% in 2015 to around 120.3% in 2020, according to the African Development Bank (AfDB) in its report “African Economic Outlook 2021: From Debt Resolution to Growth: The Road Ahead for Africa”.
The Covid-19 has further weakened the country’s economy. João Lourenço said at the launch of the privatization program in 2018 that the money from the sale of Multitel and several other actions of public enterprises would help ” promote macroeconomic stability, increase the productivity of the national economy and achieve a more equitable distribution of national income ”.
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