Angola

Politics:

• Analysis

  Angola politics: Quick View - UNITA launches criminal case against the pres

  Event

  The largest opposition party, União Nacional para a Independência Total de Angola (UNITA), has launched a criminal case against the president, Jose Eduardo dos Santos, alleging treason and electoral manipulation.

  Analysis

  The submission of this criminal complaint to the attorney-general is an escalation of earlier allegations of fraud relating to last year's general election-claims that were previously dismissed by the Constitutional Court. UNITA, which fought a civil war against the president's ruling Movimento Popular de Libertação de Angola (MPLA), won 32 seats in the National Assembly in the August poll, doubling its 2008 tally, but the party maintains that the vote was rigged. UNITA delivered more than 100 documents to the attorney-general in March, claiming that they provide evidence relating to a string of alleged crimes, including excess of power, treason, sabotage, abuse of citizens' rights and the falsification of electoral rolls and election results.

  The very public submission of the allegations provoked a stern reaction from influential Catholic bishops, who said that UNITA was tarnishing the country's image, as well as a series of damming editorials in the state-owned and largely pro-government private media. Unsurprisingly, Rui Falcao, the MPLA's political bureau secretary for information, described UNITA-which has called on Mr dos Santos to respond publicly to its allegations-as "poor losers", saying that the move was "irresponsible" and "unpatriotic". Given that UNITA's claims were dismissed by the Constitutional Court in September 2012, it is unlikely that these allegations will get anywhere with the attorney-general.

  However, UNITA's persistence shows a new determination to grab headlines-either good or bad-in the state-dominated media. Its allegations against Mr dos Santos come as the country prepares to celebrate the 11th anniversary of the end of the war between the MPLA and UNITA, on April 4th. The ruling party uses this annual milestone to hail its post-war achievements, along with an underlying message, aimed at youthful dissenting voices, that to challenge the government could put that hard-won peace at risk.

  March 27, 2013

• Background

  Angola: Political forces at a glance

  Political outlook: Political forces at a glance

  Present government: José Eduardo dos Santos has been president since 1979, and is the central figure in Angola's political system. Under the new constitution enacted in February 2010, the president appoints the cabinet, which is nominally accountable to an elected National Assembly. The role of prime minister was abolished and replaced with a vice-president, who reports directly to the president and who, under the constitution, would assume leadership of the country if the president died or stepped down. As a result, power is concentrated in the presidency, which oversees all major decision-making. Despite Angola's history of over 30 years of on-off civil war, the military does not intervene in political affairs-largely because Mr dos Santos has been astute at keeping key military figures within his inner circle.

  Parliamentary forces: The ruling party, Movimento Popular de Libertação de Angola (MPLA), has held power since independence in 1975 and has no real rival. Since the early 1990s the party's influence has weakened relative to that of the presidency, although it continues to provide leading ideologues for the government. The MPLA's dominance reflects its formidable organisational apparatus, access to state funds and skilled senior party cadres, which has enabled it to outmanoeuvre, co-opt or coerce opposition parties. Moreover, since early 2010 the MPLA has been strategically buying up private newspapers previously known for espousing an anti-government line.

  The only opposition party with wide grass-roots support is the former rebel movement, União Nacional para a Independência Total de Angola (UNITA). However, UNITA has struggled to shake off its former reputation as a ruthless guerrilla movement bent on overthrowing the government-thereby obstructing its attempts to establish itself as a credible alternative to the MPLA. The head of UNITA, Isaias Samakuva, won a leadership election in December 2011, but he has lost support among those who regard his academic and diplomatic style as a sign of weakness. The charismatic Abel Chivukuvuku has quit UNITA to create his own movement, Convergência Ampla de Salvação de Angola (CASA-CE). This will have little impact on the MPLA's probable victory in August; indeed, it is likely only to split the opposition vote even further, but it could improve the state of competitive politics in the longer term. Only three other parties have seats in the National Assembly: the Partido de Renovação Social (PRS), which has most support in the Lundas; the MPLA's former rival, Frente Nacional para a Libertação de Angola (FNLA), which is based in the north; and a coalition of six smaller parties known as Nova Democracia. A few other small parties operate under a loose coalition, POC (Partidos da Oposição Civil). Although unlikely to win any seats in parliament in the 2012 election, they are helping to bolster a previously weak civil society, largely through increased use of online social networks that provide a platform for debate lacking in the traditional media.

