Angola slipping into a recession and on the verge of Venezuela situation
WHEN Joao Lourenco became the President of Angola in September he promised to revive the country’s economy by attracting more foreign direct investments and combat corruption.
Lourenco was appointed by the People’s Movement for the Liberation of Angola with the blessing from Jose Eduardo dos Santos whom he was seen celebrating with while holding hands in 2016.
Rising oil prices and sound policies coupled with a “refreshed” cabinet and ministers are his trump card to an economy that according to local economic indicators is experiencing a mild recovery although its currency has experienced a 40 percent dropped in value past seven months.
According to the International Monetary Fund, Angola’s economy is projected to grow by 2,3 percent this year from one percent last year.
The country’s inflation is expected to reach 24,8 percent year-on-year in December from 22,7 percent in January.
As, Angola’s economy gradually grows, more focus has been on former vice president Manuel Vincente who has return to the heart of political power in Angola.
By bringing Vicente back into a position of political influence and shielding him from various international corruption investigations, President Lourenço has found a fire-starter in his campaign to consolidate his own authority it is largely believed that the only people he is seeking to prosecute are JES members of the one that willingly passed the torch over, choosing Jlo instead of Vicente.
Market watchers say Vicente’s return carries significant political, reputational, and transparency risks that are likely to undermine a government’s popular manifesto of probity and economic liberalisation given his record when he was vice president.
Vicente, through his family and close associates reportedly still maintains an extraordinary position of influence over the economy. He was once part of the all-powerful ‘Triumvirate’ that dominated Angola’s business sphere.
Through a network of investments and commercial holdings, Vicente is still one of the wealthiest and most influential powerbrokers in Africa. Even though he was politically side-lined towards the end of the previous administration, he retains commercial interests across key sectors such as banking, telecoms, oil and gas, and logistics.
Over the past year, Vicente has regained much control over the state oil company Sonangol, as well as the central bank and finance ministry, where his political allies have been appointed into leadership positions.
Vicente and son (Mirko Jesus Martins) family are also creating new commercial ties with the family of President Lourenço, while his closest business associates are said to be benefitting from recent contract allocations and from the protection of President JLourenco
As the spotlight continue to be on Vincente, the Angolan government struggles to adopt and apply measures to revive the economy including devaluing its kwanza currency, restructuring state oil company Sonangol and promising to reduce foreign and domestic debt.
The country is also restricting its mining sector which is expected to improve efficiency and increase the sector’s contribution to the national economy but that industry is equally in need of restructuring following the Endiama Chinas candal.