Tables of Modern Monetary Systems by Kurt Schuler ( Return to home page )


Angola

Political sketch

Independent from Portugal on 11 November 1975.

Portuguese explorers reached Angola in 1483 and Angola became a Portuguese colony on 1 February 1575. Until the 1890s Portuguese control was limited to the coast, but by the 1930s it included the whole of the country. Portugal received the enclave of Cabinda in 1885 as compensation for losing territory in East Africa. Until the 1800s slaves were Angola's most significant export; the Portuguese colony of Brazil was the most common destination for slaves. Portugal abolished slavery in its colonies in 1878, but forced labor continued until 1961. Angola became a Portuguese overseas province on 11 June 1951. Modern nationalist resistance to Portuguese rule began in the 1950s, and broke out in rebellion in 1961, shortly after neighboring Congo-Kinshasa (later Zaïre) became independent from Belgium. The Marxist-inspired Popular Movement for the Liberation of Angola (Portuguese initials MPLA) became the dominant force for independence.

In April 1974 democratically minded leftist military personnel in Portugal staged a coup against that country's dictatorship. Portuguese forces withdrew from Angola and other colonies in 1975. In Angola, a civil war based along ethnic lines soon broke out. The MPLA seized control of the coast and oil-producing areas, while the rival National Union for the Total Independence of Angola (Portuguese initials UNITA) and National Front for the Liberation of Angola (Portugese initials FNLA) controlled much of the interior. The MPLA was supported by the Soviet Union and Cuba; UNITA, by the United States and South Africa; the FNLA proved less durable than the other two groups. The MPLA established central planning of the economy, which continued until the 1990s; even now, government control of the economy remains extensive. The war economy in the area under UNITA control was also characterized by extensive government control. In 1991 the two parties concluded a peace treaty, but UNITA refused to accept the results of 1992 elections (the first multiparty elections since independence), which showed strong support for the MPLA. The devastating civil war continued until UNITA's leader, Jonas Savimbi, died on 22 February 2002. Angola participated in the civil war of neighboring Congo-Kinshasa in support of Laurent Kabila, and after he died, his son Joseph Kabila. Angola has had only two presidents from independence to the present (2005). Angola's main export is oil. Much of the revenue from oil exports has been siphoned by the notoriously corrupt government, at the expense the mass of Angolans, who are quite poor.

Wars since 1500

Dutch-Portuguese Wars in West Africa, about 1620-1655; Bakongo-Portuguese War, 1665; Angolan War of Independence, 1961-1976 (against Portugal); Angolan Civil War, 1975-1991, 1992-2002; Congolese (Congo-Kinshasa) Civil War of 1998-2003 (Angolan troops supported Kabila government).

Convertibility

Export of silver coins from Angola was prohibited apparently by a Portuguese decree of 15 September 1896 and definitely by Portugal, decree of 25 November 1909.

Portugal introduced exchange controls on 24 September 1914 and revoked them on 18 October 1937. There were also a few controls from perhaps 1939 to 1947. Controls were intensified in the summer of 1947, made extensive on 9 February 1948, and removed on 1 January 1993, long after Portugal had ceased to have any colonies except the Chinese city of Macau.

The escudo, introduced in Portugal in 1911 and in its African colonies in 1914, was a chronically weak currency until the currency reform of 1928. During this period, the currencies of Angola and Mozambique frequently traded at a discount to the Portuguese escudo. The Banco Nacional Ultramarino, Portugal's private monopoly note-issuer for its colonies, was not required to keep its colonial currencies at par with the Portuguese escudo, though its revised charter of 31 November 1901 did require it to accept notes of one branch at any other branch at a discount of no more than 2%, except regarding Mozambique. (The bank did not issue notes in Portugal.) Transfers of funds to Lisbon became difficult and expensive. In Angola the premiums for transfers were as follows, according to various issues of Angola's Anuario Estadistica: 1925 (first year of data), 17.5%; 1926, 13.9%; 1927, 21.8%; 1928, 15.4%; 1929-1932, 2%; 1933-20 October 1948, 2.5%; 21 October 1948 onward, 1.5% (though from other issues of the same publication it seems this last rate may not have begin until 1952).