  Several previously unknown groups-led mostly by Angolans in the diaspora and seemingly inspired by regime change in North Africa-emerged in early 2011, organising small anti-government demonstrations. The BD (Bloco Democratico)-a reformed version of the Frente para Democracia (FpD), which was extinguished by the constitutional court in 2008 after it won less than 1% of the vote in the legislative elections-has also become increasingly vocal.

  Seats in National Assembly, 2008
  (no. of seats)
  Movimento Popular de Libertação de Angola (MPLA)	191
  União Nacional para a Independência Total de Angola (UNITA)	16
  Partido de Renovação Social (PRS)	8
  Frente Nacional para a Libertação de Angola (FNLA)	3
  Nova Democracia	2
  Total	220
  Source: Economist Intelligence Unit.

  Download the numbers in Excel

  Next elections: The next legislative election is scheduled to take place on August 31st.

  Download text file (csv format)

  August 23, 2012

• Structure

  Angola: Political structure

  Official name

  República de Angola

  Form of state

  Unitary republic

  Legal system

  Based on the new constitution implemented in February 2010

  National legislature

  Assembleia Nacional (parliament), with 220 seats

  National elections

  August 31st 2012 (legislative); the presidential election was abolished under the new constitution, with the leader of the party with the most parliamentary seats automatically becoming president; the next legislative election is scheduled for late 2016

  Head of state

  President, José Eduardo dos Santos (since 1979)

  National government

  The government is comprised exclusively of members of the ruling Movimento Popular de Libertação de Angola (MPLA); the office of the presidency operates parallel power structures that are generally independent of parliament and government

  Main political parties

  The MPLA has an absolute majority in parliament, with 175 seats; the main opposition party, the União Nacional para a Independência Total de Angola (UNITA), has 32 seats; the remaining 13 seats are divided between three smaller parties

