Video: National Bank of Angola’s David Carvalho on reserves allocations to Brics

With its reserves swelling from buoyant commodity revenues as well as a ‘peace dividend' after years of civil war, Angola is reassessing where to put its reserves money, according to David de Carvalho, National Bank of Angola's manager of foreign reserves.

Speaking on the sidelines of Central Banking's National Asset-Liability Management Africa 2011 event, de Carvalho says he increasingly views emerging markets as an attractive alternative to developed world sovereign debt when it comes to the risk/ return profile for Angola's reserves management. He is also reassessing the country's commodity investments.

De Carvalho says the collapse in confidence in the ability of a number of eurozone countries to repay their debt is "a great worry for us". In part that concerm is related to the debt crisis in Europe. But a bigger fear is the transmsstion of the debt crisis into reduced economic trade output due to a lack of confidence among market participants.

By contrast, de Carvalho says he is "very optimistic about the emerging markets", adding the China "is a positive story" and countries such as Brazil and South Africa look attractive as does gold in the medium to long term. The Angolan central bank reserves chief is also looking to invest in the debt of multilateral entities in Africa.

"If you are not able to revisit guidelines, strategies or benchmarks, you are not able to deal with changes in the global economy," de Carvalho says.

However, de Carvalho adds that Angola has not reached a sufficient level of reserves yet where national debt and funding for urgent development needs would be considered under control, meaning it is unlikely to set up a sovereign wealth fund any time soon.