Angola imposed exchange controls with all other countries, including Portugal and its colonies, by Angola, Decree No. 366, 14 September 1923. These controls seem to have lasted until the Portuguese government imposed exchange controls on Angola in 1931 and Mozambique in 1932. Exchange controls applied to transfers to Portugal and its colonies as well as to other countries. Earners of foreign exchange had to relinquish a high share of earnings to locally managed foreign-currency funds and accept local currency instead. The funds rationed foreign exchange for imports according to a list of priorities. In 1948 the separate colonial foreign-currency funds were centralized in Lisbon. The currency reform of 1953 unified the Portuguese escudo and the currencies of the Portuguese colonies, making them a true currency area similar to the sterling area or the French franc zone (Portugal, law of 27 June 1953). A Monetary Fund of the Escudo Zone was established by Portugal, Decree-Law 44/703 of 17 November 1962 (reprinted in Banco de Portugal annual report 1962: 129-40). On 21 February 1963 Portugal issued a ministerial decree liberalizing capital m ovements in the escudo zone (IMF ARER 1963: 313). On 1 March 1963 measures were taken to organize a new payments system for the zone (IMF ARER 1964: 390). However, Angola and Mozambique were persistently in deficit to the fund. The result was that high-priority payments were settled immediately at 1 overseas escudo = 1 Portuguese escudo, while low-priority payments experienced delays, which were a form of rationing, until the funds were available to settle them at the official rate. Exchange controls on private transfers from overseas territories to Portugal were imposed by Portugal, Decree-Law 478/71 of 6 November 1971 (reprinted in Banco de Portugal annual report 1971, v. 2: 55-67).

Other

Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): 1976 (local currency debt, following independence from Portugal), 1985-2004 (foreign currency bank debt, related to civil war).

Angola experienced an economic crisis around 1902.

Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): Liquidation of the Banco de Angola e Metropole (headquarters Lisbon, Portugal, but it had some Angolan investments and its directors had other extensive personal investments there) in 1927, because the bank had been a front for the 1925 counterfeiting scheme of Alves Reis; moderate problems from 1991 in two state-owned banks.

No parallel market exchange rate data in Reinhart and Rogoff (2003).

References

Primary sources:

--Laws and decrees:

Angola. Gazette. 1845-present. Boletim do Governo Geral da Província de Angola (1845-1847); Boletim oficial do Governo Geral da Provincia de Angola (1847-1911); Boletim official da Provincia de Angola (1912-1927); Boletim oficial da Colónia de Angola (1928-1952); Boletim oficial de Angola (1953-1975); Diário da República (1975-present). Luanda: Impresa do Governo (1845-1911); Imprensa Nacional (1912-1975?); Administração da Imprensa Nacional de Angola (1975?-present).

Portugal. Gazette. 1715-present. Diário do governo (1715-1974); Diário da república (1974-present). Lisbon. Recent issues are online at <http://dre.pt/>.

--Publications of monetary authorities:

Banco de Angola. 1926-1975. Relatório e contas do Banco de Angola (1926-1969); Relatório e contas do Banco de Angola: situacão económico e financial de Angola (1970); Banco de Angola: relatório e contas (1971-1975). Lisbon: Banco de Angola. In English 1966?-1973? as Annual Report and Economic and Financial Survey of Angola. Lisbon: Banco de Angola.

Banco Nacional de Angola. 1991-present. Relatório annual. Luanda: Banco Nacional de Angola. (Although the bank began its existence in 1976, as the successor to the Banco de Angola, its first annual report was not until 1991.)

Banco Nacional Ultramarino. Annual report. 1865-1999. Relatório do Banco Nacional Ultramarino. Lisbon: Banco Nacional Ultramarino. In English as Annual Report, 1973-1999? Lisbon: Banco Nacional Ultramarino. From 1920-1960 a separate volume appeared, entitled Relatório do Governo do Banco, parecer do Conselho Fiscal, balanço e contas referentes ao exercício de ....

--Web site of the current monetary authority (viewed 10 January 2005):

<http://www.bna.ao>

--Other publications or Web sites:

Angola. Direcção Provincial dos Serviços de Estatística. 1942-1972? Anuário estatístico. Luanda: Direcção Provincial dos Serviços de Estatística.