  President & head of government: José Eduardo dos Santos

  Vice-president: Manuel Vicente

  Key ministers

  Agriculture & fisheries: Afonso Pedro Canga

  Commerce: Maria Idalina de Oliveira Valente

  Construction: Fernando Fonseca

  Defence: Cândido Van-Dúnem

  Economy: Abraão Pio dos Santos Gourgel

  Education: Pinda Simão

  Energy & water: João Baptista Borges

  Environment: Maria de Fátima Monteiro Jardim

  Finance: Carlos Alberto Lopes

  Foreign affairs: George Chikoty

  Geology & mines: Francisco Manuel Monteiro de Queiroz

  Health: José Viera Dias Van-Dúnen

  Hotels & tourism: Pedro Mutindi

  Industry: Bernarda Henriques da Silva

  Interior: Ângelo de Barros Veiga Tavares

  Justice & human rights: Rui Jorge Carneiro Mangueira

  Petroleum: José Maria Botelho de Vasconcelos

  Plannin: Job Graça

  Public administration & employment: António Domingos Pitra Costa Neto

  Telecoms & IT: José de Carvalho da Rocha

  Territorial administration: Bornito de Sousa Baltazar Diogo

  Transport: Augusto da Silva Tomás

  Urban affairs & housing: José António da Conceição e Silva

  Central bank governor

  José de Lima Massano

  March 21, 2013

• Outlook

  Angola: Key developments

  Outlook for 2013-17

  • The ruling party, Movimento Popular de Libertação de Angola (MPLA), is set to maintain its domination of the political system, by virtue of its control of government resources and overwhelming majority in the National Assembly.
  • The long-serving president, José Eduardo dos Santos, may step down during this term and hand over power to the former Sonangol chief, Manuel Vicente.
  • Emboldened by the improvement in their performance at the August 2012 election, opposition parties will switch their attention to the long-delayed municipal elections, which are unlikely to take place before 2015.
  • A rise in oil output and investment will drive average real GDP growth of 6.3% in 2013-17. The Economist Intelligence Unit forecasts that crude output will rise from an average of 1.75m barrels/day (b/d) in 2012 to 2.12m b/d in 2017.
  • Inflation slowed to a multi-decade low of 8.9% in January. Assuming that structural measures gradually address underlying distortions, we expect inflation to decline further and to remain in single digits in 2013-17.
  • Owing to high oil prices, the current-account surplus was estimated at 11.1% of GDP in 2012. Despite high oil revenue, rapid import growth driven by capital spending will erode the current-account surplus to 0.6% of GDP in 2017.

  Review

  • The president has called for a refreshing of values and approaches within the MPLA and hit out at cadre deployment. The comments come amid growing dissatisfaction over service delivery and a wave of strike action.
  • The third Africa and South America summit took place in Equatorial Guinea in February. It focused on trade, investment, energy, infrastructure and logistics. Brazil has a particular interest in expanding its role in Angola.
  • Several new transport plans were unveiled in the opening months of 2013 as the authorities tried to reduce traffic queues in heavily congested Luanda. The projects come with no timeframe, and it is unclear if they will be fulfilled.
  • Parliament passed the national budget for 2013 on February 14th. It has budgeted for a fiscal deficit in 2013 but we maintain our forecast of a surplus as oil prices outstrip the government forecast.
  • Sonangol, the state oil company, has secured a EUR1bn (US$1.32bn) loan from the China Development Bank. The loan from the state-owned bank underscores the solid financial reputation of Sonangol.
  • A Sonangol board member has indicated that the phasing-out of fuel subsidies might be back under consideration. Given the increased frequency of street protests, the government is likely to opt for a phased approach.

  March 21, 2013

Economy:

• Background

  Angola: Country fact sheet

  Fact sheet

  Annual data	2011a	Historical averages (%)	2007-11
  Population (m)	19.6	Population growth	2.9
  GDP (US$ bn; market exchange rate)	104.1	Real GDP growth	9.0
  GDP (US$ bn; purchasing power parity)	133.8b	Real domestic demand growth	14.4
  GDP per head (US$; market exchange rate)	5,307	Inflation	13.3
  GDP per head (US$; purchasing power parity)	6,822b	Current-account balance (% of GDP)	8.1
  Exchange rate (av) Kz:US$	93.93	FDI inflows (% of GDP)	15.1
  a Actual. b The Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Background: After gaining independence from Portugal in 1975, Angola plunged into a devastating civil war between the ruling Movimento Popular de Libertação de Angola (MPLA) and the rebel União Nacional para a Independência Total de Angola (UNITA). A peace accord and elections in 1992 failed to bring harmony and were followed by a further decade of fighting, which ended in February 2002 with the death of the rebel leader, Jonas Savimbi. A legislative election was finally held in September 2008, resulting in a crushing victory for the MPLA. Under the constitution approved in January 2010, the presidential election has been abolished and instead the head of the largest parliamentary party is automatically president.

  Political structure: Angola is a multiparty democracy, but in reality power is concentrated in the hands of the MPLA. Under the constitution enacted in February 2010, the president appoints the cabinet, which is nominally accountable to an elected National Assembly. Power is concentrated in the presidency, which has been held by José Eduardo dos Santos since 1979. Of the other political parties only UNITA has significant national backing, although the newly formed Convergência Ampla de Salvação de Angola (CASA-CE) could gain a following in the longer term. However, UNITA has struggled to shake off its former reputation as a guerrilla movement and reconstitute itself as a viable opposition party. It has also suffered from intra-party tensions. Independent civil society has grown in recent years, but its influence remains weak.

