Angola is still recovering from 27 years of devastating civil war which severely ravaged the country's political and social institutions. Angola has vast amounts of natural resources, with high oil prices in recent years helping the country recover from the civil war. The country has become the second most attractive destination for foreign direct investment flows on the African continent, with the government committing itself to attracting foreign investors by adopting a range of business-friendly measures and investing large amounts of its oil revenues in improving the war-torn infrastructure. However, the high returns are accompanied by high risks, the most potent being corruption. Corruption in Angola remains widespread, throughout government bodies, and accountability is limited due to a lack of checks and balances, lack of institutional capacity, and a culture of impunity. President dos Santos declared a policy of zero tolerance towards corruption in 2009, and there has been a groundswell of opinion recognising the 'crisis of integrity' in Angola. The momentum needs to be maintained to ensure that the will to combat corruption succeeds.

Positive developments in relation to corruption and investments:

• Transparency in the management of public funds has been recently enhanced thanks to the implementation of fiscal decentralisation and expenditure-tracking software.
• The government has set up investment promotion agencies with the aim of simplifying the investment processes and reducing registration times for companies.
• In March 2010, the Parliament passed the Public Probity Law, which obliges all government officials to declare their wealth. However, the information is not made public, limiting its positive effects.
• In May 2010, the Parliament passed a law to fight money laundering. The Angolan Central Bank is responsible for preventing and detecting money laundering.
• In December 2010, a new Public Procurement Law went into effect to encompass professional and public loyalty, impartiality and probity. However, observers deem the new law inadequate and lacking any real reform.

Risk of corruption:

• Foreign investors should note that they are often encouraged to partner with Angolan companies, many of which turn out to be front organisations for government officials whose integrity and accountability are frequently questioned by observers.
• Currently, the Angolan diamond sector, amid the partial clean-up of the oil industry, represents a new instrument for illegal income for members of high-ranking figures.
• The Angolan procurement system is considered a high-risk area for foreign investors as procurement laws are inadequately enforced, thus creating possibilities for procurement officials to abuse the system.
• The quality and integrity of the judicial system are reportedly degrading due to a lack of resources, and foreign investors should note that court rulings often favour local companies. The settlement of commercial disputes through Angolan courts is time-consuming and unreliable due to inefficiencies and a highly politicised and corrupt judiciary.