Main secondary sources:

Banco Nacional Ultramarino. Serviço de Documentação, Arquivo e Biblioteca. 1977. Papel-moeda para Moçambique, 1877/1973. Lisbon: Banco Nacional Ultramarino, Serviço de Documentação, Arquivo e Biblioteca. (Reproduces the bank's charter.)

Braga Paixão, Vítor Manuel. 1964. Cem anos do Banco Nacional Ultramarino na vida portuguesa, 4 v. Lisbon: Banco Nacional Ultramarino.

Clarence-Smith, [W.] Gervase. 1985. The Third Portuguese Empire, 1825-1975: A Study in Imperialism. Manchester: Manchester University Press.

IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.)

Krause, Chester L., and Clifford Mishler. 2003. Standard Catalog of World Coins: 17^th Century, 1601-1700, 3^rd edition. Iola, Wisconsin: Krause Publications. (The series of the Standard Catalog of World Coins may be listed in library catalogs as under the authorship of Chester L. Krause.)

Moneteiro, Armindo [Rodrigues]. 1931. O problema das transferencias de Angola. Lisbon: Imprensa Nacional. (I have not seen this.)

Pick's Currency Yearbook. 1955-1977/79. New York: Pick Publishing. Succeeded by Pick's World Currency Report and later World Currency Yearbook.

Sousa, Luis Manuel Rebelo de. 1969. O papel-moeda em Angola (subsídios para o seu estudio). Luanda: Banco de Angola.

United States. Department of State. 1996. "Angola." 1995 Country Reports on Economic Policy and Trade Practices. Bureau of Economic and Business Affairs, released May 1996. At <http://dosfan.lib.uic.edu/ERC/bureaus/afr/960501Angola.html>, viewed 14 Novmeber 2005.

World Currency Yearbook. 1984-1990/93. Brooklyn, New York: International Currency Analysis. Previously called Pick's Currency Yearbook (1955-1979) and Pick's World Currency Report (1980-84). New York: Pick Publishing Corporation.

