Corruption in Angola

Corruption in Angola is a pervasive and often lethal phenomenon, hindering economic growth and government-sponsored liberalization programs.[1] Levels are said to be owing “to a lack of checks and balances, insufficient institutional capacity and a culture of impunity.”[2]

A 2010 report described Angola as facing serious corruption problems across every level of society after roughly thirty years of instability and violence. This corruption takes a variety of forms, from graft, money laundering and embezzlement, to “systematic looting of state assets” and a deep-rooted patronage system. Corruption and mismanagement are especially prevalent in the extractive industries.[3]

In 2015, a video report by Nicholas Kristof of the New York Times stated that despite Angola's extraordinary oil wealth, the systematic confiscation of that wealth by members of a “spectacularly corrupt” elite with lavish lifestyles was keeping people in grinding poverty, depriving children of proper education and health care, and causing the world's highest child-mortality rate. Angola, said Kristof, is “the deadliest country in the world for kids and yet the government has just cut the health budget by 30%.” He called on Western governments that provide aid to Angola and do business with it to take forceful action to end the country's endemic corruption.[4]


Indices

In 2006 Transparency International ranked Angola 142 out of 163 countries in the Corruption Perception Index just after Venezuela and before the Republic of the Congo with a 2.2 rating.[5] In 2010, Angola was at 168th place (out of 178 countries) on Transparency International’s Corruption Perceptions Index (CPI), receiving a 1.9 on a scale from 0 to 10. On the World Bank's 2009 Worldwide Governance Index, Angola did very poorly on all six aspects of governance assessed. While its score for political stability improved to 35.8 in 2009 (on a 100-point scale) from 19.2 in 2004, Angola earned especially low scores for accountability, regulatory standards, and rule of law. The score for corruption declined from an extremely low 6.3 in 2004 to 5.2 in 2009.[3][6]

Angola was ranked 161st out of 179 countries on the Heritage Foundation’s Index of Economic Freedom, which labeled Angola the seventh least free economy in sub-Saharan Africa, and did particularly poorly in freedom from corruption, scoring 19 out of 100 points. On the 2010 Ibrahim Index, Angola ranked 43rd out of 53 sub-Saharan African countries.[3]

Angola is ranked 47 out of 55 countries on the 2010 Revenue Watch Institute’s Transparency Index, scoring 34 points on a 100 point scale. Angola scored 26 points of 100 on the 2010 Open Budget Index, a large improvement over its 2004 score of 3%, but a far lower score than those of most of the other surveyed countries, reflecting the fact that the government provides very little information to the public.[3]

Along with 15 other countries, Angola is listed on Global Integrity's Grand Corruption Watch List, which lists nations with dangerously weak anti-corruption safeguards.[3]

Background

Overview

Angola gained its independence from Portugal in 1975, then plunged into years of civil war between the National Union for the Total Independence of Angola (UNITA) and the governing Popular Movement for the Liberation of Angola (MPLA). Millions died prior to the 2002 ceasefire. President José Eduardo dos Santos, in office since 1979, has run an undemocratic regime; in the first parliamentary elections, which took place in 2008, the ruling MPLA won over 80% of the vote.[3]

Among the country's enduring problems are poverty, poor infrastructure, minefields left over from the civil war, and fighting by guerrillas who seek to liberate Cabinda in the north, despite a 2006 peace treaty signed with Cabinda liberation front leadership.[3]

Cold War

The Soviet press, despite the close relationship between Angola and the USSR, accused the ruling MPLA party of clientelism, corruption, and nepotism, accusing the government of illicitly accumulating US$1 billion. Ogoniok said that "corruption has flourished on a scale which is unprecedented even in Africa... the ruling party in Angola... being pro-communist by nature, was ready to sacrifice everything and everybody."[7]

Angolagate

“Angolagate”, which was carried out and uncovered over the course of the 1990s, and led to arrests and judiciary actions in the 2000s, involved an illegal arms sale to Angola despite a UN embargo, with business interests in France and elsewhere improperly obtaining a share of Angolan oil revenues. Over 40 individuals, including the son of Francois Mitterrand and a former French Minister of the Interior, were charged with illegal arms trading, tax fraud, embezzlement, money laundering, and other crimes.[3]

After the French government arrested Pierre Falcone, one of the principals in Angolagate, the Angolan government retaliated by refusing to renew a license for a French oil firm, and instead gave the concession to a Chinese company.[3]

