Angola: Where did all the money go? Part 2, the parallel economy

Angola and Portugal flagAngola’s state oil company Sonangol became central to economic life, and to the articulation of state power.

[In this second part of our investigation into Angola’s missing billions, we focus on the oil sector. For part 1 click here.].

Greying elegantly, with an earnest, moustachioed smile and hand outstretched to greet a head of state or multinational corporation boss, Manuel Vicente looks every inch the chief executive.

In fact, it has been seven years since he stepped down from the top job at Sonangol to become Angola’s economy minister and then vice-president. Vicente’s imprint on Sonangol is clear.

He presided over the company’s fastest expansion in its four-decade history.

In those years, Sonangol was the country’s best-functioning entity, generating most of the funds for the war against UNITA rebels, which ended with the death of their leader Jonas Savimbi in 2002. Then Sonangol went on to underwrite the government’s nationalist approach to post-war reconstruction.

Sonangol’s role is key to understanding what derailed the post-war economic plan – a programme to rebuild using oil and diamond revenue to fix war-damaged roads and bridges, but also to modernise and diversify the economy.

Most of the big development projects have run out of funding, yet Luanda’s Centre for Studies and Scientific Research reckons that $189bn was invested overseas between 2002-2015 by Angolan companies and individuals.

For Ricardo Soares de Oliviera, a professor at Oxford University, Sonangol became a parallel state during the war, all under the control of the presidency. When funds ran low, it was Sonangol executives who were trusted to negotiate complex oil-backed loans or set up opaque vehicles to service these financial commitments.

And when the ruling elite swapped its Marxist proclivities for crony capitalism, “Sonangol was an island of competence thriving in tandem with the implosion of most other Angolan state institutions,” Soares says.

A senior official working on post-war reconstruction told us: “Sonangol was the cash cow, called upon to ensure there were resources, but there was no plan, no structures.”

Amid the geopolitical and financial chaos of the early 2000s, there was little international interest in rebuilding Angola. “There was this overwhelming need to provide goods and services to the population that is finally at peace […]. It’s the tyranny of the urgent,” the official said. “Sonangol was a real-estate developer, they were a bank owner, they ran an aviation company. […] They had more people devoted to things that were non-core business than were core business,” the official added.

At the centre of this vast operation employing thousands of people on four continents and controlling a parallel budget of offshore accounts and billions of dollars of physical and financial assets was Vicente.

“He is like an octopus,” one of Vicente’s ex-colleagues told The Africa Report. “Everybody does what he says. He has a lot of people around him that control everything. […] He’s a gentleman.”

It was his savoir-faire, discretion and loyalty that won Vicente backing from President Dos Santos. Outwardly amiable, Vicente is a tough negotiator, as foreign oil companies have found.

His relations with long-time colonial power Portugal are ambivalent.

When Sonangol took a stake in Portugal’s Galp Energia, Vicente announced: “We are the bosses, we will dictate the rules of the game.” A test for the Lisbon-Luanda axis came with the trial of Orlando Figueira, a Portuguese prosecutor, arrested in 2016 on charges of receiving a $850,000 bribe to suspend an inquiry into Vicente’s business affairs. An indictment was issued against Vicente.

After acceding to the presidency in 2017, Lourenço called Portugal’s case against Vicente an infringement of sovereignty.

Last May, a Portuguese court ruled that the Vicente case should be transferred to Luanda. Welcoming this, Marcelo Rebelo de Souza, Portugal’s president, said the decision had “removed an irritant” in bilateral relations.

For Angolans, it showed Vicente’s influence: enough for the President to defend him against their country’s closest European ally.

Source: theafricareport