Monetary authorities: Angola

Dates	Type	Name	Source	Remarks
1772 -28 December 1845	government issue	cédulas em forma de letras (Treasury warrants in the form of drafts) of Junta de Fazenda (Angolan Treasury [headquarters Luanda, Angola])	Portugal, Instrucçoens, e methodo que devem seguir na escripturação das contas da Fazenda Real do Reyno de Angola os Officiais que Sua Magestade foi servido nomear para ali servirem no nova Junta da Fazenda, e Contadoria d'ella, 1772, published in Angola, Boletim Oficial, 1880-1881, cited in Sousa (1969: 9)	These government proto-notes issued in connection with the slave trade with Brazil depreciated after Portugal abolished the slave trade among its colonies in 1836. (Slavery was abolished in Angola in 1858.) They were made forced tender in 1845 (Angola, governor's edict of 1 December 1845). The first coins were introduced in 1694.
29 December 1845 -3 October 1865	government issue	assinados of Junta de Fazenda Pública (Angolan Treasury [headquarters Luanda, Angola])	Angola, governor's edict of 1 December 1845, cited in Sousa (1969: 15)	The name of these notes came from theassignat paper money of the French Revolution. Throughout their existence, the government notes repeatedly depreciated.
4 October 1865 -31 December 1900	government issue alongside private monopoly issue	Junta de Fazenda Pública (Angolan Treasury [headquarters Luanda, Angola]) alongside Banco Nacional Ultramarino (headquarters Lisbon, Portugal)	Portugal, law of 16 May 1864 chartering Banco Nacional Ultramarino, reprinted in Banco Nacional Ultramarino (1977: 20-2); Angola, local authorization for bank to operate, Boletim Oficial, 12 August 1865, cited in Braga Paixão (1964: [volume and page to come])	The Banco Nacional Ultramarino received permission to operate in Portuguese colonies (except, initially, Macau and East Timor). The bank had separately marked note issues for each colony. It was the first bank in Angola. It opened a branch in Luanda on 21 August 1865 (Sousa 1969: 42) and issued its first notes on 4 October 1865. Small-denomination vouchers issued by private parties to compensate for the lack of small coins (because of inflation by the government) circulated from 1881 (Sousa 1969: 54). They were illegal but were tolerated until outlawed by Angola, Portaria (decree) No. 98 of 1892 (cited in Sousa 1969: 65 n. 1).
1 January 1901 -12 May? 1921	private monopoly issue	Banco Nacional Ultramarino (headquarters Lisbon, Portugal)	Angola, Boletim Oficial No. 24, 1900, cited in Sousa (1969: 72)	By an agreement between the Banco Nacional Ultramarino and the Portuguese Minister and Secretary of State of Seas and Colonies made in 1895, the Angolan government eventually retired its notes from circulation, leaving the Banco Nacional Ultramarino as the sole issuer (Sousa 1969: 69).
13 May? 1921 -13 August 1926	government issue alongside private monopoly issue	Angolan Treasury (notes said "República Portuguesa, Angola") (headquarters Luanda, Angola) alongside Banco Nacional Ultramarino (headquarters Lisbon, Portugal)	Portugal, Decree No. 13, 7 May 1921; Angola, Portaria Provincial (provincial decree) No. 8, 13 May 1921; both cited in Sousa (1969: 89)	The government reintroduced (small-denomination) notes to finance deficits. For various reasons, small-denomination notes were a much more important part of the money supply than they are today. Angola's colonial government had a relatively large debt that eventually led to a financial crisis that was addressed by a rescue by the Portuguese government. The second bank was the Banco Colonial Português (headquarters Lisbon, Portugal), in Luanda, by 1924. It went into liquidation in 1925 or 1926 (Clarence-Smith 1985: 128).
14 August 1926 -27 January 1929	government note issue alongside central bank (with minority private ownership and commercial banking functions)	government Junta de Moeda (Monetary Board [headquarters Luanda, Angola]) alongside Banco de Angola (headquarters Lisbon, Portugal)	Portugal, Decree No. 12131, 14 August 1926; Decree No. 12124, 16 August 1926; both cited in Sousa (1969: 105)	Angola reorganized its financial system after inflation caused a financial crisis. The Junta de Moeda, a special body, took over issuance of small-denomination notes. The government-owned. Banco de Angola (created by Angola, Decree No. 364, 14 September 1923) took over issuance of larger-denomination notes from the Banco Nacional Ultramarino. Angola was the only Portuguese colony where Banco Nacional Ultramarino gave up note issue before the end of colonial rule. The Banco Nacional Ultramarino owned a minority share in Banco de Angola; the Angolan government owned the majority share.
28 January 1929 -12 September 1974	central bank (with minority private ownership and commercial banking functions)	Banco de Angola (headquarters Lisbon, Portugal)	Portugal, Decree No. 16430, 28 January 1929, cited in Sousa (1969: 115-16)	Abolished the Junta de Moeda after replacing old depreciated government notes with new ones that did not depreciate. The government henceforth confined itself to issuing small-denomination notes (under 5 angolares, replaced 1957 by escudo coins). The second durable bank was the Banco Comercial de Angola (headquarters Luanda, Angola) in Luanda, in 1956 (Angola,Anuário estatística1957: 239).
13 September 1974 -10 November 1976	central bank (with commercial banking functions)	Banco de Angola (headquarters Lisbon, Portugal)	Portugal, Decree-Law 450/74, 13 September 1974	The Portuguese government nationalized Portuguese-owned banks in Portugal and colonies after coup by democratic-minded left-wing military officers in Lisbon on 25 April 1974. On 14 August 1975, the so-called "capture of the banks" put all banks under strict Angolan government supervision (in effect, management) to stem capital flight.
11 November 1976 -19 April? 1991	monobank	Banco Nacional de Angola (headquarters Luanda, Angola)	Angola, Lei Orgânica do Banco Nacional de Angola, Law 69/76, 5 November 1976, cited in Banco de Angola Web site, viewed 10 January 2005	The Angolan government became the sole owner of the Banco de Angola and renamed the bank. The bank took over issuance of coins from the Angolan treasury. The government nationalized other banks soon afterwards, starting with the largest, the Banco Comercial de Angola, on 11 November 1976. Angola joined the IMF on 19 September 1989.
20 April? 1991 -present (2005)	central bank	Banco Nacional de Angola (headquarters Luanda, Angola)	Angola, Lei das Instituicões Fiancieras, Law 4/91, 20 April 1991, cited in Banco de Angola Web site, viewed 10 January 2005	The government separated the commercial banking functions of the Banco Nacional de Angola from its central banking functions and ended the government monopoly of banking.

Exchange rate arrangements: Angola