Why Impoverished Angola Is Targeting a Billionairess
Why Impoverished Angola Is Targeting a Billionairess
For all its oil and diamond riches, Angola is one of the world’s most miserable places to live. Since the end of a brutal 27-year civil war in 2002, the southern African nation has endured the plunder of state funds by a politically connected elite as the vast majority of its 31 million people remained mired in poverty. Some of those implicated in the looting have been linked with Jose Eduardo dos Santos, who stepped down as president in 2017 after 38 years in power and was replaced by his defense minister, Joao Lourenco. The transition precipitated a crackdown on graft, with Dos Santos’s billionaire daughter, Isabel, and his son, Jose Filomeno, among those targeted.
1. How corrupt is Angola?
Graft is so rife that “gasosa,” the Portuguese word for a fizzy drink, has become part of the lingua franca as the term for bribes. The country consistently ranks among the world’s most corrupt by Berlin-based Transparency International. Questionable business deals that helped Isabel dos Santos become Africa’s richest woman -- detailed in an international media investigation called the Luanda Leaks -- are the latest in a succession of scandals surrounding the alleged misuse of government funds and the misappropriation of oil revenue.
2. What is Isabel dos Santos alleged to have done?
Angola’s prosecutor general named Dos Santos and four others as suspects in an investigation into alleged mismanagement during her 18-month stint as chairwoman of state-owned oil company Sonangol. She was stripped of the post in November 2017. An Angolan court separately froze her local assets and those of her husband, Sindika Dokolo, and one of her executives, after prosecutors alleged that the three engaged in illicit transactions with state-owned companies that cost the government $1.14 billion. The Luanda Leaks report, published by the International Consortium of Investigative Journalists, presents evidence that Dos Santos made her fortune through questionable deals with the Angolan state using a web of about 400 companies from Malta to Hong Kong.
3. How has she responded?
Dos Santos, who portrays herself as a self-made woman in a male-dominated business world, denies any wrongdoing. She says she’s the victim of a political vendetta and has vowed to fight allegations against her through international courts. Bloomberg data shows that the 46-year-old, who has lived outside Angola since 2018, has a net worth of about $2 billion. Her business empire includes stakes in Unitel, Angola’s biggest mobile telecommunications company, and two of the country’s biggest private lenders, Banco de Fomento Angola and Banco BIC. She also holds indirect stakes in Portuguese oil company Galp Energia SGPS SA and cable company NOS SGPS SA.
4. What about her younger brother?
The finance ministry says Jose Filomeno dos Santos, 42, sought to siphon $1.5 billion from the central bank just days before his father stepped down as president when he persuaded it that the funds were needed to help Angola secure $35 billion of financing. The central bank made an initial $500 million transfer to an HSBC Holdings Plc account in the U.K. in August 2017 but the authorities there suspected foul play and blocked the payment. The money has since been returned to Angola. Jose Filomeno also denies any wrongdoing and accuses the Angolan authorities of victimizing him because of his family connections. His trial got under way in December 2019. The co-accused include Valter Filipe da Silva, a former head of the central bank.
5. Is Lourenco serious about tackling graft?
Lourenco says he is waging war on corruption -- a campaign that earned him the nickname “The Terminator” -- and points to 45 cases that are before the courts and are aimed at recovering more than $4.1 billion in looted funds as proof of his commitment to the fight. So far, the crackdown has mainly targeted members of the Dos Santos family and their associates; critics say the net will have to be spread wider for him to dispel accusations that his main motivation is to consolidate power and get rid of the old guard. Meantime, Transparency International promoted Angola to 146th out of 180 countries in its 2019 corruption perceptions index, up from 165th the year before.
6. What are the prospects for Angola’s economy?
The economy roared on the back of the resources boom but has gone backward since 2016 due to the collapse in the price of oil, which accounts for the bulk of government revenue and exports. The slump has triggered massive unemployment and soaring inflation. An estimated 28% of the population live on less than $1.90 a day, according to the World Bank. While campaigning for the presidency, Lourenco pledged to orchestrate an “economic miracle” that would lift millions of his countrymen out of poverty. But he’s been hamstrung by a lack of funds and in 2018 sought a $3.7 billion-loan program from the International Monetary Fund to shore up the government’s finances. The IMF expects the economy to pull out of recession this year and expand by an average of more 3% annually through 2024.
The Reference Shelf
- The allegations against Isabel dos Santos and her response.
- Angola ranks No. 11 for oil reserves among OPEC members and No. 4 globally for diamond output.
- The International Consortium of Investigative Journalists’ report on how Isabel dos Santos built her business empire.
- Transparency International’s 2019 Corruption Perceptions Index.
To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net
To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Mike Cohen, Grant Clark
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