  Policy issues: Macroeconomic management has improved in recent years but corruption and a lack of institutional capacity continue to undermine policy implementation. In 2009 Angola's previously frosty relations with the IMF thawed when a sharp fall in oil prices forced it to seek a stand-by arrangement (SBA). The authorities have indicated that they will continue to receive IMF technical support following the expiry of the SBA in March 2012. The government is committed to the diversification of the economy away from its dependence on oil, but the bulk of investment will remain in this sector. Much is made of the relationship with China, but Mr dos Santos is keen to diversify Angola's international partnerships.

  Taxation: Changes to the tax regime are under review. Corporate profits, except those of oil companies, are taxed at 35%. Exemptions from import duties and capital gains tax are offered to foreign investors for projects in priority sectors. Personal income tax is calculated on a sliding scale, starting at 5% and reaching 17% for earnings above Kz230,000 (US$2,408).

  Foreign trade: Exports are dominated by oil. With oil prices and production both set to remain strong, buoyed by the first liquefied natural gas exports (beginning in the coming months), substantial trade surpluses are forecast for 2013-17.

  Major exports 2010	% of total	Major imports 2010	% of total
  Crude oil	96.6	Consumer goods	58.6
  Diamonds	1.9	Intermediate goods	11.9
  Refined petroleum	0.8	Chemicals, minerals, paper & plastics	29.5
  Liquefied natural gas	0.6
  Leading markets 2011	% of total	Leading suppliers 2011	% of total
  China	37.7	Portugal	20.3
  US	21.0	China	17.6
  India	9.5	US	9.5
  Canada	4.1	Brazil	6.8

  Download the numbers in Excel

  Download text file (csv format)

  March 21, 2013

• Structure

  Angola: Economic structure

  Data and charts: Annual trends charts

  
  

  

  March 21, 2013

• Outlook

  Angola: Country outlook

  Angola: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The president, José Eduardo dos Santos, sits at the centre of a vast patronage network, skilfully appeasing conflicting interests both nationally and within his party while underpinning his own position. He and his ruling party, Movimento Popular de Libertação de Angola (MPLA), extended their complete hegemony over the political system by winning 72% of the votes in the August 2012 legislative election, maintaining an absolute majority in parliament. Several younger and reform-minded technocrats were in the new cabinet named in September, but power is likely to remain centralised within the presidential circle. The adoption of a new constitution in January 2010 consolidated the president's grip on power, establishing a presidential-parliamentary system under which the president is no longer elected by popular vote but instead is the head of the party with the most seats in parliament. Although a limit of two five-year presidential terms has been set, this does not apply retroactively, meaning that Mr dos Santos--who has been president since 1979--could remain in the post until 2022, should he so wish.

  ELECTION WATCH: The MPLA secured an absolute majority with just under 72% of the poll in the August 2012 parliamentary election. It has lost 10% of the vote since the 2008 election but still has 175 of the 220 parliamentary seats, giving it total control over the legislature. UNITA secured second place, with just under 19% of the vote. In third place was Convergência Ampla de Salvação de Angola-Coligação Eleitoral (CASA-CE), which did well to score 6%, having been launched only in March.

  INTERNATIONAL RELATIONS: Angola's key foreign policy aims will be to diversify access to international finance, to expand the country's regional and international influence and to consolidate relations with key strategic partners-in particular China, Brazil and Portugal. Angola will continue to deepen its relationship with China through large trade and investment deals, particularly in oil, construction and agriculture. However, civil opposition to Chinese involvement in the country is growing as discontent rises over the influx of Chinese immigrants and the quality of Chinese construction. Strong ties with Portugal will continue despite a judicial investigation in Lisbon into alleged money-laundering by Angolans, with Portugal's financially strapped government keen to attract Angolan investment.

