DON'T MISS : Talking Africa New Podcast – Ethiopia/Egypt: tension spikes despite Dam talks

Angola exposé: President João Lourenço breaks the mould

In depth
This article is part of the dossier: Angola: on the trail of stolen billions

By Patrick Smith
Posted on Wednesday, 13 May 2020 13:37, updated on Friday, 15 May 2020 22:25

imageSeries02_TAR1-Intro_732x419

An exclusive five-part series that looks into the campaign to retrieve Angola's stolen money at a time when the country's economy is suffering from a massive restructuring programme, record low oil prices and the impact of COVID-19.

In this five-part series, exclusive to The Africa Report, Zoé Eisenstein and Patrick Smith report on the campaign to find the stolen funds and how it is changing the politics and economy of Angola.

Part 1: Angola exposé: Joining the dots

Part 2: Angola exposé: The money chase

Part 3: Angola exposé: Portugal connections

Part 4: Angola exposé: International implications

Part 5: Angola exposé: Luanda life

Angola’s economy was already weak going into the coronavirus pandemic. A tough economic restructuring programme at the beginning of the year focused on the sale of state-owned oil and diamond assets, reform of the national budget and a push to claw back a substantial amount of the over $100bn reckoned to have been stolen from state coffers during the four decade presidency of José Eduardo dos Santos. Those plans now face the harshest of realities.

President João Lourenço’s government is desperately trying to mitigate the effects of a regional public health emergency, layered on top of crashing prices for its main export of crude oil, mounting costs of servicing its debts and chronic disruption to supply chains.

“Restructuring Africa’s fifth biggest economy”

At the centre of the economic strategy is finance minister, Vera Esperança dos Santos Daves, who has the gargantuan task of restructuring Africa’s fifth biggest economy. She was tasked by President João Lourenço with pulling the economy out of a four-year recession, diversifying it away from dependence on oil and then presiding over one of Africa’s biggest privatisation programmes.

As the pandemic started coursing across Africa in March, Daves explained to The Africa Report how the government intends to navigate the financial damage that the public health emergency is wreaking on regional economies as well as its plans to develop other sectors of the economy, beyond oil and gas. The government wants to engineer a renaissance of the country’s agriculture and manufacturing sectors.

READ MORE Angola: Finance Minister Vera Daves has one of Africa’s toughest jobs

Leading the charge for this restructuring was the government’s privatisation programme which the finance ministry is running alongside the state oil company, Sonangol. Launched last year, the first phase of the programme will sell hundreds of state-owned assets and companies, seen as non-strategic, many through Luanda’s capital market.

All the entities in this country need to see that there are rules and they should be respected.

It will include stakes in telecoms, fisheries and industrial companies. The first sales were due in April but now they are on hold as the government monitors international market conditions.

Prices for Angola’s crude oil “crashing”

Angola’s economy has been in a lockdown since 27 March which has pushed up consumer prices further, on top of new 14% rate for value added tax.

With international prices for Angola’s crude oil crashing by at least 66% since the beginning of the year, NKC Economics in South Africa forecasts that Angola’s economy will contract by 2.8% this year, slowly recovering top 0.9% in 2021.

The turmoil in the markets has pushed up the yields on Angola’s Eurobonds to over 25% according to Barclays Bank. This has forced the government to postpone its plans to another debt issue this year to offset other financial pressures. All this makes the government’s search for stolen assets still more critical.

In December, Luanda courts froze the national assets of Isabel dos Santos, daughter of the former President, triggering moves in other jurisdictions against her corporate holdings and those of others linked to that government.

READ MORE Angola: Isabel dos Santos indicted for embezzlement and more

Financial experts have told The Africa Report that at least $100bn may have been taken out of Angola’s economy as illicit financial flows over the past two decades.

Daves says the government is determined to identify more stolen assets and expects to see substantial resources being returned to the country. “All the entities in this country need to see that there are rules and they should be respected,” she says. “That’s the most important fight at this point.”

Retrieving assets taken illegally and injecting accountability into the system will also help the economy, says Daves. “We are seeing a lot of people going into jail. It’s not good to see but it’s important to send a message.”

Also in this in Depth:

Angola exposé: Joining the dots

In the first of a five-part series on Angola's campaign to find its stolen funds, we meet the man central to the country's hunt to retrieve its missing billions.

Angola exposé: The money chase

In the second of a five-part series on Angola's campaign to find its stolen funds, we explore one of the leading characters of this story: Isabel dos Santos.

Angola exposé: Portugal connections

In the third of a five-part series on Angola's campaign to find its stolen funds, we meet one woman who has dared to speak up against the elites in both Angola and Portugal.

Angola exposé: International implications

In this fourth of a five-part series on Angola's campaign to find its stolen funds, we explore the many companies, both in Angola and abroad, that may be implicated in the missing billions.

Angola exposé: Luanda life

In the fifth and final part of a series on Angola's campaign to find its stolen funds, we look at how far President Lourenço may go in his quest to right the wrongs of the past; even if it means creating division among Angolans.

We value your privacy

The Africa Report uses cookies to provide you with a quality user experience, measure audience, and provide you with personalized advertising. By continuing on The Africa Report, you agree to the use of cookies under the terms of our privacy policy.
You can change your preferences at any time.