Financial Crime World

Corruption in Angola: A Threat to Economic Development

Widespread Corruption in Angola’s Sectors

Angola, a country rich in natural resources, has been plagued by corruption in its oil, financial, and infrastructure sectors. This widespread problem has significant implications for the country’s economy and citizens.

Oil Sector Corruption

  • The “Angolanisation” of Sonangol, the state-owned oil company, led to the appointment of regime insiders who used their positions for personal gain.
  • This lack of transparency and accountability has resulted in corruption within the company, negatively impacting Angola’s economy.

Financial Sector Corruption

  • The Angolan sovereign wealth fund was created with an initial capitalization of $5 billion but has since been used according to standard appropriation strategies for financial institutions.
  • Jean-Claude Bastos, a long-time associate of President dos Santos’s son, José Filomeno dos Santos, was appointed as the fund’s manager and paid $90 million in management fees between 2014 and 2015.

Infrastructure Corruption

  • There has been a high level of infrastructure corruption in Angola since the early 2000s.
  • Many major infrastructure contracts were issued to firms owned by regime insiders without competitive bidding processes, resulting in overpricing and a lack of transparency.

Appropriation Strategies

  • The general process of appropriation from infrastructure projects involves pricing the project above what it should cost and then subcontracting the construction to a foreign firm for less money.
  • The Angolan government and Angolan banks often ultimately assume most of the financial costs, while allowing the patronage company to retain a disproportionate share of ownership.

Investigations and Consequences

  • Corruption investigations have been launched in Portugal against the Santo family, BES employees, and members of the Angolan elite.
  • Several individuals have been arrested or charged for their involvement in corruption scandals.

Economic Impact

  • The corruption has had a significant impact on Angola’s economy, leading to losses for the government and citizens.
  • The country’s infrastructure is also suffering due to the lack of transparency and accountability in project management.