Angola

Politics:

• Analysis

  Angola politics: Quick View - National census is delayed again

  Event

  Angola has postponed its long-awaited census until 2014, citing administrative delays caused by the holding of elections in August this year.

  Analysis

  The country has not held a full census since 1970-before independence from Portugal-and accurate data, even regarding population size (estimated to be somewhere between 16m and 21m) is extremely hard to come by. In 2001 just before the end of Angola's protracted civil war, the UN Children's Fund (Unicef) carried out a multiple-indicator cluster survey to assess poverty levels, immunisation rates, and access to water and sanitation. This data was published in 2003, and in 2008 a follow-up survey, known as the Inquerito Integrado sobre o Bem-Estar da Populacao (IBEP), was carried out in conjunction with Unicef, the World Bank and the Ministry of Planning. Published in 2010, the IBEP has been the main source of social data in Angola, though the small sample size and claims that the national poverty rate is only 36.6% have cast some doubts on its statistical soundness.

  Such is the shortage of accurate or credible data in Angola that statistics have taken on a political identity and are rarely shared, even between government departments and even less so to international donor agencies or academics. The long-awaited census is supposed to change that, and tackle allegations that international organisations and media houses judge Angola unfairly owing to out-of-date statistics. Furthermore, with more contemporary data, the government hopes it can improve its spending plans to direct public resources to where they are most needed. However, a 15-day pilot census that was due to take place this year will now only take place in 2013, so the full census, known as the Recenseamento Geral da Populacao e da Habitacao (RGPH), has been put back until 2014. Officials at the National Statistics Institute, who in early October appeared quite confident that the census would take place in 2013, have blamed a lack of cartographic data and have also said that the elections interrupted plans for the pilot this year.

  The president, Jose Eduardo dos Santos, had said that once the census was complete, the country could proceed to its first local and municipal elections in 2013. This will now not be the case, with the minister for territorial administration, Bornito de Sousa, indicating that 2015 is a more realistic target. Some analysts have speculated that delaying the census could be a deliberate move, as the authorities are worried about allowing devolved power. It was also clear from the voting patterns of the August 2012 general election that several municipalities in the capital, Luanda, would be won by opposition candidates.

  December 06, 2012

• 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.

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

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  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

  Planning: 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

  December 11, 2012

• Outlook

  Angola: Key developments

  Outlook for 2013-17

  • The ruling party, Movimento Popular de Libertação de Angola (MPLA), is set to continue its dominance 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 polls in the August 31st election, opposition parties will switch their attention to the long-delayed municipal elections, which have been promised for 2013 or 2014.
  • A rise in oil output and investment will drive average real GDP growth of 6.4% in 2013-17. We forecast that crude output will rise from an average of 1.76m barrels/day (b/d) in 2012 to 2.23m b/d in 2017.
  • Inflation slowed to a multi-decade low of 9.7% in September. 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 is estimated at 12.4% of GDP in 2012. Despite high oil revenue, rapid import growth driven by capital spending will erode the current-account surplus to 2.5% of GDP in 2017.

  Review

  • Speculation is rife that the Democratic Republic of Congo (DRC) has sought military support from Angola to counter the M23 rebel group. Angola denied that it is planning to send troops and called for a "non-military" solution.
  • Any solicitation from the DRC for help will probably be used by Angola as leverage in a long-running oil block dispute. For over five years the DRC has claimed ownership of several hydrocarbons concessions offshore of Cabinda.
  • The president has called for better access to a US$3.5bn new housing development that remains largely empty a year after completion. The New City of Kilamba has been called a "ghost town" by critics.
  • Angola's crude oil production increased to 1.79m barrels/day (b/d) in October, from 1.75m b/d in September, according to the International Energy Agency, driven by the completion of field maintenance work.
  • The 150,000-b/d Plutao, Saturno, Venus and Marte field operated by BP will begin production in December. It is located in the north-east of Block 31, which spans 1.3m acres offshore. The first cargo is expected to load in January.
  • BP's chief executive, Bob Dudley, said on December 4th that the delayed liquefied natural gas project at Soyo, which was scheduled to start earlier in 2012, is now expected to begin operations in 2013.

  December 11, 2012

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)	104.6	Real GDP growth	8.1
  GDP (US$ bn; purchasing power parity)	139.8	Real domestic demand growth	12.1
  GDP per head (US$; market exchange rate)	5,331	Inflation	13.3
  GDP per head (US$; purchasing power parity)	7,124	Current-account balance (% of GDP)	8.1
  Exchange rate (av) Kz:US$	93.74b	FDI inflows (% of GDP)	15.2
  a Economist Intelligence Unit estimates. b Actual.

