Angolan Bank BFA Set for Country’s Biggest Ever IPO as Nation Accelerates Economic Transformation

One of Angola’s top banks BFA will launch the country’s biggest ever initial public offering on Friday, seeking to raise as much as $240 million as the government looks to kick-start a privatisation drive that could reshape the Southern African nation’s economic landscape.

The Southern African oil-producing country has been gradually opening up its state-dominated economy to more private investment, with a handful of IPOs on the local stock exchange since the first listing in 2022. This landmark BFA offering represents a critical test of investor appetite for Angolan assets amid the continent’s evolving financial markets.

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Strategic Shareholders Exit as Market Opens

Angolan telecoms company Unitel, controlled by the state, is selling a 15% stake in BFA, while Portuguese bank Banco BPI, a unit of Spain’s Caixabank, is selling a 14.75% stake. Currently Unitel owns roughly 52% of BFA and BPI 48%.

The IPO will run from Friday until September 25, with shares priced between 41,500 kwanzas ($44.8) and 49,500 kwanzas, according to Chief Financial Officer Francisca Ferrao Costa. The offering includes a 2% employee allocation, signaling the government’s commitment to domestic inclusion in the privatization process.

Market Development and Capital Formation

BFA Chief Executive Luis Roberto Goncalves told Reuters the IPO aimed to boost the development of Angola’s capital markets, which have remained underdeveloped compared to regional peers.

“The strategy defined by the shareholders is to diversify and expand the participation of institutional and private investors,” Goncalves said in an interview. “This operation is an excellent opportunity to attract international investors, given the size of the offer.”

The bank’s strong financial performance provides a solid foundation for investor interest. BFA made a net profit of 205.8 billion kwanzas ($225.67 million) last year, with an impressive return on equity of 33.7%, the bank said in a presentation to investors on Thursday.

European Banking Compliance Drives Exit

BPI has been trying to sell its stake in BFA since 2017 following the European Central Bank’s recommendation that it reduce its exposure to Angola. The Portuguese bank, acquired by Spain’s Caixabank in 2017, has faced regulatory pressure to minimize its African operations, making the IPO a strategic necessity.

CaixaBank has faced ongoing pressure from the European Central Bank over its Angolan exposure, and reducing its share to 33.1% helps free capital while maintaining a significant minority position. Despite the challenges, BFA contributed €39 million to BPI’s 2024 earnings, making Angola profitable despite currency volatility.

BODIVA Exchange Poised for Growth

BFA will be the third Angolan bank listed on the BODIVA exchange after BAI and Caixa Angola, marking another milestone for the country’s nascent capital markets. The government hopes BFA’s IPO will encourage more listings as part of its broader economic diversification strategy.

BODIVA was founded in 2014, but with Angola’s economy dominated by state companies – a legacy of its socialist past – it has mainly served as a market for government bonds. The exchange currently trades an equivalent of $2 billion annually in local currency and has 23 commercial banks and two brokerages as members.

The stock exchange expects the number of listed companies to soar from 4 to 10 by 2027, with major state-owned enterprises including diamond company Endiama and oil giant Sonangol preparing for public offerings.

Economic Challenges and Opportunities

The IPO comes at a challenging time for Angola’s economy, which faces significant headwinds including inflation projected at 27.5% next year and a currency that lost 37% of its value in 2023. However, the country has shown progress, attracting $3.8 billion in foreign investment in 2023 while fiscal reforms reduced debt to 70.9% of GDP by 2024.

Angola’s economy, heavily dependent on oil exports, has been working to diversify following President João Lourenço’s reforms since taking office in 2017. The petroleum industry accounts for over a third of the country’s GDP, roughly 90% of its exports, and 70% of government budget revenues.

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Massive Privatization Program Accelerates

The government is preparing to sell a 30% stake in national oil champion Sonangol, seen as the crown jewel of the privatisation push, and shares in Unitel as part of its expanded PROPRIV program.

Angola’s ambitious privatization program, originally launched in 2019, has been extended through 2026 with plans to privatize 73 additional state-owned assets and companies. The first phase successfully privatized 96 companies between 2019 and 2022, raising $1.13 billion through public tenders, auctions, and IPOs.

Under the extended program, the government plans to complete privatization of Sonangol by 2026, along with telecommunications giant Unitel, national airline TAAG, and diamond company Endiama. These “crown jewel” assets represent some of the largest privatization opportunities in Africa.

Regional Context and Investment Climate

Angola’s privatization efforts reflect broader trends across Africa, where governments are increasingly seeking to reduce state control of economies and attract private investment. The country has made significant strides in improving its investment climate, rising 46 places in Transparency International’s rankings since 2016.

The National Bank of Angola has abolished licensing requirements for foreign investor capital imports and removed requirements for licenses to export capital from securities sales, making it easier for international investors to participate in the market.

International Banking Sector Interest

The BFA IPO represents more than just a domestic financing exercise—it serves as a strategic tool to reposition Angola’s financial sector and reduce the country’s reliance on oil exports. The bank’s hybrid ownership structure, with the Angolan state holding an indirect 51.9% stake through UNITEL and Portuguese bank BPI owning 48.1%, balances local control with international expertise.

Global underwriters and investors are increasingly participating in high-growth African markets, with major international banks showing interest in similar offerings across the continent. This trend could enhance the IPO’s credibility and liquidity while demonstrating international confidence in Angola’s reform agenda.

Future Market Development

The success of BFA’s IPO will be closely watched as a barometer for Angola’s broader privatization program and the viability of its capital markets. BODIVA’s leadership has expressed confidence that the exchange can become a key driver of national economic growth, capable of channeling domestic and international savings into financing the economy.

The exchange has implemented international financial reporting standards and established active oversight mechanisms to enhance credibility and attract foreign institutional investment. Plans for a Settlement Guarantee Fund will further enhance security and make Angola a more attractive destination for international capital.

Strategic Economic Transformation

Angola’s privatization drive represents a fundamental shift from its socialist past toward a market-oriented economy. The country aims to position itself as a regional financial hub, reducing its vulnerability to commodity price volatility through economic diversification.

The timing aligns with pan-African economic integration efforts, as African nations increasingly privatize state-owned enterprises to create opportunities for cross-border investment flows. This trend mirrors successful liberalization efforts in countries like Nigeria and Kenya, where privatization has spurred significant foreign investment.

Market Outlook and Investor Considerations

Despite the promising fundamentals, the BFA IPO faces significant risks including Angola’s underdeveloped market infrastructure, regulatory uncertainties, and limited transparency in fund allocation. Oil price volatility remains a concern, with Angola’s 2025 budget assuming $70 per barrel while current prices hover below $60.

However, the offering represents a high-risk, high-reward opportunity for investors betting on Angola’s economic transformation. If executed successfully, the IPO could set a precedent for future privatizations across Africa, demonstrating how strategic capital allocation and economic diversification can drive sustainable growth.

The BFA IPO serves as more than a capital-raising exercise—it represents Angola’s commitment to economic reform and integration into global capital markets. For the broader African financial sector, the offering signals the continent’s growing sophistication and appeal to international investors seeking exposure to emerging markets with significant growth potential.

As Angola marks 50 years of independence in 2025, the BFA IPO symbolizes the nation’s economic evolution and its ambitions to become a regional financial center, marking a pivotal moment in the country’s journey toward economic diversification and sustainable development.

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By: Montel Kamau

Serrari Financial Analyst

5th September, 2025