  POLICY TRENDS: During the presidential swearing-in ceremony in September 2012, Mr dos Santos repeated his party's election pledges to improve basic services such as access to healthcare, sanitation, drinking water and adequate housing. Policy will focus on the implementation of the poverty-reduction programme and the "second wave" of infrastructure rehabilitation without jeopardising macroeconomic stability as rising hydrocarbons output boosts government revenue.

  ECONOMIC GROWTH: A steady rise in oil output and historically high global oil prices will drive real GDP growth in 2013-17. The Economist Intelligence Unit forecasts that crude output will rise from an estimated average of 1.75m barrels/day (b/d) in 2012 to 2.12m b/d in 2017. However, given the history of technical delays and the slim possibility that OPEC may try to enforce Angola's quota more strictly, there is a risk that production may increase at a slower rate. Overall, the hydrocarbons outlook for 2013 is bright. The Plutao, Saturno, Venus and Marte (PSVM) field, operated by BP (UK), started production in December 2012 and output will increase during the first half of 2013 until it reaches its capacity of around 150,000 b/d. In addition, the US$10bn liquefied natural gas (LNG) plant at Soyo, which will produce 5.2m tonnes/year, is expected to start shipments during the second quarter of this year, after several delays. This will add to a strong economic performance, and we forecast real GDP growth of 8.3% in 2013. Economic growth will remain robust but will ease after 2013 as the one-off impact of the LNG project is not repeated.

  INFLATION: The capacity of the Banco Nacional de Angola (BNA, the central bank) to support the exchange rate--which plays a key role as a monetary anchor--improved significantly with the recovery in the level of international reserves to more than seven months of import cover in 2012. In addition, the government appears to have ruled out any further near-term reduction in the fuel price subsidy, given popular discontent over high living costs. The year-on-year rate of inflation slowed to a multi-decade low of 8.9% in January. The increase in liquidity in the third quarter of 2013, due to the impact of new oil legislation, could exert some upward pressure on prices, but we expect the monetary policy committee (MPC) to be relatively cautious in loosening monetary policy in order to avoid this. Assuming that structural measures gradually address underlying distortions, we expect inflation to decline further and to remain in single digits over the forecast period. However, this will also be contingent on the ability of the MPC to resist political pressure for a substantially more accommodative monetary policy.

  EXCHANGE RATES: The BNA's ability to support the kwanza through market intervention will depend on the level of foreign-exchange reserves. Falling reserves forced the BNA to loosen the unofficial peg to the US dollar in October 2009, resulting in a sharp decline in the kwanza. Since then the currency has followed a much more stable pattern, and reserves reached a record high in 2012, giving the authorities considerably more firepower available to defend the currency than they did in 2008-09. As a result, we expect the kwanza to remain broadly stable against the dollar in 2013, although the country remains vulnerable to any decline in oil prices. In 2014-17 high global energy prices (by historical standards) and strengthening foreign-exchange inflows will lead to a modest appreciation.

  EXTERNAL SECTOR: Our forecast for the merchandise trade surplus in 2013 is US$47.2bn, as high oil prices and rising hydrocarbons export volumes offset the continued rapid growth in imports. Imports will continue to rise in the coming years, reflecting a recovery in investment and domestic demand. However, large trade surpluses will be sustained in 2014-17, averaging US$53.4bn a year, underpinned by the strength of oil revenue. Booming oil-sector activity will also ensure the continuation of large deficits on the services and income accounts, and the overall current-account position will only just remain in surplus. After narrowing to an estimated 11.1% of GDP in 2012, the surplus on the current account will contract further over the forecast period, to 0.6% of GDP in 2017, given rapidly growing import demand on the back of government-led capital investment.

