Angola’s development is hampered by unrestrained concentration of power

The doctor looked at me gleefully: I was only the second person to go to Angola during his time at the vaccination clinic. Angola is very little known and talked about in Denmark, and yet it is a huge country with a colorful and tragic history that should rise like a Phoenix from the ashes.

By Karen Helveg Petersen

Artiklen er tidligere udgivet på dansk på Solidaritet.dk

After independence from Portugal in 1975, a civil war broke out that lasted 27 years. In 1979, the first president and liberation hero Agostinho Neto died, and José Eduardo dos Santos – also from the dominant MPLA party – took over and held on to the presidency until the 2017 elections. His successor, João Lourenço from the same party, announced a break with his predecessor’s nepotistic and outright corrupt policies by firing Isabel, dos Santos’ enterprising daughter, as head of the state oil company Sonangol, the mainstay of Angola’s economy. Lourenço also made other attempts to bring key figures in the former regime to justice, but since they would affect the entire economic structure, they petered out.

So now, almost 9 years later, where is Angola? President Lourenço has engaged in diplomacy, mediating between DR Congo and Rwanda, and Angola is promoting itself internationally as a tourist destination, backed by, among others, CNN, which likes to pan across the Marginal Boulevard in Luanda when the TV channel wants to show how impressive and modern the capital is. It is also beautifully situated on a bay, with a peninsula, Ilha do Cabo, on the other side.

Major projects are underway, hydroelectric power plants are being built with Chinese financing and contracting. Next year, no less than four hydroelectric power plants with a total capacity of over 5500 MW will be located within a short distance of each other on the Kwanza River, which has also given its name to the currency. A couple of large solar PV parks, which have received Swedish export credits, among other things, can be noted in the province of Benguela.

Foto: Karen Helveg Petersen

This does not mean that the small huts will be lit up, because it is a very concentrated capacity, and the country is 1.246 million square kilometers with a population of 36.6 million, of which at least a quarter live in Luanda. Rather, modern high-technology projects will see the light of day.

The most important project right now is the Lobito corridor between Angola, DR Congo and Zambia. The port city of Lobito, which has practically merged with the old colonial city of Benguela, is located just over 500 km south of Luanda. The corridor forms the area around the old colonial railway, which has been rehabilitated and goes to Kolwezi in the DRC. It is to be extended with a branch into the copper belt in Zambia. The corridor project is supported by the EU through the Global Gateway program and even by the United States with credits, as well as by many other financial institutions, and is based on a trilateral agreement under the Southern African Development Community (SADC). The United States shamelessly admits that the importance of the project lies in securing minerals. Another initiative is a highway between Angola and Zambia, which share a 1500 km border, but so far without a paved road between them.

 

Out of oil dependence?

Angola survived the civil war by means of fossil fuel revenues. However, oil production has fallen sharply, now at around 1.1 million barrels per day compared to 1.85 million in 2015, but gas extraction is increasing. At the same time, it has become indebted, especially to China’s public banks, which are not very keen on debt forgiveness. The debt is almost 64 billion dollars, this year 16 billion will be paid in interest and principal alone. This represents over 46% of the government budget. Yet the debt will not fall, it will only constitute a smaller part of GDP. There has been a movement from loans abroad to the domestic market, where interest rates are higher. Angola recently entered into an agreement with the World Bank that will reduce the debt burden slightly against Angolan investments in education. China, which is an off-taker of approx. 70% of the oil, has taken security in the oil resources for a – albeit decreasing – part of its outstanding debt.

94% of exports and 60% of government revenue came from oil and gas in 2024 according to the IMF. Others believe the share is 98% and even higher than in 2014. Initiatives are aimed at reducing imports. Thus, the construction of 3 new refineries is underway. One, in the enclave of Cabinda, which is wedged between DR Congo and Congo-Brazzaville, is ready to start production. The second, which will be able to handle 200,000 tons of crude oil per day, is being built outside Lobito. The third still needs a financing agreement.

