Angola: Where did all the money go? Part 3, the China connection
It was great timing: China was awash with dollars, Angola needed to rebuild. China delivered almost $50bn in oil-backed infrastructure loans. General Kopelipa was at the heart of it.
[In this third part to our investigation into Angola’s missing billions, we look at the relationship with China.
For part one on Jean-Claude Bastos de Morais click here, for part two on Sonangol click here, for part four on Portugal click here] for part five on the fightback click here.]
Although Manuel Vicente at the helm of state oil company Sonangol had neither a combat record during the war nor a longstanding membership of the ruling MPLA, he had strong contacts with some of the top military and intelligence officers.
His ties to Dos Santos’s top security adviser are a case in point.
Common business interests and a taste for the finer things in life helped build friendships.
“Vicente and his friend General Kopelipa would take a plane to France to pick up cases of wine from the Pétrus chateau in the Bordeaux region,” said a business colleague. At more than $2,500 a bottle, it is an expensive wine.
The two also shared interests in China-Angola business, the main driver of the post-war reconstruction effort.
As head of the Gabinete de Reconstrução Naçional, General Manuel Hélder Vieira Dias Júnior, known as ‘Kopelipa’, controlled that rebuilding programme, and as Dos Santos’s closest adviser, he was also the regime’s security capo di tutti capi.
Although the second-most powerful man in the country, Kopelipa was rarely in the public arena. To his irritation, he made news in Portugal when he bought two port wine estates in the Douro Valley without visiting them first.
A dapper man with a taste for well-cut Italian suits, he would glide into high-level negotiations and whisper into the ear of the most senior official before gliding out.
A top diplomat who used to go swimming with Kopelipa said he seemed to have no interest in Marxism. “We would sit on the beach and he would say: ‘Look at us, we’re just like you guys, we want to do business and fix the economy.’”
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But Kopelipa blamed rebel leader Savimbi’s war for most of Angola’s problems.
As Angola became the leading supplier of crude oil to the roaring Chinese economy in the early 2000s, and by turns Beijing’s biggest trading partner in Africa, it set up a barter model.
The China-Africa Research Initiative reports that China delivered loans to Angola worth $42.8bn between 2000 and 2017. That meant resource-backed loans from Beijing to finance roads and power stations to be built by Chinese companies.
The common point in resource-backed loans was opacity and off-budget spending. Billions went unaccounted for on what the IMF calls “quasi-fiscal operations”.
An official told us: “that means revenue that Sonangol received but which never made it to the Banco Naçional de Angola”, with its imposing colonial-era headquarters overlooking the ocean.
Professor Alves da Rocha of the Catholic University in Luanda points to findings by its Centre for Studies and Scientific Research that some $28bn from state budgets between 2002 and 2015 went unaccounted for.
Initially, there was a sense of organised chaos in the meetings with Chinese officials. “So we arrive in China and for the next week we had stretch limousines and police motorcycle outriders,” recalled a banker on one of the early trips. Interpreters were at a premium: “Crazy […] [in] meeting after meeting […] a lot would get lost in translation.”
Suddenly everything scaled up, he said. One bank had been doing small deals with small hedge funds in the US, then it was walking away with $180m of business. After two years, it had done $2bn worth of deals with China.
There was a synchronicity between China and Angola, the banker said. “The reality was that China found itself in a moment when they were awash with dollars […] so they had money to spend and they had the right skills and all these people they could send overseas.” And Angola’s oil was the essential feedstock for those ties.
The projects became more and more grandiose, like the $3.5bn spent on the Kilamba Kiaxi city about 30km outside Luanda, and the sprawling Luanda-Bengo Special Economic Zone with 76 factories, most of which are dormant for lack of inputs and local skills.
This year, Lourenço’s government has announced plans to sell off parts of the zone to private companies.
Looking back, the senior government official said: “There is plenty of blame to go around. There is the inefficiency of our decision-making system, the patronage in the bureaucracy. […] There’s also a little bit of responsibility [for] our partners, including the Chinese, who were involved in the infrastructure work.”
Eventually it comes back to Angola, he concluded: “In the end, we were the loan takers and decision takers, so oversight needed to have taken place.”
Although Kopelipa may find it difficult to adjust to the new era, his name is yet to surface publicly in the spate of financial investigations announced by Lourenço.