Lisbon - Angola said on Tuesday it missed its own deadline to publish an investment policy for a planned $5 billion sovereign wealth fund due to a legal challenge, slowing efforts to diversify its oil-dependent economy.

Africa's second-largest oil producer announced plans for the fund in October, to invest in everything from water projects to sub-Saharan hotels.

It has made little progress since, frustrating investors who had hoped for clearer signals on potential spending.

There have also been worries about transparency after President Jose Eduardo dos Santos appointed of one of his sons to its board.

The fund's management said it had missed its goal to publish the policy by the end of March, saying the delay was caused by a legal challenge from an opposition party.

“The investment policy is in the final stages of being approved by the government,” the fund's board told Reuters. “We expect it will be approved in the short term.”

Angola's second-largest opposition party, CASA-CE, in December asked the constitutional court to overturn the creation of the fund, arguing the constitution did not allow Dos Santos to create funds without parliament approval.

The court rejected the claim, saying Dos Santos, who has been in office since 1979, had not overstepped his powers.

“While the fund may have long-term benefits in terms of stabilising the economy, its creation has prompted concern over how it will be administered,” risk consultancy Maplecroft said in a report in February.

“Angola has a notoriously poor reputation for a lack of transparency in government and business, and corruption is rife,” it added. - Reuters