Boost for Angola as JP Morgan returns to dollar clearing

The global investment bank JPMorgan has confirmed it will provide dollar clearing services in Angola, becoming the first US bank to return to Luanda after a decade of absence from the local market.

Most major banks stopped providing dollar clearing services to Angola – which allow domestic banks to settle transactions involving US dollars – about a decade ago over concerns that endemic corruption would make it difficult for foreign institutions to comply with anti-money laundering and other compliance regulations.

While the Angolan market still presents risks for global banks – in October last year the Financial Action Task Force (FAFT) placed the country on its “grey list,” meaning it is subject to increased monitoring for illicit financial flows – JPMorgan’s re-entry into the market suggests international players may be gaining confidence in Angola’s reform efforts.

M’zée Fula Ngenge, an economist and investment strategist based in Luanda, tells African Business that “JPMorgan’s direct dollar clearing for Angola marks a critical juncture in its financial reintegration, signalling international validation of its reformed economic governance.”

“This partnership reduces transactional friction and enhances liquidity access for the oil-dependent economy, though it simultaneously subjects Angolan institutions to intensified international regulatory scrutiny,” he adds.

“While not a panacea for structural economic weakness, it represents a necessary advancement for global market participation and should be considered as a step in the right direction.”

Confidence in reforms

Kenneth Hogrefe, co-founder of Angola-based investment consultancy firm Victoria Capital, also notes that this move will help boost Angola’s reputation in the eyes of foreign investors and potentially open up new capital flows.

Hogrefe says JPMorgan’s decision “signals renewed international confidence in Angola’s financial reforms and opens critical pathways for trade, investment, and correspondent banking.”

On a practical level, he notes that “by restoring direct access to USD transactions, it reduces operational friction [for businesses] and enhances Angola’s credibility in global markets.”

This development could also have important ramifications on international capital markets, where the country is planning to raise around $1.5bn through five- and ten-year dollar bonds as part of a $6bn financing plan for 2025.

Ngenge suggests that JPMorgan’s move could help Luanda access capital at more competitive interest rates and ease fiscal pressures, saying “this development substantially diminishes Angola’s sovereign risk premium by resolving key capital mobility constraints.”

JP Morgan’s Africa plans

Investment banker M’khuzo Mwachande also argues that this is a sign that JPMorgan, which has also provided a $1bn loan to Angola, “sees opportunity in supporting Angola’s debt issuance and the growing sophistication of financial markets in the region.”

The news comes at a time when JPMorgan is working on plans to expand the banking giant’s footprint on the African continent.

Mwachande says this “signals that major international banks are willing to re-engage with African markets, which could improve liquidity, reduce transaction costs, and make cross-border investment easier across the region.”

“For countries in Southern Africa and the wider sub-Saharan region, having US dollar clearing options available locally could support smoother capital flows, facilitate trade finance, and even encourage more foreign direct investment.”