After a 27-year civil war, which caused more than one million deaths and five million displaced, Angola had to rebuild itself after 2002. Since then, the country has allied itself with China. A truly win-win partnership.
The Angolan war devastated the country's economy. And yet, the country quickly recovered: thanks to oil and minerals in particular, the state saw its growth record a double-digit annual jump between 2002 and 2008 - around 10%.
The sharp rise in oil prices at that time and the increase in the rate of production and export largely contributed to this growth. Especially with a client like China, which has become the first destination for Angolan exports, replacing the United States.
But by rubbing shoulders with China too much, we sometimes get lost. Certainly, the beginning of the collaboration between the Land of the Rising Sun and Angola has enabled the development of several sectors in the country. But at what cost ?
A real partnership between the antelope and the dragon
After the civil war, however, Angola did not have much of a choice ... Angola saw the noose tighten with the International Monetary Fund, which offered loans on terms unacceptable to the dos Santos regime. The country therefore turned to a new ally: China. The Asian empire then funded 82% of Angola's reconstruction program in 2004. Trade and financial flows between the two countries exceeded all expectations.
The Development Bank of China (CDB) and the Export and Import Bank of China (EXIM), between them, channeled 71% of the real revenue flows of the Angolan state between 2002 and 2017. The Angola has been by far the largest recipient of Chinese infrastructure finance, with more than € 35 billion in investment loans between 2000 and 2020.
A failed "angolanization"
Chinese loans and investments had, on paper, advantageous conditions, but weakened the policy of "Angolanization", which consists in forcing foreign groups on the spot to recruit local employees.
Against investment, China has made good progress: Chinese lines of credit to Angola stipulated that 70% of public tenders for construction and maintenance contracts were to be awarded to Chinese companies. The policy of “Angolanization”, since the 1960s, has forced foreign entrepreneurs to create 70% of local jobs.
But any law is circumvented, even that concerning "Angolanization". If Angolan texts require foreign groups to recruit locally, the Supreme Court has rendered a judgment which stipulates that foreign entrepreneurs can come with their own workforce if the positions concerned require a qualification that cannot be found on the labor market. Angolan job.
The massive investment of state revenues in the infrastructure of the capital Luanda, as well as the financing and promotion of foreign investment, especially in oil, have not helped to respect “angolanization”. Post-war Angola has remained a highly illiterate country… until today.
Worse yet, since the economic boom of 2002, Angola has attracted more and more Portuguese and Chinese executives who occupy key positions in the central administration of public enterprises.
Despite the jump in GDP during the first decade of the 21st century, poverty rates only declined slightly from 36% in 2002 to 32% in 2017.
Corruption and nepotism at the root of misfortune
Before the end of his reign, José Eduardo dos Santos, President of Angola from 1979 to 2017, established the most corrupt government in the world. He surrounded himself with financial advisers who regularly diverted funds from oil revenues and Chinese loans to the benefit of the presidential family.
The epicenter of the dos Santos' corruption remains the president's daughter, Isabel, who forced the state's commercial bodies into Chinese oil exploitation on disadvantageous terms. According to Transparency International, Isabel dos Santos and her husband Sindika Dokolo themselves facilitated the Chinese monopoly on Angola's oil sector.
The couple have built a business conglomerate with 381 companies in 41 countries, worth almost US $ 4 billion.
After the end of the 38 years of presidency of dos Santos father, the current president João Lourenço has initiated an anti-corruption campaign. Isabel was dismissed from the presidency of Sonangol, the national hydrocarbons company. However, she managed to transfer all of the company's funds overseas. The ex-president, meanwhile, is on the run in Spain.
The only family member to receive a prison sentence is José Eduardo dos Santos' son José Filomeno, who was sentenced to five years in prison for fraud and money laundering.
Today, Angola has been suffering from a terrible recession for six years, which has its origins in the corruption of the old regime and the drop in the price of a barrel of oil in 2016. Angola's external debt has increased from $ 10 billion in 2006 to $ 60 billion in 2020. The ratio of external debt to GDP is ... 124%.
Even though the Angolan government has sought help from the IMF in an attempt to curb its debt, China's CBD holds an overwhelming majority of Angola's external debt. It makes you wonder if a concrete solution exists for Angola, on the verge of bankruptcy.