Search Results for: oil price

Low Oil Prices Undo Angola

The crash in the price of oil has hit Angola hard.  Hospitals across the country are low on resources, including medicines.  There are food shortages in the North, drought in the South.  From Cabinda to Namibe, empty shelves in the stores attest to the government’s lack of response. If people are facing such serious difficulties in their day-to-day lives (in the so-called ‘micro’ economy) matters are no better on the macroeconomic scale where double-digit inflation is taking its toll. According to the National Institute of Statistics, inflation in the capital Luanda was running at 1.4% between September and October 2015.  Additionally, in the first months of 2016, the Kwanza has been devalued by 26%. The reason for all this is the low price of oil.  According to the United Nations Development Program, Angola has the least diversified economy in the world after Iraq.  Any fall in the price of a barrel […]

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Government Profits from Beer and Blames the Oil Prices

The crisis, which the government blames on falling oil prices, has been used to disguise a much older and deeper crisis  that already existed long before the reasons given by the government lately. The Court of Accounts provides some alarming evidence in its report to parliament on the Government’s Budget Execution Report for 2013 . According to the Court of Accounts report, reviewed by Maka Angola, in 2013 the state was paid dividends to the tune of 95.4 million Kwanzas (US$954,000) on its direct shares in a total of 37 companies. The sum is ridiculously low given the government’s multi-billion dollar investments in the private sector. Apart from the national oil company Sonangol, the state only made a profit on beer sales from its shares in three beer producers. Dos Santos’ government billed Cuca for 67.9 million Kwanzas; a further 23.5 million from N’gola and another 4 million from Eka. […]

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Crashing Oil Prices, Propaganda and the Angolan Recipe for Disaster

Throughout the Angolan capital, Luanda, strategically located billboards announce a country being happily stewarded through development by the government. “Building a prosperous Angola based on solidarity”, is the boastful slogan across all ads celebrating the government’s achievements in all spheres of life. One such billboard celebrates “more electricity, more development”, in spite of the regular power outages. Such a massive propaganda exercise outside the electoral period has a precedent only in the early 1970s, when the Portuguese colonial authorities desperately tried to sell the idea that their rule was making people very happy, and independence could ruin all such great achievements. Nonetheless, this propaganda is in full swing at a time when the steady drop in the oil price on international markets could be good news for the Angolan people and a bad omen for their rulers. As a major countermeasure, last December the presidency decreed a 20 percent rise […]

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Sonangol “Can’t Even Afford Toilet Paper”

Employees at the Angolan oil giant have flushed out some startling news about Sonangol’s continued decline. Since President José Eduardo dos Santos put his daughter, Isabel (Africa’s first female billionaire), in charge the oil giant’s fortunes “are in the toilet”. At the company’s headquarters, in a custom luxury US $400 million  building, in which over-invoicing reached hallucinatory levels, officials are confronted with a stark reality. Apparently, Angola’s most important enterprise can’t afford to supply its own washrooms. “Every worker has to bring their own toilet paper from home because Sonangol has been unable to pay its suppliers and we have a toilet paper crisis,” one official resignedly told Maka Angola. Staff fear they’ll become the butt of jokes. They say the situation is out of hand. Only the denizens of the 18th, 19th and 20th floors – where Isabel and her coterie of expatriate ‘consultants’ have their dens – are […]

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Oil & Money: Sonangol’s Extravagant Conference in London

Some of the most powerful players in the global oil and gas industry will be meeting in London on October 18-19, for the Oil & Money annual conference. Hosted jointly by the New York Times and Energy Intelligence, the conference is described as a “must attend” – a gathering of “over 450 of the most influential senior decision-makers from the industry, along with government ministers and representatives, financiers and bankers, consultants and legal experts.” The conference agenda boasts of hours of “effective network opportunities…in a crowd large enough to be powerful, small enough to be intimate.” Tickets for the conference cost £2,490 (544,000 Kz), not including attendance at the Petroleum Executive of the Year Dinner which will set you back an extra £525 (115,000 Kz). Who are the sponsors of this lavish affair? The list of donors includes big-hitters like Chevron, ExxonMobil and Dow Chemical but also a host of […]