The new mega-airport is so far underutilized. Nearby is an economic zone that – in addition to easy access to the airport and the port of Luanda – offers cheap electricity, water and labor power. It has so far attracted investors from 20 countries (including Eritrea), producing food and consumer goods, hygiene products, medicine and equipment, as well as an assembly plant for cars, including Volvo, and various logistical services.

The cement industry also needs a boost. Imports were banned but reopened, and there is some export to DR Congo, but overall capacity is underutilized. Production is expensive and inefficient.

The official policy is to increase the breadth of the economy, promote black granite and agricultural products for export. Coffee production is to be revived, in addition to avocados, bananas and mangoes. Sugar production and refining are also on the agenda. Passing by the large energy projects around the country, you can see modern agro-industries. Complaints are that many such projects and other land acquisitions have preempted the customary land rights of small farmers who have difficulty transitioning to formal title owners.

Many Chinese companies have settled in Angola. They are responsible for the construction and maintenance of roads, which are criticized for being of poor quality, and of housing complexes, as well as for aluminum production (from 2027), agro-industry and consumer goods. But there are fewer Chinese people in the country than just a few years ago.

Small, thin children

Investors complain about ‘capital humano’, and there is good reason for this, as schooling is extremely inadequate. It is shocking to learn that whereas there were perhaps 2 million children in 2014 who did not go to school, now the number is more like 3-4 million. Schools are being built, but they are not necessarily located where the children are most numerous.

Angolese villlage. Foto: Karen Helveg Petersen

That is why NGOs play a significant role in ensuring schooling for at least some of the children who would otherwise not get the chance. I visited a literacy project in a deserted slum area outside Benguela, where heroic teachers taught groups of students – including some adult women – writing on blackboards that pupils dutifully copied their notebooks. Mamas Optimistas is the name of the Angolan NGO that is responsible for the initiative with contributions from Soroptimists and a Danish-Angolan friendship association in North and West Jutland. Teacher training also receives help from NGOs. In addition to activities in civil society, health and agriculture, ADPP (Development Aid from People to People) has built teacher training colleges in 14 of the 21 provinces that are very close to the needs and opportunities of the population. They collaborate with the government, which pays the salaries of the teachers. ADPP projects are also supported by international organizations and private foundations.

The shocking thing is that hunger is widespread. Small, thin children run around in the countryside and in slums. The health sector is also deficient.

Water shortages are widespread. The coast is characterized by dry landscapes, culminating in the Namibe Desert in the south. In addition, there is a drying up of resources and less rainfall, undoubtedly as a result of climate change. This affects both agriculture and domestic water.

When you drive around the country, you see ruins everywhere, partly just plain decay, partly as a result of the destruction from the civil war, partly unfinished construction or buildings that are simply not in use. The impression is one of disorder. In the countryside, most people live in huts made of adobe (earth, sand, clay and straw) with either straw or tin roofs with stones laid on top. They are also in varying degrees of decay.

But then suddenly there is ‘nice’ new construction. It is by no means unambiguous.

Much of this is about governance, not about the country’s lack of funds. Institutions are rigid, bureaucratic, hierarchical. Budget allocations are largely fictitious. Educational institutions may receive a grant, but not the full amount, or it is paid in kind. One can imagine that the middlemen then get a little extra that way.

Colonial period and civil war

Angola officially became a Portuguese colony in the 16th century, and the slave trade not only flourished, but the central-west African coast became the area that sent the most slaves to the New World. The Portuguese settled and mixed to a limited extent with the population of Luanda and Benguela, leaving behind relatively modern agriculture, fishing, infrastructure and quite impressive buildings.

Three different liberation movements fought for independence from the late 1960s. The MPLA is the more left-wing, and initially socialist, and was dominant in the capital and the northern coastal area. UNITA was based in the south and east and the FNLA in the northeast, both with a conservative traditionalist orientation. There were also fights between them, partly due to political orientation and partly due to ethnic differences. They were later known to be kept alive by the resources that were exploited in their respective territories, the MPLA had the oil and UNITA the diamonds. The FNLA and UNITA fought against the MPLA. Independence on November 11, 1975 was accompanied by a temporary lull in the fighting, but it flared up again. The FNLA did not last long, while UNITA continued. Before independence, the MPLA had been helped by the Soviet Union and Cuba, while the United States (CIA) and South Africa were on the other side. They brought modern weapons. This pattern continued until the United States shifted its sympathies to the MPLA in 1993 under Bill Clinton, who launched a new peace process.