Costa case

In April 1999 Gustavo Costa, a journalist for Expresso, wrote an article entitled Corruption Makes Victims, accusing José Leitāo, the chief presidential advisor, of embezzling government revenue. Police arrested Costa and charged him with difamação and injúria. The Angolan Supreme Court found him guilty, sentencing him to eight-months imprisonment, suspended for two years, and fined him $2,000.[8]

Marques case

Rafael Marques de Morias, a journalist and human rights activist, wrote "The Lipstick of the Dictatorship", an article criticizing corruption in the Angolan government and President dos Santos, on July 3.[9][10]

The National Criminal Investigation Division (NCID) questioned him on October 13 for several hours before releasing him. Later that day Morais gave an interview with Rádio Ecclésia and repeated his criticism of the dos Santos government. Twenty armed members of the Rapid Intervention Police arrested him along with Aguiar dos Santos, the publisher of Agora, and Antonio José Freitas, Agora staff reporter, on charges of defamation on October 16, 1999. Marques said dos Santos bore responsibility for the "destruction of the country... for the promotion of incompetence, embezzlement and corruption as political and social values."[9][10]

World Bank

In May 1999 the World Bank threatened to cut off aid to Angola if the government did not take serious steps to counter corruption, beginning with an audit of the petroleum and diamonds industries, Angola's primary sources of income.[11]

IMF findings

In 2002 the International Monetary Fund found the Angolan government could not account for more than US$900 million in 2001 due to "extensive corruption". Bestos de Almeida, spokesman for the Angolan Finance Ministry, denied any financial inconsistency existed.[12] Transparency International's (TI) Corruption Perception Index (CPI) for 2003 found the governments of Angola and Zimbabwe the most corrupt in Southern Africa. On a 0 to 10 scale with 0 the most corrupt and 10 the most transparent, TI rated Angola 1.8 and Zimbabwe 2.3, some of the highest corruption ratings in the world.[13]

HRW findings

In 2004, Human Rights Watch found the government could not account for US$4 billion spent between 1997 and 2002.[14] Human Rights Watch has reported and the Angolan government has subsequently admitted, that US$32 billion in oil revenue (a quarter of Angola’s GDP) went missing between 2007 and 2010[15] and could not be accounted for. In 2010, a US senate corruption investigation committee[16] reported that, "Aguinaldo Jaime, who served as the governor of the National Bank of Angola from 1999 to 2002, initiated a series of suspicious US$ 50 million transactions with US banks. For each attempt, the banks, concerned about the likelihood of fraud, ultimately rejected the transfer or returned the money shortly after receiving it. The government could not account for approximately US$ 2.4 billion over the period of Jaime’s three-year tenure as central bank governor.”[17]

Political corruption

Presidents Jose Eduardo dos Sants and Brazilian Dilma Rousseff

The Southern African Development Community and the European Commission have described Angola's elections as generally fair, but other observers have cited irregularities and violence as factors that make the elections less than equitable. The ruling party enjoys the upper hand in many ways during elections, and financing lacks transparency.[3]

There is much overlap, as well as intimate connections, between the ranks of high-level government and business figures in Angola. This results in a great many conflicts of interest. Because of this overlap, foreign investors are often pressured to partner with Angolan firms that are fronts for public officials.[3]

Angolan public servants routinely demand bribes, known as “gasosas.” Bribes are necessary to access basic public services such as medical care, schooling, vehicle registration, and business permits. Police officers often extort payments at checkpoints.[3] In 2010, 18 low-level employees of the central bank and finance ministry were arrested for embezzling roughly 137 million USD.[3]

There is a great deal of corruption surrounding the president, with people close to him controlling much of the government's exceedingly non-transparent financial operations. A 2010 report identified key sectors of the Angolan economy as part of a business empire run by presidential intimates.[3] The fact that Angola's 12 richest people include the president’s daughter, leading government ministers, and ruling-party members reflects the centrality of corruption in the country.[3]

President

Angola's president, Jose Eduardo dos Santos, has been accused of creating one of the most corrupt ruling environments in Africa by ignoring the everyday needs and concerns of citizens and focusing, instead, on accumulating a massive fortune for himself and his family and crushing all political opposition.[18][19]

Although Dos Santos has been praised for his role in the country’s independence, and his public promotion of peace and democracy,[20] his family and those close to him hold massive fortunes, while the average Angolan citizen lives on less than $2 a day.[21]

Dos Santos became truly wealthy during and after the Angolan civil war, when he began amassing assets at a staggering level. When a ceasefire was called in 2002, Dos Santos had already taken control of several key companies and industries during the subsequent period where parts of the economy were being privatized. He then arranged similar takeovers of much of the extractives industries in the country.[22]