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Angolan Oil Greases a Trio of Palms

At a time of prolonged economic crisis, Angola has an interesting way of prioritizing who gets first dibs on its dwindling supply of foreign exchange. Angola’s President José Eduardo dos Santos recently told the central committee of his ruling MPLA (People’s Movement for the Liberation of Angola) party that the government had not received any contribution from Sonangol (the national oil company) since the beginning of the year due to the sharp decline in oil price. He added: “the income Sonangol does derive is barely enough to pay its own and the State debts.” Dos Santos admitted that this was causing a foreign exchange crisis for the National Bank of Angola, the BNA, which was only able to muster approximately US $300 million per month. That comes from receivables from foreign oil companies working in Angola, who are required to exchange their national currencies into Angolan kwanzas to pay in-country […]

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Oil and Cement Don’t Mix With Corruption in Angola

Angolan business practices are under the microscope again after a US$800 million  government-backed cement factory suspended production, and its recently dismissed CEO announced a sell-off of shares whose ownership is in question. An investigation by Maka Angola suggests the confusion surrounding the state of affairs at the Kwanza Sul Cement Factory (Fábrica de Cimento Kwanza Sul) can be traced directly to Angola’s ‘unique’ business practices under the current MPLA government, led for the past 36 years by President José Eduardo dos Santos. The Angolan colonel who founded the company has been sacked, the operating costs have become uneconomic and the Danish company LNS in charge of running the plant says it’s owed US$20 million in unpaid fees.  Legal experts have told Maka Angola that the uncertain future of the Kwanza Sul Cement Factory (FCKS) is directly related to its tangled history. Ownership and finances as clear as mud The origins […]

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Angola: When the Wolves can Dance with the Goats

This is an edited version of the presentation made at the Conference: A Celebration of Mandela’s Legacy and a Reflection on Democracy and Good Governance in Africa.   I am honored to return to the European Parliament as a guest of the Socialists and Democrats Group, for Africa Week. This meeting is special – it coincides with the centenary of the birth of one of Africa’s most celebrated leaders, Nelson Mandela. So it is a fitting day on which we take the opportunity to pay homage to his wise legacy and share our views on democracy and good governance. In Africa, what counts as democracy and good governance? The definition of these two concepts has spawned many political arguments – not to mention an entire industry of scholarship. In homage to Mandela, and with regard to the relationship between rulers and the ruled on the African continent, allow me to […]

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Isabel dos Santos and the Right of Reply

Isabel dos Santos, self-described ‘African billionaire businesswoman’ and head of the Angolan national oil company, Sonangol, (appointed by her father, the President of Angola, José Eduardo dos Santos) was clearly rattled by the report published here on Maka Angola last week, entitled ‘Sonangol’s Slush Fund Salaries’ and has sent an official response. Maka Angola is delighted to afford the Sonangol President the right of reply. Sonangol’s ‘Official Reaction’ states (without offering proof) that the report was incorrect. And yet, instead of supplying alternative data, the response serves to confirm the inside information supplied to Maka Angola. (1) Sonangol’s whistleblowers reported elevated salaries for the board. And outrageous expenses and consultancy fees for a cabal of Portuguese nationals, effected overseas to avoid paying Angolan tax. The President’s daughter confirms that fees for the board of directors were raised to keep pace with inflation – in effect at the very least a […]

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Sonangol’s Billion-Dollar Headache

Evidence has reached Maka Angola that Sonangol’s debts to major oil corporations are far in excess of the US $300 million  owed to Chevron as reported last month. Faced with a Sonangol news release that noted the Chevron monies were “under review” prior to payment, other foreign creditors have grown anxious about the multi-million sums they too are owed. Maka Angola has been supplied with figures showing unpaid cash calls to three other oil majors operating in the Angolan oilfields. They reveal that as of October 2016, Sonangol owed its creditors at over one billion US dollars. To date, Sonangol has only effected payments to companies owned by associates of President José Eduardo dos Santos and his daughter, Isabel dos Santos, the current Sonangol President. President dos Santos sacked the previous Sonangol board and installed his daughter back in June, in a move that shocked the global oil industry given […]

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