When the civil war finally ended in 2002, UNITA became a Christian-democratic and liberal party, today the largest opposition party. The leader of the largest party automatically becomes president and appoints the government, so for the MPLA it is simply a question of having an absolute majority among the 220 members of the National Assembly. Today it has 124 members to UNITA’s 90. The FNLA has also become a party, but it is quite small.

Are hostilities really over? UNITA does not believe they are, insofar as the MPLA does everything it can to keep UNITA out of influence and visibility and continues to view the party as subversive, even though the assassination of the intransigent UNITA leader Jonas Savimbi by government forces paved the way for the peace agreement. But reconciliation has not taken place. UNITA, which was often portrayed as the ‘bad guys’ during the civil war, has now taken on the role of criticizing public abuses and blaming the government for the people’s unnecessary suffering.

In 2025, riots broke out, started by taxi drivers demonstrating against rising diesel prices. Other disgruntled groups joined in, and it developed into a minor social uprising against the government. The police cracked down brutally, leaving at least 22 dead (critics say 90), 277 injured and up to 1,500 arrested. It can also be seen as an indication that the MPLA is losing support.

The 2010 constitution requires local authorities to be elected, but this has not yet been implemented. Perhaps this is one reason why traditional leaders have great influence in rural areas. It is also a very fundamental problem that many people do not exist legally. There is no systematic registration of births. Since a large part of the population does not have identity cards, they cannot vote in the elections. The provinces are state administrative units headed by a governor.

 

‘The system’

The political system is now, as under dos Santos, one large fusion of political and economic interests, channeled through Sonangol, through the MPLA’s financial holding company GEFI, or directly through the president and his inner circle. GEFI owns 64 companies and helps finance the MPLA. Novo Jornal, one of two newspapers not controlled by the government, published in February this year that contracts worth 20 million on average per day has been awarded without public tender since President Lourenço took office in 2017, totaling $61.5 billion. Even the cautious IMF admits in its corruption report from 2025 that over 80% of all contracts have been awarded without competition and, more precisely, that in 2023 and the first half of 2024, open tenders accounted for only 0.4% and 3.3% of all contracts, respectively.

Six companies handle the government’s interests, Gemcorp, Mitrelli, Omatapalo, Simportex, Odebrecht, Sinohydro. They also have some interesting mutual financial hedges, where they can jointly get up to 25% in various fees, commissions and markups out of loans to the state.

The financing of the Lobito refinery illustrates how the financing mechanism typically works. China Development Bank provided loans of 4.8 billion dollars through Sonangol, which the Ministry of Finance then hedges through international borrowing. One transaction is stacked on top of another, which can create ambiguities that can be exploited for other purposes.

When you see the huge investments that the government/Sonangol/GEFI all have a part in, there is no excuse for the already not very impressive budgets for education (6.9% of the state budget in 2026) to be regularly cut throughout the year.

There is no sign that the government will not continue to anchor itself to Sonangol that is set to develop other business areas than oil, including minerals. Even though Sonangol is on the list of companies to be privatized, the process is dragging on.

President Lourenço cannot be re-elected in 2027, and sources believe that he will not seek re-election, rather that he will appoint his successor. That the MPLA will continue to be the largest party seems certain, though.

International aid and publicity

Foto: Karen Helveg Petersen

But what about the IMF and the World Bank, aren’t they responsible for implementing good governance and ‘clean’ capitalist development? The IMF gives its advice on macroeconomic balance and the foreign exchange market, which is controlled – it is difficult for Angolans to obtain foreign currency – but the follow-up is lacking. The kwanza has constantly fallen in value. In 2014, one dollar was equal to 100 kwanza, today it is over 900 kwanza. And wages have not kept up, the minimum wage was recently raised to 100,000 kwanza per month, slightly more than $100, but the cost of living in the cities is high, as most things are imported, including food. Small business owners are allowed to pay a monthly salary of no more than 50,000 Kwanza. University teachers are paid a pittance.

