Angola: Bracing for Unrest

This month’s slump in the price of crude oil seems to suggest that the slight recovery seen in May-June 2015 was premature. On 6th July, the Brent Crude oil price fell below $60 per barrel for the first time since April and it has since remained there. At the time of writing, it is trading at $56.84 per barrel. This continuation of a low oil price has not only hit the economies of Africa’s oil exporters but also caused a ripple effect in the political sphere and across society. One such country which has felt this is Angola.

Angola’s economy and government are highly dependent on the country’s oil exports. Oil sales represent over 70 percent of government revenue and account for 90 percent of foreign exchange earnings. As a result, the fall in price caused: the government to cut its budget by $17 billion in February 2015; Angola’s currency – the Kwanza – to weaken 15 percent against the dollar between 1st January and 30th June 2015 (the Angolan government devalued the Kwanza on 4th June 2015); inflation to hit a more than one year high of 7.73 percent in February 2015; and the government to increase borrowing to $25 billion for this year. In addition to this, Angola’s petroleum parastatal – Sonangol Group – announced on 13th July 2015, that it plans to find $1 billion in cost savings by the end of the year. This came shortly after the company denied claims in Portuguese media that it had gone bankrupt. Although Sonangol’s Chief Executive Officer – Francisco de Lemos Jose Maria – reportedly said that the company probably won’t fire workers, there is no guarantee that this will be the case if crude oil stays at its current price or falls even further. The World Bank has already reacted to this unfolding situation by agreeing to provide Angola with $650 million in financial support on 2nd July 2015. However, its country manager – Clara Ana de Sousa – was reported as warning that “given the current global environment, Angola needs to put in place a fiscal policy to be able to continue its efforts to diversify the economy, with greater discretionary expenditures, while protecting the poor and most vulnerable”.

Such economic conditions have unsurprisingly impacted Angolan politics. The MPLA government of Jose Eduardo dos Santos, who is in his 36th year as Angola’s president, appears to be worried that the falling oil price will lead to unrest. Oil revenue has long been the financial backbone of dos Santos’ regime, which has used it to buy support and quash opposition to its patronage politics. The president, his family, and senior government figures have all been accused of exploiting their positions and stealing money from the Angolan state. An IMF report from 2011 showed that during the period 2007-2010, $32 billion, or 25 percent of GDP, could not be accounted for. This level of corruption is also reflected in Transparency International’s Corruption Perception Index 2014, which found Angola to be the 14th most corrupt country in the world. As falling oil prices have hit government revenue, the dos Santos regime is acutely aware of its diminishing ability to placate opposition through buying them off. Cuts in government spending have already hit a key support base for the MPLA – government employees – which may alter their allegiance if conditions do not improve. Thus, the party are conscious of the fact that they need to be prepared for the possibility of increased popular opposition.

As a result, the government have cracked down on youth opposition groups. On 26th June 2015, the government released a statement informing the public that over the past week the security services had arrested 15 youth activists for allegedly preparing acts of collective disobedience to overthrow the government and unseat dos Santos. This was followed by the arrest of Captain Zenobio Lazaro Muhondo Zumba, an intelligence officer allegedly connected to the detained youth activists, on 30th June 2015. In addition to this, the government has reportedly increased the military’s presence in the capital Luanda. This is highly significant as Luanda has long been a strong support base for the MPLA. Thus, it appears that the government are preparing to combat unrest amongst its supporters.

Furthermore, dos Santos has also postponed his succession in reaction to the current conditions. In a statement provided to the state-run news agency – Angop – dos Santos said “in restricted circles it was almost a given that the president wouldn’t carry out his mandate until the end, but it’s evident that it’s not wise to consider that option under the current circumstances”. This seems to suggest that dos Santos is concerned that a change in leadership combined with the current economic conditions could pose a threat to the MPLA’s rule. Nonetheless, his current mandate finishes in 2017 and due his age and rumours about his health, it is likely that he will want to resolve the succession question by the end of his mandate.

Although the dos Santos regime appears to be concerned about the MPLA’s future in light of the low oil price, it is unlikely that any opposition could currently challenge their rule. Angola’s opposition parties are weak and the MPLA have the full support of the country’s security services. The fall in the price of oil will undoubtedly put pressure on the regime and its patronage system but it’s unlikely to pose a major threat in the near future. Nevertheless, if prices remain low it’s possible that the regime may begin to struggle to pay the security forces wages, which could potentially lead to a far more dangerous opposition. However, it will be a priority of the government to avoid this from happening and at the time of writing it seems that this is a highly unlikely occurrence. The only concern which remains is the question of dos Santos’ succession. The longer this remains unresolved, the greater the threat it could potentially pose to the ruling party. Dos Santos has delayed the process so as to try to ensure that the MPLA have weathered the storm of falling oil prices before the decision is made. However, if the decision is forced on the MPLA through dos Santos’ apparent poor health, the party may struggle to contain unrest while trying to select a new leader. Thus, it is likely that dos Santos will try to resolve this question before the end of his mandate.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s