Copious oil and gas reserves and investor interest are driving Angola’s post-war boom, but the government faces growing demands for accountability and social equity. Read an extract from the opening of our special report on Angola.

Giant billboards bearing slogans about national reconstruction beam down over towns and cities across Angola. Approaching eight years since the end of its 27-year conflict, Angola is shaking off its war-torn image to the soundtrack of whirring cement mixers imported from China. The country is now rebuilding itself and emerging as a key economic and political player in Southern Africa.


Billions of dollars are being poured into infrastructure projects, repairing the war-damaged roads, bridges, railways, schools, hospitals and airports, in addition to the build-out for the upcoming African Cup of Nations for which four brand new football 
stadiums have been built. Fuelled by oil revenue and Chinese credit lines, Angola has enjoyed an unprecedented boom which has made it one of the world’s fastest-growing economies – that is, until the recession of 2009.


But international investors are still queuing up to grab a slice of the former Portuguese colony’s vast 
mineral and agricultural potential, and with its growing regional influence in the Gulf of Guinea and the Southern African Development Community, Angola is becoming a good friend to have. Raising Angola’s international profile, President José Eduardo dos Santos received visits in 2009 from US Secretary of State Hillary Clinton, South African President Jacob Zuma, Pope Benedict XVI, Russian President Dmitry Medvedev and Cuban President Raul Castro.


As one of China’s most important suppliers of oil and a recipient of 
billions of dollars in Chinese loans, Luanda’s relationship with Beijing tends to get the most attention. Alex Vines, head of the Africa programme at London-based think tank Chatham House, said the Sino-
Angolan relationship was often “misunderstood” and that while Angola has a good relationship with China, it was not all state-to-state funding. A large proportion of credit comes from the China 
International Fund, a private company with 
complex joint Angolan and Chinese interests.


As well as diversifying its foreign relations, the fall in oil prices at the turn of 2008 underlined the need for Angola to reduce its dependence on oil, currently the source of 90% of the country’s income. Angola hoped to withstand the full force of the economic crisis, but when the crude value dropped over $100 in a matter of months, its economy fell to earth with a thud.


Serious gravity 


GDP growth for 2009, which had been forecast at 11% by the government, is now forecast at 0.2% by the IMF, and international reserves plunged by nearly one-third in a matter of months at the start of 2009. 
Acknowledging the need for diversification, Dos Santos said in a rare public speech: “The crisis comes to reveal once more that the enormous dependence of our economy on oil and 
diamonds is not convenient and that there is a need to diversify the economy and to implement and promote investments in other sectors.”


Economists have welcomed this strategy, but the more difficult task is to realise it. Salim Valimamade, director of the Centro de Estudos e Investigação Cientifica at the Catholic University of Angola, argues: “It is key that oil revenues are channelled into diversification investment. This process has already started, which is a good sign, and the non-oil sector is expected to grow significantly in the next 12 months.” Valimamade says that part of this growth could be caused by the post-war bounce, but adds that “the trend is good and I believe in the next one to two years we will start to see results from this investment. But it is crucial there is also investment in 
human capacity.”

Angola’s diversification programme has also seen it embrace the IMF for the first time, after years of rocky relations amid IMF criticisms of Angola’s management of its oil revenues. Ricardo Gazel, senior economist at the World Bank office in Angola, believes that a new loan – estimated to be worth $1.3bn – is more about Angola’s reputation than the loan’s monetary value. 
“Although the influx of foreign currency from such programmes is significant to support the balance of payments and international reserves, the 
positive credibility shock is even more important,” he says.


Angola’s banking sector continues its growth, with expansion in services and branches across the country. Some of the most remote shanty towns now have banks, even if most people living nearby have no money to invest or save. The majority have strong Portuguese links, such as Millennium Angola, Banco Espirito Angola and Banco de Fomento Angola, but South 
Africa’s Standard Bank hopes to open its first branch in 2010.

Plans for a Luanda stock exchange were put on hold due to the global economic crisis after a number of key companies who were expected to list, including the state oil company Sonangol, withdrew. There was also talk in 2008 of the creation of a sovereign wealth fund, but like the stock exchange, this appears to have stalled not surprisingly, considering the plunge in foreign reserves due to the fall in oil prices.


Politically, Angola appears to have left behind the catastrophic war years from the 1970s to 2002. Its September 2008 parliamentary 
elections – the first to be held in some 16 years – passed off peacefully. While some observers complained of “serious organisational weaknesses”, the poll was credited as being generally transparent and credible. The Movimento Popular de Libertação de Angola (MPLA), which seized the government at independence in 1975, won more than 81% of the vote, crushing its long-time war enemy and former rebel movement, União Nacional para a Independência Total de Angola (UNITA), which was left with just 16 out of 220 parliamentary seats.


The long-awaited presidential election has, however, yet to materialise. Expected in 2009, it has been delayed to allow the drafting of a new constitution. This has prompted opposition and civil society factions to accuse Dos Santos, Angola’s president for 30 years, of clinging to power. Slowly regaining its voice after its election defeat, 
UNITA, led by Isaías Samakuva, has been heavily critical of the government and its delivery of election pledges.


UNITA’s spokesman Alcides Sakala argues that “what we are seeing today in Angola is a small minority of people getting richer while there is a 
majority of people getting poorer and poorer and poorer. We welcome the IMF loan but the real question is, how is this money going to be used? We know how the oil money has been spent.”


Angola is indeed a classic example of the resource curse, a country which is so rich but still has so much poverty. In Angola’s case, the World Bank says that two-thirds of the population live on less than two dollars a day. One in six children die before they reach their fifth birthday and more than half the population has no access to sanitation. The government has 
acknowledged the challenges it faces in terms of tackling poverty, and since the end of the war, billions of dollars have been poured into social schemes including for health and education.

Anarchy and strategy


A new joint report from the United Nations Children’s Fund (UNICEF), the ministry of health and the World Bank is due to be published in early 2010 and is expected to show some improvements. Koen Vanormelingen, UNICEF representative in Angola, says: “There is of course a time-lapse between the moment that interventions are implemented and when you see the results. There is so much to be done at the same time that it gives the impression of anarchy and inefficiencies, but I do believe there is a sense of strategy and direction.”


David Sogge, an independent 
researcher linked to the Madrid-based think tank Fundación para las Relaciones Internacionales y el Diálogo Exterior, describes Angola as “failed yet successful” because of its poor record on governance and transparency, alongside its good record of continued economic growth.


His concerns are echoed by a number of lobby groups including Human Rights Watch, Global Witness and Partnership Africa Canada, which have all published damning reports of human rights abuses and corruption. As the debate around the new constitution intensifies, all these issues, and more, are being brought to light.


Civil society groups, for many years trampled on and insignificant, are gaining ground and becoming more vocal. While the number of journalists arrested for criticising the state is increasing, that they are criticising at all shows a turning tide of opinion.


Angola may be rebuilding itself physically, but the mental scars from the war are likely to remain for 
decades to come. A 2009 report by the Johannesburg-based Centre for the Study of Violence and Reconciliation (CSVR) and the Canadian non-governmental organisation 
Development Workshop warned of a failure in Angola’s post-war demobilisation and reintegration processes which had led to deepening poverty, inequality and social injustice.


CSVR’s executive director Adèle Kirsten says that “unresolved social justice issues from the past come back to revisit a country 20 to 25 years 
later. We have seen this in South 
Africa and are seeing it in Zimbabwe.” The people of Angola – all affected by the civil war through injury, death, lost loved ones and livelihoods – can only hope for an Angolan exception to that rule.

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