Eventually, the Angolan legislature declared it illegal for the president to have financial interests in companies. In response, Dos Santos allegedly arranged for his daughter to take control over much of his financial stakes in these companies and receive the kickbacks and assets he had previously benefitted from. Dos Santos then began taking controlling stakes in companies with the use of the government budget and arranged a kickback system to make the takeover possible. He now allegedly holds indirect control of even more companies and reaps the benefit through proxies.[22]

From 2002 through 2012, Angola's public budget grew to over 69 billion dollars in 2012 through constant oil revenues. The IMF reported that 32 billion of this revenue revenue had simply gone missing from the government’s ledger. It was eventually tracked down and only found to be used for “quasi-fiscal activities” without further explanation.[22]

In June 2016, President dos Santos appointed his daughter as a director of the state-owned oil company, Sonangol. The appointment was challenged on the grounds that it violates Angola's public probity laws.[23] Opposition politicians and critics declared this as dos Santos' attempts at becoming a "king" of Angola.[24] It has been noted that placing his daughter in such a prominent position signals the likelihood on her intent to enter politics when President dos Santos' rule is up. The Angolan Supreme Court accepted the case in October, marking the first time a court has ever heard any case against the president since dos Santos' tenure.[25] Bloomberg noted that Sonangol is planning a substantial restructuring due to external market pressure on oil, and that dos Santos wanted someone he fully trusted responsible for the restructuring to secure his family's interests.[26]

José Filomeno dos Santos

In 2013, President dos Santos named his eldest son, José Filomeno dos Santos, as the head of Angola's sovereign investment fund, in charge of over $5 billion.[27]

Tax and customs

Tax laws are rarely enforced in a fair and uniform fashion, and tax officials enjoy broad discretionary powers in the interpretation of tax laws. Businesses are pressured to offer bribes to tax officials when importing goods.[3]

Procurement system

The procurement system is corrupt, owing to inadequately enforced procurement laws.[2] Procurement laws are widely broken and abused, and procurement practices are inefficient. High-level officials receive sizable kickbacks from companies in exchange for contracts, and insiders enjoy preference in the awarding of contracts.[3]

Money laundering

In what has been called “a diplomacy of corruption,” Portugal acts as an intermediary for the Angolan ruling elite, a role that the Portuguese elites enjoy, according to one source, because they feel Angola owes them for having withdrawn from their empire.[28]

Judiciary

The judiciary has become increasingly corrupt. Resources are in short supply, judges are politicized, and court rulings are not objective. The system is understaffed, inefficient, and lacking in resources and political independence.[2]

The President has the power to appoint judges, many of whom are active members in the ruling party. One report states that there is no real separation of powers among the executive, legislative, and judiciary branches.[3]

In addition to being overloaded and undertrained, courts are heavily corrupt, and most municipal courts are not even operational, obliging citizens to turn to informal, traditional court systems.[3]

Business corruption

Jose Eduardo dos Santos with John Kerry

Angola's business environment has been described as “one of the most difficult in the world” thanks largely to “pervasive corruption and cumbersome bureaucratic procedures” that lead companies to offer bribes and facilitation payments. Foreign investors are often pressured into partnering with Angolan firms. These are often front organizations owned by government officials.[2]

Typical of Angolan business practices is a joint venture with the French firm Thales Group that personally benefited Angola’s ambassador to France and head of the state oil company, even though both men were prevented by law from entering into such a deal.[3]

Over 46% of companies surveyed for the 2006 World Bank & IFC Enterprise survey predicted paying bribes “get things done”, while 36% said corruption was a major impediment to doing business.[3] The 2003 Promotion of Angolan Private Entrepreneur Law grants Angolan firms preferential treatment in public contracts.[3]

Financial fraud at BNA

In the largest financial fraud in Angola until then, the Central Bank of Angola (also known as BNA) was the location of an alleged fraud case of about $160 million transferred to overseas accounts in 2009. Several money transfers were discovered from the Angolan treasury account at Banco Espírito Santo in London to bank accounts abroad controlled by the suspects. When the bill reached the minimum values of the BNA, it was the BES London itself that warned the authorities of Angola of the successive outflows of money. The case of fraud was revealed by the Portuguese newspaper Diário de Notícias in June 2011. Several key employees of the Angolan Finance Ministry and the BNA in Luande were sentenced to up to eight years in prison in 2011. There are still investigations going on in Portugal and Angola.[29][30]