  March 25, 2013

• Forecast

  Angola: Country forecast summary

  Country forecast overview: Highlights

  • The ruling party, Movimento Popular de Libertação de Angola (MPLA), will maintain its political dominance by virtue of its control of government resources. It extended its hegemony by winning 72% of votes in the legislative election in August 2012, maintaining an absolute majority in parliament.
  • There have been indications that the president, José Eduardo dos Santos, may consider standing down during this term. Manuel Vicente, a former head of the state oil company, Sonangol, is vice-president and first in line to the presidency. If Mr dos Santos does decide to bow out, it will be on his own terms-including, almost certainly, retaining the ability to exercise influence from behind the scenes.
  • The main opposition party, União Nacional para a Independência Total de Angola (UNITA), has struggled to make an impact as a political movement. Its head, Isaias Samakuva, won a leadership election in 2011. UNITA increased its share of the vote in the August 2012 legislative election but will continue to find it difficult to make an impact at the national level.
  • The US$1.4bn stand-by arrangement with the IMF expired in March 2012 and the government did not seek a follow-up programme. It will, however, continue to look to the IMF for technical support.
  • The government will seek to extend or contract new credit lines from China, Brazil and the Paris Club in order to invest heavily in the rehabilitation of infrastructure and other sectors.
  • Economic policy will focus on implementing the poverty-reduction programme and the "second wave" of infrastructure rehabilitation without jeopardising macroeconomic stability as rising hydrocarbons output boosts government revenue.
  • Real GDP growth is forecast to increase to 8.3% in 2013, helped by the start-up of a major liquefied natural gas (LNG) project. Economic growth will ease thereafter as the one-off impact of the LNG project is not repeated, and the Economist Intelligence Unit forecasts that growth in 2014-17 will average 5.8%.
  • Inflation slowed to a multi-decade low of 8.9% in January. Assuming that structural measures gradually address underlying distortions, we expect inflation to decline further and to remain in single digits in 2013-17.
  • Owing to high oil prices, the current-account surplus reached an estimated 11.1% of GDP in 2012. Despite high oil revenue, rapid import growth-driven by capital spending-will erode the current-account surplus to 0.6% of GDP in 2017.

  Country forecast overview: Key indicators

  Key indicators	2012	2013	2014	2015	2016	2017
  Real GDP growth (%)	7.9	8.3	5.8	5.8	5.7	5.7
  Consumer price inflation (av; %)	10.3	9.0	8.5	8.0	7.8	7.7
  Budget balance (% of GDP)	5.7	1.4	0.5	0.6	0.5	0.9
  Current-account balance (% of GDP)	11.1	6.2	4.3	2.8	1.6	0.6
  Total external debt (US$ m)	22,302	22,180	22,069	22,686	23,442	24,676
  Exchange rate Kz:US$ (av)	95.43	95.45	94.33	92.67	90.75	89.83

  Download the numbers in Excel

  Download text file (csv format)

  March 21, 2013

View detailed map

Country Briefing

Land area

1,246,700 sq km

Population

20.1m (2012 World Gazetteer estimate)

Main towns

Population estimates in '000 (2009, Ministério da Administração do Território):

 Luanda (capital): 4,500

 Lubango: 1,011

 Huambo: 904

 Lobito: 737

 Benguela: 469

 Kuito-Bié: 424

 Cabinda City: 399

Climate

Tropical and humid in the north, subtropical with lower rainfall in the south; temperatures are lower and rainfall higher in the central plateau than in the coastal lowlands; the rainy season lasts from October to April; the dry season is from May to September

Weather in Luanda (altitude sea level)

Hottest months, February-March, average maximum temperature 28°C; coldest months, July-August, average minimum temperature 23°C; average annual rainfall about 400 mm

Language

Portuguese (official), Umbundu, Kimbundu, Kikongo and other Bantu-group languages

Measures

Metric system

Currency

Kwanza (Kz)

Time

1 hour ahead of GMT

Public holidays

January 1st and 4th, February 4th, March 8th, April 4thand 22nd, May 1st, June 1st, September 17th, November 1st, November 11th, December 25th and 26th

Moveable: Good Friday, Easter Monday

January 16, 2013