USA Africa Dialogue Series - Angola disgracing Africa yet again

----- Forwarded Message -----
From: Mobhare Matinyi <mobhare@gmail.com>
To: Wanazuoni <Wanazuoni@yahoogroups.com>
Sent: Friday, January 27, 2012 11:30 AM
Subject: [Wanazuoni] Angola disgracing Africa yet again

Angola disgracing Africa yet again

Mobhare Matinyi, Washington, DC, The Citizen, Thursday, 26 January 2012
A pragmatic racist once commented that hardly can anything good come
out of Africa. He was probably right. Angola, which recently offered
Portugal a bail-out package heedlessly, is now in the middle of a $32
billion accounting scandal.
Before pouring more details let me zero-in on this amount from an
African context. This $32 billion, not million, is slightly more than
four times the current budget of the government of the United Republic
of Tanzania, which is less than $8 billion.

The same amount is equivalent to 25 per cent of Angola's Gross
Domestic Product (GDP) based on Purchasing Power Parity (PPP), or half
of Kenya's GDP. From another perspective, $32 billion is more than 60
times the amount of the loan the International Monetary Fund (IMF)
authorized for Kenya in February 2011, which was $508 million.
Speaking of Angola, this is slightly more than the government
expenditure in 2010, which was $29.5 billion. Luckily though, in 2010
the country enjoyed a budget surplus of 7.1 per cent of its GDP,
meaning its budget does not depend on donors.

Where did this money come from? Angola exports 1.8 million barrels of
oil per day. Interestingly, if a barrel of oil sells for $100, Angola
makes $180 million a day. However, an estimated two-thirds of its
population of 18 million lives on less than $2 a day. What a paradox?

So, who caught them? In 2009 the Angolan government begged for
assistance from the IMF and got a deal called a stand-by- agreement
which granted Luanda a loan of $1.4 billion to stabilize its balance
of payments following an abrupt drop in net foreign reserves from the
previous year. That pact opened doors for IMF officials to scrutinize
Luanda.

So last year the officials discovered something weird, and this month
they made it public. The scandal originates from the state oil firm,
Sonangol, now dubbed the "quasi-fiscal operations manager" of the
government. This amount is the missing funds in Angola's fiscal
accounts for year 2007 to 2010.
According to Reuters, the IMF said this: "Preliminary data indicate
that quasi-fiscal operations undertaken by the state oil company on
behalf of the government, financed out of oil revenues but not
recorded in the budgetary accounts, can explain a large part of the
discrepancy."

The Guardian of London said last year that Sonangol runs almost
everything in the Angola's economy and noted that back in 2001 when
British Petroleum (BP) attempted to publish its oil-related earnings
from Angola, President Eduardo dos Santos threatened to expel the oil
giant so BP kept quiet.

So what is next? The IMF says that the government of Angola will
cooperate in the investigation although its officials deny any wrong
doing. But Angola's Minister for the Economy, Abrahao Gourgel, has
already said the government will not request a new IMF loan when the
current agreement expires at the end of the year. Why say that now?
That is what Africa's second-largest oil producer is doing. This could
easily be another example of the so-called resources curse. Angola's
oil revenues represent over 95 per cent of the country's export income
and around 45 per cent of GDP but can't even pay down its debt of
about $18 billion.

Now look at this funny story. In November 2011, Angola News Agency,
ANGOP, reported that when Portuguese Prime Minister, Pedro Passos
Coelho, toured Angola, President Dos Santos told the press: "We're
aware of the difficulties the Portuguese people have faced recently
and in such difficult times we must use our trump cards."
This is the leader of an under-developed country speaking before his
people, completely out of touch with reality. President Santos, whose
children are filthy rich, has no idea that many Angolans go to bed
hungry on earthen floors.

Records show that only 25 per cent of Angolan children are enrolled in
primary school and here is their leader promising to bail out an
irresponsible country. According to New York-based Mercer Consultants,
Luanda is ranked as the most expensive capital city in the world for
the second year consecutively.

Portugal, under pressure from the IMF wants to dump companies such as
the state utility company, Energias de Portugal, the national airline
Transportes Aéreos Portugueses, and the distressed bank, Banco
Português de Negócios. Guess who is planning to buy them? Banco BIC of
Angola, which is part owned by Dos Santos's 38-year-old daughter,
Isabel.
Isabel, who is worth a minimum of $170 million according to Forbes
magazine, is considered to be perhaps Africa's richest woman with
numerous business interests in Angola and Europe. How did she become
so wealthy?

This is Angola, a country that fought a 25-year civil war soon after
its independence, practically an unfortunate proxy-war between the
West and the East. Why does Angola still want to carry such a
disappointing story? What is wrong with Africa?

http://www.thecitizen.co.tz/editorial-analysis/47-columnists/19252-angola-disgracing-africa-yet-again


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