The Linkage Between Neo-Liberal and Macroeconomic Reform Policies and Banks’ Financial Intermediation in a Developing Commodity-Based Economy (The Case of Angola)

  • Carlos Aires Da Fonseca Panzo

Student thesis: Doctor of Business Administration


Purpose – This study aims to examine the linkage between neo-liberal and macroeconomic reform policies and banks’ financial performance in Angola, a commodity-based developing economy. The main objectives of this study are to i) examine and explain how banks in Angola experienced high returns while providing low levels of financial intermediation, and ii) provide a conceptualisation of financialised banks’ business model in the context of a commodity-based developing economy. Methodology – Empirically, on a sample of eleven Angolan banks over the period of 2005 to 2019, the study explored macroeconomic and bank-specific factors to determine the financial intermediation, including the novel financialisation ratios. The case study methodology and mixed method are applied in this study to assess the influence of fiscal and monetary policies on Angolan banks’ financial performance, including the impact from adopting the Basel II and III principles and guidelines. Findings – The study findings support the financialisation propositions regarding contemporaneous banks’ business model. In Angola, it was found that banks’ profitability is determined by yields from government debt securities and fees from foreign currency trading whilst income from financial intermediation only represent 32 per cent of average total return over the period of 2005 to 2019. In fact, Angolan government borrowing activities and ex-ante sterilisation mechanism crowded-out the private sector in the credit market, undermining the efficient allocation of financial resources in the non-oil economy. Practical implications – This study advocates the need for the Angolan government to revisit its macroeconomic policies. Mainstream macroeconomic reform policies, patronaged by the International Monetary Fund and World Bank, adversely affect efficient allocation of financial resources in developing commodity-based economies. Those policies must consider the particularities of developing commodity-based economies, which are commonly dollarised and have fiscal and monetary stances very sensitive to commodity price volatility. Originality – This study is, as far as the author is aware, the first to research banks’ financial performance in developing commodity-based economies (specifically, the case of Angola) by approaching the enquiry through political economy and financialisation analytical framework. Moreover, it is the first study to decompose the Angolan banks’ net income to calculate the novel financialisation ratios.
Date of Award1 Aug 2023
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorIsmail Erturk (Supervisor)

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