As mentioned, the IMF has produced a cautious and vague corruption report, in which you can read that progress was made until 2022 and then the fight against abuse stalled or even regressed. One of the problems is the courts, which are far from independent.

In total, the World Bank has ongoing projects worth a staggering $5 billion so the country does receive foreign aid, although the largest share of World Bank support is in the form of loans. I did not hear anyone directly mention the Bank’s efforts as a positive factor in combating poverty, poor education and youth unemployment, although all of these areas are receiving support. Those I discussed it with thought that the Bank, like the IMF, was too lenient with the power structure in the country. One of the programs is called Kwenda. The first phase from 2020-2024 was financed with $320 million from the Bank and $100 million from the government. It involved distributing money directly to 1.6 million poor people and helping with identity papers and schooling but was criticized for being channeled through the MPLA. For better or worse, it will be followed by a second phase of $400 million.

Due to the civil war and later its considerable oil revenues, Angola has not been flooded with bilateral donors. Official Denmark does not have much of an engagement besides export credit, but Angola is also only one of the eight countries in southern Africa that the Danish embassy in Pretoria covers besides South Africa.

This picture is a contrast to other African countries, where the government apparatus has to show a certain openness in order to obtain aid funds. It does not go smoothly either, but the contrast with Angola is striking. I did not have any institutions behind me, but I did have good contacts who helped me. It was a struggle for them to get authorizations for even simple information-seeking meetings. We were turned away several times even though everything indicated that we had the right credentials.

To promote itself as a tourist country, Angola advertises on CNN with pictures of the beautiful waterfall, Kalandula, interesting geological formations and national parks. In return, CNN sends crews to Angola to present the dynamic country to an international public. Among other things, it has interviewed an entrepreneur who not only founded the first purely private Angolan oil company, Alfort, but also obtained an onshore oil concession in a national park. CNN uncritically projected his image as a self-made man (https://edition.cnn.com/2025/11/04/world/video/marketplace-africa-alfort-petroleum-gianni-martins-spc). However, even before the broadcast, information was available that Alfort had received a loan of $35 million dollars in start-up capital from Sonangol, where the entrepreneur’s father is also the CEO (https://www.africa-press.net/angola/all-news/sonangol-finances-ceos-sons-company-with-35-million). Is it too naive to expect better from CNN?

Where is Angola heading? The opposing trends

Angola’s development away from socialism as nothing more than rhetorical embellishment began already at independence, when the MPLA nationalized Portuguese property, but at the same time invited foreign investors into the oil sector. Not only that, it also suppressed working-class organizations such as trade unions and other manifestations of autonomy. After many years of brutal civil war, the picture is basically the same. Although the government tries to direct the country’s trajectory and investments towards its own development goals, it is financially dependent on international investors – not to mention imperialist interests.

In foreign policy, the country balances elegantly between the different poles. Lourenço was president of the African Union until February this year. Joe Biden visited the country at the end of his presidency to sign the US Lobito financing, China is present at an official, business and citizen level, and Russia is involved in military equipment and training. Until the Ukraine war, it was directly invested in diamond mines, but due to sanctions, its diamond interests are now handled through the Bank of Oman.

The Lobito corridor will be a showcase, because all interests are at stake here, including African ones. Arab countries will also be involved. Many of the minerals to be transported come from Chinese-dominated mines.

At the same time, the problems can be summarized: First, the government and the ruling party’s authoritarian policies are hindering the development of the domestic private sector. Second, there are still outstanding reconciliation issues. Third, there is the fundamental problem that the measures to improve the living conditions of the population are completely inadequate, if not failing, and this applies to both increasing inequality, extreme poverty and falling living standards for the traditional urban middle class. Fourth, the formally democratic institutions lack the legitimacy they should have.

Some of these trends are international. An African autocrat can so easily be inspired by Trump, Putin, Modi or Xi Jiping.

Will the population ever get another day? UNITA swears that it only wants peaceful change. The next elections are in August 2027.

 

WPMessenger