Oil and diamond mining

The oil and mining sectors are at especially high risk for corruption.[2] Oil accounts for over half of the nation's GDP and 80% of public revenues. There have also been major infrastructure improvements. Despite the growth, however, the vast majority of Angolans remain poor. While high postwar oil prices have enriched the Angolian treasury, they have also provided extensive opportunities for corruption. Officials have used their authority over oil reserves to enrich themselves and strengthen their power. Between 1996 and 2004, over US$1 billion has been lost every year in oil income.[3]

Angola's oil is controlled by the state-owned Sonangol group, whose procedures and relation to the government are obscure and complex, and much of whose income is shunted to the governing elite via offshore accounts. Sonangol is very poor on reporting corruption. Employees are not trained to avoid corruption and whistleblowers are not safe from retaliation. Some progress has been made in certain areas, however.[3] The firm now regularly publishes its receipts for petroleum sales, for example, and has been more transparent in its concession bidding.[3]

Patronage systems have reportedly changed from direct payments with revenues to instead using the firms influence to rig contract bids and over-bill the state while awarding kickbacks.[3] Information released to the public on diamond revenue is not as detailed as is the case with oil revenue.[3] The increasing role of China in Angolan oil production exacerbates the transparency concerns surrounding that industry, although there are indications that China may wish to implement the UNCAC.[3] According to the United Nations, oil revenues make up 80% of Angola's revenues, but employs only 1% of the population.

Media corruption

Although a Press law passed in 2006 ended the government's monopoly on television, it still owns the principal TV station, as well as the nation's only daily newspaper and radio station, and the first purportedly private TV station, established in 2008, is owned by a company with close ties to the president. Government interference, and the threat of firing or imprisonment, still hamper media independence, as does the country's secrecy laws, which can be used to prosecute investigative journalists.[3]

Anti-corruption efforts

The Office of the Ombudsman was formed in 2005, but is considered to be politically influenced, and can only make recommendations, which are apparently not taken seriously by the government. The office does not appear to have made any serious investigations, and its reports are not made public.[2]

The Court of Accounts, whose director is chosen by the president, is responsible for auditing government accounts. On paper, it has considerable powers but has yet to make a significant difference.[2]

Angola is a signatory to the African Union Convention on Preventing and Combating Corruption and the UN Convention against Transnational Organised Crime, but has ratified neither. In 2006, it ratified UNCAC, and in 2004 it joined the African Peer Review Mechanism. However, Angola has yet to sign the Extractive Industries Transparency Initiative.[2]

President dos Santos publicly advocated a “zero tolerance” approach to corruption in 2009, but efforts remain feeble. Laws are outdated and scattered, with laws in place forbidding corruption, although bribery of foreign officials was still legal as of 2008.[2] A 1996 law provided for the establishment of an agency to combat corruption, but nothing has been done on this front. The anti-corruption effort remains inadequate, with anti-corruption institutions that are underdeveloped, lacking in resources, insufficiently competent, and subject to political interference.[2]

As of 2010, the government began implementing financial management software to track all state revenues and expenditures. The 2010 Public Probity Law states that all government officials must declare their wealth, but information declared under this law is not made public. The 2010 Anti-Money Laundering and Terrorism Financing Law provides for up to 24 years in prison, was intended to fight money laundering, and the Angolan Central Bank is tasked with preventing and uncovering money laundering. The 2002 Law on Access to Administrative Documents guarantees public access to official documents, but it is largely canceled out by the 2002 State Secrets Law, which is routinely used to prevent disclosure of information.[3] There is also a Public Procurement Law, passed in 2010, but it is considered essentially meaningless. A 2011 penal code also indirectly criminalizes government corruption. The Law of Crimes Against the Economy criminalizes extortion and active and “passive corruption.”[2]

A January 2016 report stated that despite President dos Santos's 2009 promise of “zero tolerance,” any significant arrest has yet to occur. The report added that dos Santos's actions indicated that he uses this policy to target government critics.[2] The report noted that while dos Santos was borrowing billions of dollars from Nigeria to help his country weather hard times, Nigeria instead turned to the UAE to recover the billions it had invested.[2]

The report pointed out that if dos Santos were serious about corruption he would do the same. But he is not serious, the report continued, because fighting corruption would eliminate the source of his power.[28] While Muhammadu Buhari seeks to reform Nigeria's corrupt environment, Dos Santos seeks keep corruption in place at whatever cost to the country.[28]

The IMF has promoted anti-corruption reform in Angola, and in 2009 signed an agreement to seek to improve accountability in regard to oil revenues. The Obama administration has also called repeatedly for greater transparency in the extractives industries. In addition, there are positive indications that China, which is Angola's major trading partner, is near ratifying the UN Convention against Corruption. In 2011, China criminalized the bribery of foreign officials.[2]

