Oil sector reforms perpetuate Angolan oligarchy

 Sonangol

Angola’s oil company,  sonangol

from PEDRO AGOSTO in Luanda, Angola
LUANDA, (CAJ News) THE appointment of a team to oversee the transformation of Angola’s oil sector has turned out to be a continuation of a culture of patronage and oligarchy synonymous with the Southern African country’s political landscape.

Africa’s second largest producer of crude oil is setting up a new
regulator, to be called National Agency of Oil and Gas (NOGA), to manage all industry activities, including public tenders and representing the state in the sharing of profits from oil concessions.

Critics have slammed the composition of the group to lead the creation of NAGO, which is anticipated to start operations in 2020.

Carlos Saturnino, appointed as chairman of Sonangol, leads the group. National Oil director, Armadeu Azevedo, is the coordinator.

Jeorge de Abreau, who quit Sonangol in 2016 after Isabel dos Santos, daughter of ex-president, Jose Eduardo dos Santos, took over as chairperson.

Other members tasked with the creation of NAGO include Mario Lourenco, who is the son of former oil minister, and Gerson dos Santos, a member of the ruling People’s Movement for the Liberation of Angola (MPLA).

For years a key pillar in Angola’s oil-focused economy, Sonangol has been beset by scandal.

Former Angolan President José Eduardo dos Santos removed the company’s entire board and installed his daughter as chairwoman.

This raised allegations of nepotism and corruption but the then-leader said the move would ensure “transparency and apply global corporate-governance standards.”

A number of the former president’s children had also been appointed to government institutions.

The current president removed Mrs dos Santos but it was later alleged she transferred US$38 million (about R570 million) of the company’s money to an unnamed company in Dubai, United Arab Emirates (UAE).

Government anticipates NAGO will restore the oil industry from decline.

As the oil industry declines, meanwhile, the country’s debt has ballooned and Angola, albeit unofficially, slumped into an unenviable status as a heavily indebted poor country (HIPC).

The downslide to the undesirable rank coincides with critics questioning the commitment of the new administration of President João Lourenço to tackle corruption that took root during over 38 years of dos Santos at the helm.

Estimates by Loureco’s government that the government’s debt is over US$33 billion (about R495 billion), which represents more than 70 percent of Angola’s gross domestic product (GDP), means that technically, the continent’s second biggest producer of crude oil is in the HIPC bracket.

Angola’s toll is apparently heavier as figures exclude debts by
beleaguered oil parastatal, Sonangol.

Isabel dos Santos, daughter of the former head of state, was dismissed as head of the company. Allies of the current leader hold influential post at the fraught firm.

The accounts of Sonangol, said to be the epicentre of innate corruption, are months overdue.

According to the United Nations (UN) and World Bank, any time a country’s public debt hits or crosses 70 percent of its gross domestic product, then that country can be described as highly indebted, making it difficult for that country to settle its debts on time.

Over 30 countries from developing countries are in that category. Angola previously was an HIPC case but spiraling debts has Southern Africa’s biggest country by land size back in the quagmire.

The global downturn in the oil sector, the country’s economic lifeblood, exacerbates matters.

The International Monetary Fund (IMF) has stated lower oil prices and policies in the run-up to last year’s elections placed the economy under strain.

“A dramatic drop in oil prices that started in mid-2014 substantially
reduced tax revenues and exports, with growth coming to a halt and
inflation accelerating sharply,” IMF stated.

IMF subsequently advocated for the diversification of the economy away from oil to address vulnerabilities.

However, debts have spiraled, parallel to concerns the so-called fight
against graft was a façade to entrench Lourenço’s grip on power.

Between 2013 and the end of 2017, data from the Angolan government indicates Angola’s total debt to China spiked from $4,7 billion to $18 billion.

Manuel Augusto, Angola Minister of External Affairs, conceded Angola was exploring if Loureco’s government was eligible for a debt pardon by the Asian-based global economic powerhouse.

He was speaking at the recent Africa China forum in Beijing.

– CAJ News

 

 

 

 

 

 

Short URL: http://cajnewsafrica.com/?p=28164

Posted by on Sep 14 2018. Filed under Africa & World, Energy, Exclusive, Featured, Investing, Investing, News, Oil & Gas. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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