Angola: Squandering Its Riches

With its huge oil reserves, lucrative diamond fields and other rich natural resources, Angola is widely regarded as one African country with enormous economic potential. But after decades of civil war and structural decay, Angola is also viewed as a country with enormous and pressing social needs. From Luanda in May 1998, I reported there was concern that Angola's new wealth was not being put to use wisely --- a concern that I am told has still not been put to rest even though the civil war is long over.

Drive through the dusty, bustling streets of Luanda and you will see government officials chauffeured about in expensive new cars entering modern new shops offering luxury goods.

You also will see sharply contrasting signs of poverty and decay -- one-legged beggars harassing visitors outside hotels for a hand-out; sewage bubbling out of cracks in the crumbling sidewalks and pot-holed streets.

The decay is largely the result of Angola's long and bitter history of civil war and colonial abandonment.

The wealth is largely the result of renewed exploitation of the country's incredible treasure trove of natural resources -- ranging from diamonds to oil.

What is troubling to many foreign officials is that the financial rewards stemming from the country's resources are not making their way down from the government elite to average Angolans -- especially those in rural areas.

Diplomats and business sources say it is no secret that senior officials are siphoning off some of the vast profits. In addition, substantial sums of revenue are spent on the military and items that do not appear in the country's official budget. Another large portion of Angola's income goes to pay off its huge foreign debt.

After the corruption, the security expenses and the debt repayments, not much is left over for social rehabilitation projects. And there appears to be growing popular discontent over these disparities.

A 34-year-old mother of two who owns a small grocery store in a Luanda residential area complains that life has become increasingly difficult. She says she struggles to stock basic commodities such as cooking oil to meet the needs of her customers. As for the luxury shops selling perfume, fancy clothes and the like, she says those are just for what she describes as the higher-ups in the government.

International financial organizations lay part of the blame for what some critics see as the current squandering of Angola's wealth to a lack of expertise in such areas as planning and investment management. But they also say the government needs to put in place a more rigorous system of financial controls.

Philip Owusu is the World Bank's representative in Angola. He outlines the argument he makes to government officials.

“There are imbalances in the economy of Angola. We want to work with you to put together a system that is much more rational. We want to help you develop a system that enables you to trace revenues from all sources, we want to work with you on putting together a system that allocates investment resources in a more rational manner, we want to work with you on a system which helps you to monitor these investments.”

The World Bank and the International Monetary Fund are now looking specifically for an audit of the country's oil accounts. Mr. Owusu says the government has acknowledged the need for such a check.

But he says discussions are continuing on when it will take actually place.

In the meantime, Angola's oil revenues are likely to soar despite an easing in international prices. New offshore discoveries are estimated in the billions of barrels. Some oil experts believe within the next decade Angola will outstrip Nigeria as Africa's largest oil exporter.