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  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-but it 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 SBA's expiry in March. The government is committed to diversifying the economy away from its dependence on oil, but the bulk of investment will remain in this sector. Although much is made of the relationship with China, Mr dos Santos is keen to diversify the country'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

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  December 11, 2012

• Structure

  Angola: Economic structure

  Data and charts: Annual trends charts

  
  

  

  December 11, 2012

• 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 the 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 votes in the legislative election in August, 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 as president until 2022, should he so wish.

  ELECTION WATCH: The MPLA scored an absolute majority with just under 72% of the poll in the August parliamentary election. It has lost 10% of the vote since the 2008 election but maintained its absolute majority--it has 175 of the 220 seats in the new parliament--giving it total control over the legislature. The main opposition party, União Nacional para a Independência Total de Angola (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 only been launched 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 that country's financially strapped government keen to attract Angolan investment. There has been little progress on a Joint Way Forward agreement with the EU-perceived as an interim move towards a full strategic partnership-with Angola apparently prioritising individual bilateral agreements.

  POLICY TRENDS: During the presidential swearing-in ceremony in September, Mr dos Santos repeated his party's election pledges to improve basic services such as access to healthcare, sanitation, drinking water and adequate housing. He also stressed a commitment to good governance and transparency in the management of public assets, as well as the strengthening of finance mechanisms. 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.

  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 average of 1.76m barrels/day (b/d) in 2012 to 2.23m 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. A giant US$10bn liquefied natural gas (LNG) project is finally expected to begin exports in the coming months, although it has suffered from several delays. This will add to a strong economic performance, and we forecast real GDP growth of 8.9% in 2013. Economic growth will remain robust but will ease after 2013 as the one-off impact of the LNG project is not repeated, and we forecast that growth in 2014-17 will average 5.7%, underpinned by a steady expansion in oil production. Growth will remain capital-intensive and import-dependent, with few linkages to areas of the economy other than government-dominated sectors such as construction and finance. The development of a dynamic private sector will be hindered by weak human capital, a flawed judicial system, poor regulation, corruption and the crowding-out of private investment by the public sector.

  INFLATION: The capacity the Banco Nacional de Angola (BNA, the central bank) to support the exchange rate--which has a key role as a monetary anchor--has 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 9.7% in September 2012. 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 monetary policy committee to resist political pressure for a substantially more accommodative monetary policy.

  EXCHANGE RATES: Despite the strong recovery in oil revenue and inflows of foreign direct investment, 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 of over US$33bn in mid-2012. With continuing large current-account surpluses in prospect, the authorities have 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 over the next two years, 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$51.3bn 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$58.3bn a year, underpinned by the strength of oil revenue. Booming oil-sector activity will also ensure continuing large deficits on the services and income accounts, but the overall current-account position will remain in healthy surplus. After narrowing to an estimated 12.4% of GDP in 2012, the surplus on the current account will contract further over the forecast period, to 2.5% of GDP in 2017, given rapidly growing import demand on the back of government-led capital investment.

  December 10, 2012

• Forecast

  Angola: Country forecast summary

  Country forecast overview: Highlights

  • The ruling party, the Movimento Popular de Libertação de Angola (MPLA), will maintain its dominance of the political system by virtue of its control of government resources. It extended its hegemony by winning 72% of votes in the legislative election in August, 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, formerly 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 December 2011. UNITA increased its share of the vote in the August legislative election, but it will continue to find it difficult to make an impact at the national level.
  • Relations with the IMF entered a new era in November 2009 with the approval of a US$1.4bn stand-by arrangement (SBA). This expired at the end of March 2012 and the government will not seek a follow-up SBA-however, it will 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.
  • Real GDP growth will have accelerated to an estimated 7% in 2012, driven by rising oil output. It is forecast to increase to 8.9% 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 we forecast that growth in 2014-17 will average 5.7%.
  • Inflation slowed to a multi-decade low of 9.7% in September. 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 will have reached an estimated 12.4% of GDP in 2012. Despite high oil revenue, rapid import growth driven by capital spending will erode the current-account surplus to 2.5% of GDP in 2017.

  Country forecast overview: Key indicators

  Key indicators	2012	2013	2014	2015	2016	2017
  Real GDP growth (%)	7.0	8.9	6.3	5.7	5.7	5.2
  Consumer price inflation (av; %)	10.2	8.6	8.5	8.0	7.8	7.7
  Budget balance (% of GDP)	10.7	6.7	4.9	3.7	2.0	0.4
  Current-account balance (% of GDP)	12.4	9.1	6.9	5.1	3.7	2.5
  Total external debt (US$ m)	19,614	19,360	18,863	19,022	19,331	20,020
  Exchange rate Kz:US$ (av)	95.51	95.45	94.33	92.67	90.75	89.83

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  December 11, 2012

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

March 15, 2012