Reforms of Angola

Jul 18, 2016 12:00 AM

Republic of Angola is an African country and a member of the Organisation of Petroleum Exporting Countries (OPEC). Dependent upon its huge reserve of mineral oil, petroleum and diamonds, Angola is one of the fastest growing in the world since the end of the Civil War in 2002. The country became independent in 1975 and José Eduardo dos Santos has been the President of Angola since 1979, he is also the commander in chief of the Angolan Armed Forces (FAA) and president of the People’s Movement for the Liberation of Angola (MPLA).

Mr. Santos is the second-longest-serving leader in Africa so he has a strong grip over Angola’s politics and economy. Few days back the 73 years old President has declared that he would step down in 2018, putting an end to one of Africa’s oldest autocracies and and an uncertain succession in the continent’s second-biggest oil producer.

Though the experts are of opinion that Mr. Santos made this announcement to appease the opponents inside his own party and guide efforts to appoint his successor. Recently, Mr. Santos’ government has vacillated as oil-mineral largess has collapsed along with the global crude prices. Thousands of layoffs and a foreign-currency crunch have led to unprecedented public grievances with the government.

International Monetary Fund expects economic growth of 3.5% this year, down from two digits rates a few years ago. The President has issued a decree against Angola’s energy giant, Sonangol, a parastatal organisation that oversees petroleum and natural gas production in Angola, will stop its activity in the oil and natural gas industry as Angola copes with financial crisis due to low oil prices. President has removed the board of the Sonangol, and placed his eldest daughter, Isabel, in change, who is the richest woman of Africa as reported by Forbes.

This restructuring comes amidst much more shake up of the company and its vast web of subsidiaries, which are struggling financially because of inefficiencies and low commodity prices.

Mr. Santos is a controversial figure in Angola though for his vast business empire, that includes banking, telecoms, diamonds and retail, he is very respected and criticised as well. Despite of having limited oil and gas experience, Ms dos Santos is to be a Non Executive administrator and board president is a surprise because neither Sonangol’s former president, Francisco de Lemos José Maria is part of the new board nor are other long serving executives including Anabela Soares de Brito da Fonseca and Fernando Roberto.

In May of this year, plans to segregate Sonangol’s business into three entities were announced; one entity to manage oil and gas activities, second to oversee investments and subsidiaries, and a third to be the national concessionaire. But it was not immediately known how the new board will fit into this tripartite arrangement and how power will be divided between Ms dos Santos as board president and Mr Jerónimo as president of the executive committee.

These moves mark the latest in a string of steps taken by Luanda in recent months however it also serves another purpose, i.e. to limit the emergence of a potential power rival to President in the twilight of his rule.

Sonangol magnanimously contributes to the economy of Angola. It has formed the cornerstone of the ruling party’s economic power base, accounting for roughly 50% of the country’s Gross Domestic Product, 75% of the government’s revenue and above 90% of the exports of the country.

Sonangol’s control over Angola’s economy and MPLA’s control over it has enabled the President and his party to monopolise political power and finance a strong security structure capable of stifling public dissatisfaction.

So above everything there is no group in Angola has been formed yet to compete with MPLA.

By Dr. Ankit Srivastava, Editor – in – Chief

(ankits@newdelhitimes.com)

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