Civil society organizations that focus on corruption are small and weak and face government retaliation. An activist who was researching transparency issues for Global Witness was arrested in 2007 and charged with crimes against state security.[3]

See also

References

  1. ↑ Gates, Henry Louis; Anthony Appiah (1999). Page Africana: The Encyclopedia of the African and African American Experience. p. 624.
  2. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 "Angola Corruption Reports". Business Anti Corruption Portal.
  3. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 "Overview of corruption and anti-corruption in Angola" (PDF). Transparency International.
  4. ↑ Kristoff, Nicholas (Jun 24, 2015). "Corruption is Killing Children in Angola". New York Times.
  5. ↑ J. Graf Lambsdorff (2006). "Corruption Perceptions Index 2006". Transparency International. Retrieved 2008-01-21.
  6. ↑ "Index of Economic Freedom". The Heritage Foundation. 2008. Retrieved 2008-01-21.
  7. ↑ Light, Margot (1993). Troubled Friendships: Moscow's Third World Ventures. p. 77.
  8. ↑ James, W. Martin (2004). Historical Dictionary of Angola. p. 41.
  9. 1 2 "Marques gets six months for defaming president". Committee to Protect Journalists. Retrieved 2008-01-21.
  10. 1 2 "Views of the Human Rights Committee under the Optional Protocol to the International Covenant on Civil and Political Rights, Eighty-third session, Communication No. 1128/2002". Open Society Institute via United Nations Human Rights Committee. Retrieved 2008-01-21.
  11. ↑ Vines, Alex (1999). Angola Unravels: The Rise and Fall of the Lusaka Peace Process. Human Rights Watch. p. 93.
  12. ↑ Justin Pearce (2002-10-18). "IMF: Angola's 'missing millions'". BBC News. Retrieved 2008-01-21.
  13. ↑ "ZIMBABWE: Corruption increasing, Transparency International". IRIN Africa. 2003. Retrieved 2007-12-20.
  14. ↑ "Angola: New OPEC Member Should Tackle Corruption Not Critics". Human Rights Watch. 2006. Retrieved 2008-01-21.
  15. ↑ "Angola: Explain Missing Government Funds". 20 December 2011.
  16. ↑ Corruption still fuels Angola's poverty afrol.com, 13 April 2012
  17. ↑ The Eurofiscal Corruption Contest – The Portuguese Entry Golem XIV, 15 June 2012
  18. ↑ Redvers, Louise (29 August 2012). "Jose Eduardo dos Santos: Angola's shy president" – via www.bbc.com.
  19. ↑ Smith, David (30 August 2012). "Angola's José Eduardo dos Santos: Africa's least-known autocrat" – via The Guardian.
  20. ↑ Jose Eduardo dos Santos: Angola's shy president, BBC, August 29, 2012
  21. ↑ Nsehe, Mfonobong (Feb 9, 2012). "The Five Worst Leaders In Africa". Forbes.
  22. 1 2 3 Dolan, Kerry (Aug 14, 2013). "Daddy's Girl: How An African 'Princess' Banked $3 Billion In A Country Living On $2 A Day". Forbes.
  23. ↑ Vieira, Arnaldo. "Court summons Angola’s president". Daily Nation. Retrieved October 27, 2016.
  24. ↑ "Accusing dos Santos of nepotism, Angolan party rejects president’s daughter as oil company chief". Mail & Guardian. Jun 7, 2016. Retrieved October 27, 2016.
  25. ↑ "Lawyers pose landmark challenge to Angola leader". The Herald. Retrieved October 27, 2016.
  26. ↑ Almeida, Enrique (Jun 3, 2016). "Angola Leader Secures Economic Grip Naming Daughter as Oil Boss". Bloomberg. Retrieved October 27, 2016.
  27. ↑ Angola names president's son to chair $5 bln sovereign wealth fund, Reuters, Feb 21, 2013
  28. 1 2 3 Matondo, Moiani (Jan 27, 2016). "Africa: Nigeria and Angola Take Two Extreme Approaches to Corruption". All Africa.
  29. ↑ Angola Sentences Former Central Bank Officials to Jail for Fraud Bloomberg Online, retrieved 2 August 2011
  30. ↑ Milhões do Banco de Angola deram a volta ao mundo ("Millions of the Central Bank of Angola on the way round the world") Diário de Notícias, 3 February 2012, page 19 (Portuguese)
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.