Angolan Bank BFA Raises $239 Million In Country's Largest-Ever IPO

Banco de Fomento Angola SA (BFA), an Angolan banking giant, has raised $239 million in the country’s largest-ever initial public offering (IPO). The public offering represents a key milestone for the Angolan government’s privatization program in a state-dominated economy. Amid economic issues stemming from Angola’s heavy reliance on crude oil exports, the government has sought to reduce its role in the economy and encourage more private activities. 

• Angola has historically been a state-dominated economy reliant on oil and gas exports, as well as small quantities of diamonds. However, with significantly reduced oil production and falling diamond prices worldwide, Angola faces lower revenue against high public debt, straining government spending. 

• Angola is Africa’s second-largest oil exporter, producing around 1 million barrels per day, half of its 2 million barrels per day peak in 2008. Lower oil production, coupled with a growing population, high debt, and increasingly expensive fuel subsidies, has caused a fiscal crisis for the Angolan government. 

• Fiscal pressures have spurred Angola’s government to boost non-oil sectors by reducing its role in these sectors and encouraging private businesses to fill the gap more effectively. In 2023, the government announced an ambitious plan to privatize 73 state-owned assets by 2026, including the national oil company, Sonangol, the country’s economic golden goose, which has struggled under lower oil production, high debt, corruption, and mismanagement. 

BFA sold a 30% stake to public investors for $239 million. The sale drew over five times the demand for available shares, according to Angola's stock exchange BODIVA. Proceeds went to BFA's existing shareholders, including state-owned telecoms firm Unitel and Portuguese investment bank Banco BPI.

Angola held its first-ever IPO in 2022, when Banco BAI, a BFA rival, raised $94 million by selling 10% of its shares. Post-sale, state-owned Sonangol remains a major Banco BAI shareholder.

• The Angolan government has set a 2026 target to list Sonangol, the country’s biggest company by revenue, on the public markets. With plans to offer up to 30% of Sonangol shares to investors, it could surpass BFA’s record IPO haul by many multiples.