April 12, 2017 / 1:30 PM / 5 months ago

Angola may require importers to buy insurance locally to stem capital outflows

LUANDA, April 12 (Reuters) - Angola may bring back a rule requiring importers to pay insurance locally instead of abroad for imports, as part of measures aimed at controlling the outflow of capital.

Hit by depressed prices of crude oil, Africa’s second largest oil exporter has been depleting its foreign exchange reserves to fund imports and pay down government debt. Oil output represents 40 percent of gross domestic product and more than 95 percent of foreign exchange revenue.

Hernani Paulo, a specialist at the National Insurance Regulatory and Supervision Agency (ARSEG), told Reuters on Tuesday the decree was awaiting enforcement after it was approved by the Council of Ministers.

“It is just waiting for enforcement which can happen any time,” Paulo said.

Angola has implemented a number of currency controls, including cutting the amount of hard currency travellers are allowed to take abroad, to cope with a foreign currency shortage that has led to a flourishing black market.

Until now, importers paid for insurance of their goods overseas in foreign currency, but the new rule will force them to pay insurance locally in the local kwanza currency.

“We need to protect our balance of payments,” ARSEG Insurance Supervision Manager Armando Costa told RNA, Angola’s National Radio Station. (Reporting by Herculano Coroado; Writing by Nqobile Dludla; Editing by Alison Williams)

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