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Angola: President Lourenço losing support as recession bites

By Estelle Maussion
Posted on Wednesday, 27 January 2021 15:02

Bay of Luanda. © JOAO SILVA / NYT / REA

Just three years after his election, Angola's President João Lourenço is struggling to convince his people that he in indeed the 'man of change', as the country grapples with an economic and health crisis, and recession.

The pressure on the shoulders of the Angolan president, João Lourenço, is not letting up. With only two years left until the next general elections in 2022, the successor to José Eduardo dos Santos – who was elected in 2017 – is struggling to convince his people that he is the man of change.

In fairness to him, he has to deal with several challenges which include an economic and health crisis, unprecedented social discontent and exacerbated tensions within his party, the Mouvement populaire de libération de l’Angola (MPLA).

READ MORE Angola may be forced into debt restructuring in 2021

All the indicators are in red. In 2020, Angola – the continent’s second largest oil producer after Nigeria – recorded its fifth consecutive year of recession (-4%). The crisis caused by the fall in the price of oil since mid-2014 has been exacerbated by the Covid-19 pandemic. As a result, inflation soars (21% in 2020), the national currency (the kwanza) devalues, unemployment jumps (officially to 34%) and public debt increases (to 123% of GDP by the end of 2020).

A long-running anti-corruption crusade

At the same time, the country’s anti-corruption crusade has been a long-lasting one. Admittedly, it has led to a number of blows: the preventive freezing of the assets of Isabel dos Santos, the daughter of the former president, at the end of 2019 in Angola and at the beginning of 2020 in Portugal; the sentencing of the son of the former head of state, José Filomeno dos Santos, to five years in prison for fraud, money laundering and influence peddling in August (an appeal was lodged); the recovery of assets from former close associates of José Eduardo dos Santos, Generals Dino (Leopoldino Fragoso do Nascimento) and Kopelipa (Manuel Hélder Vieira Dias) in October.

READ MORE Angola’s anti-corruption crusade tide turns against João Lourenço

However, these newsworthy victories do not hide the weaknesses in the fight against corruption, which appears increasingly selective. For example, the president’s chief of staff, Edeltrudes Costa, has managed to retain his post despite being suspected of a conflict of interest and enrichment through obtaining public contracts. This triggered criticism from the opposition and youth protests, which were repressed by the police.

This is similar to what happened to Manuel Vicente, the former vice-president of dos Santos, who remained close to Lourenço and who has been granted immunity until 2022.

Such a heavy debt to China

The first of Lourenço’s tasks for this year will be to regain the confidence of the Angolan people, who have become disenchanted by his unfulfilled promise of hope and change. For some observers, the challenge is to avoid a social explosion. Strong signals should be sent.

READ MORE Angola: Isabel dos Santos forced to pay $600m in damages by Paris court

On the political front, it will be a question of finally setting a date for the first municipal elections in the history of the country, often postponed by dos Santos and one of Lourenço’s campaign promises.

On the social front, the president would do well to rethink his police and judicial response to unrest while guaranteeing real freedom of speech in the media.

READ MORE China’s Angola relief proves Africa can withstand Zambia default

However, it is on the economic front that the battle will be toughest, especially on debt management. While Angola will benefit from the moratorium granted by the Western G20 countries until June, the country still has to negotiate with China, its main creditor. According to the finance minister, Vera Daves, a debt relief deal of $6bn to be paid back by 2023 is envisaged. However, Angola owes Beijing an estimated $20bn in debt.

A president alone

This debt burden, in addition to the economic and health crisis, complicates the progress of the numerous reforms launched by Lourenço. The long-awaited diversification of the economy is expected to be put on hold as the government is forecasting zero growth for this year and struggles to maintain its level of oil production and associated revenues.

Above all, the series of announced privatisations – which will encourage the arrival of new foreign players and the emergence of solid national operators – risks selling out the country.

READ MORE Angola exposé: President João Lourenço breaks the mould

In such a context, “JLo” needs allies. However, despite the reaffirmed support from international donors, the president seems to be alone. The growing number of exonerations that he is granting within his administration shows that he is still looking for reliable people.

The increased tensions within the MPLA demonstrate the reluctance to embark on a more transparent mode of governance. Constructive dialogue with the opposition remains impossible. To break the deadlock, Lourenço – a product of the old system – must decide between continuity and change.

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