Disappearance of state oil revenue undermines Angolans rights

Jan 13, 2004 01:00 AM

More than $ 4 bn in state oil revenue disappeared from Angolan government coffers from 1997-2002, roughly equal to the entire sum the government spent on all social programs in the same period, Human Rights Watch said in a report.
Meanwhile, although the 27-year civil war ended in 2002, an estimated 900,000 Angolans are still internally displaced. Millions more have virtually no access to hospitals or schools. According to United Nations estimates, almost half of Angola’s 7.4 mm children suffer from malnutrition.
"While ordinary Angolans suffered through a profound humanitarian crisis, their government oversaw the suspicious disappearance of a truly colossal sum of money," said Arvind Ganesan, director of the Business and Human Rights program at Human Rights Watch. "This seriously undermined Angolans’ rights."

The 93-page report, "Some Transparency, No Accountability: The Use of Oil Revenue in Angola and Its Impact on Human Rights," details how much money was generated by oil, how much disappeared from public coffers, and how this shortfall undermined Angolans’ civil, political, economic, social and cultural rights.
Angola is sub-Saharan Africa’s second largest oil exporter after Nigeria. State oil revenues surged after oil companies such as BP, ExxonMobil and Total expanded Angolan operations in the late 1990s. Those oil revenues totalled $ 17.8 bn from 1997 to 2002, or about 85 % of total government revenue. But an analysis of figures from the International Monetary Fund (IMF) shows that $ 4.22 bn of that total has gone missing, or roughly 9.25 % of the country’s gross domestic product (GDP) annually.

In those same years, total social spending in the country-including Angolan government expenditures as well as public and private initiatives funded through the United Nations’ Consolidated Inter-Agency Appeal-amounted to $ 4.27 bn. Governments in many countries argue that they do not have the resources to fully realize the economic and social rights of their populations, such as the right to health or education.
But they are required to make a good faith effort to use their available resources to fulfil their obligations. The Angolan government has clearly failed to do this since it squandered such enormous sums through corruption and mismanagement, Human Rights Watch said.

The Angolan government has refused to provide information about the use of public funds to its population, thereby undermining the right to information. It has failed to establish hundreds of badly needed courts and allowed the judiciary to become dysfunctional, undermining Angolan’s ability to hold government officials and others accountable. And it has not fully committed to free and fair elections.
The Angolan civil war "fought between the government and the National Union for the Total Liberation of Angola (UNITA)" subsided from 1994 to 1998, then resumed. Two months after UNITA leader Jonas Savimbi was killed in combat, a peace agreement was reached in April 2002.
"The Angolan government says the international community should do more to fund schools, hospitals and courts, but it refuses to explain where billions of dollars of government revenue went," said Ganesan. "Any further aid to Angola should be conditional on very strict requirements for transparency in the government budget."

The Human Rights Watch report examines the Angolan government’s failure to implement IMF reform programs that could have led to greater transparency and accountability. Human Rights Watch also looks at the progress of the "Oil Diagnostic" study, commissioned by the government and the World Bank and conducted by the accounting firm KPMG to determine how much oil revenue is actually deposited into the Angolan central bank.
Since the mid-1990s, the government and the IMF negotiated four reform programs to increase transparency. Three were implemented, but ultimately failed because of the government’s lack of commitment to reform. Similarly, there have been several international initiatives-notably the Extractive Industries Transparency Initiative (EITI) led by the British government, and the Publish What You Pay (PWYP) campaign organized by a coalition of non-governmental organizations-which are intended to promote greater government and corporate transparency over revenues. The Angolan government has not committed to either initiative.

In October, the financier George Soros and his Open Society Institute negotiated an agreement with the Angolan government to implement a wide-ranging set of reforms to increase transparency of oil revenues. But the government has delayed signing the agreement, which is currently in limbo.
"There have been many initiatives to promote transparency in Angola, but each time, the government walks away," said Ganesan. "It’s an issue of political will."

Human Rights Watch called upon the Angolan government to publish all of the "Oil Diagnostic" reports, conduct audits of the state-owned oil company Sonangol, and participate fully in international initiatives to promote transparency.
Donor governments and international financial institutions, such as the IMF and World Bank, should include stringent measures to improve transparency as preconditions to any future agreements with the Angolan government, Human Rights Watch urged.

Source: Human Rights Watch
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