Angola Sets Up Body to Oversee $5 Billion Fund After Probe

(Bloomberg) -- Angola’s Finance Ministry will set up a supervisory committee for the nation’s $5 billion sovereign wealth fund after an investigation found that its processes are inconsistent and opaque.

The southern African nation will also increase oversight of Fundo Soberano de Angola by the ministry, the presidency and the central bank, the Luanda-based Finance Ministry said in a statement on its website Friday.

This week, President Joao Lourenco dismissed the son of his predecessor Jose Eduardo dos Santos -- Jose Filomeno dos Santos -- as chairman of the fund, further loosening the grip of the Dos Santos family on key areas of state.

The increased oversight will “guarantee more efficient and transparent management of the state’s strategic resources,” the ministry said.

Lourenco, 63, assumed office in September following elections that marked the end of the 38-year rule of Jose Eduardo dos Santos, who said he wanted to quit active politics. The new leader has already removed his predecessor’s daughter, Isabel, as chairwoman of the state-owned oil company Sonangol, and fired the central bank governor and the head of diamond company Endiama. He has also terminated management contracts for state TV channels with two other Dos Santos children.

Lourenco has vowed to stimulate growth by tackling corruption, selling stakes in state-owned companies and encouraging wealthy Angolans abroad to repatriate their funds. He may next take aim directly at Jose Eduardo dos Santos, who still heads the ruling People’s Movement for the Liberation of Angola, or MPLA. At a press conference on Monday to mark his first 100 days in power, Lourenco reminded his 75-year-old predecessor of his pledge to leave politics in 2018.

The country appointed an international consultancy that it didn’t identify to assess the management and allocations of assets in the fund, as well as its cooperative-governance structure, the ministry said. It found that there is a lack of transparency in the processes used to contract asset managers and service providers, and that the government exercised “weak control and oversight” of the fund’s work.

It also found that the fund is exposed to higher risk because a high volume of assets are handled by a single external asset-management entity.

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