In Angola, the economic mirage of the head of state João Lourenço

by time news

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Second oil producer in sub-Saharan Africa, third diamond producer on the continent, Angola remains one of the poorest countries on the planet. One in two Angolans lived in 2020 on less than $1.90 a day, according to the latest World Bank statistics. And if President João Lourenço, elected in 2017 and candidate for his succession on Wednesday, has launched several economic reforms, the recovery is long overdue.

Like any country highly dependent on the oil windfall, Angola has been benefiting for several months from the rise in crude oil prices. A welcome respite, after five years of recession – following the fall in prices in 2014-2015 – and a particularly difficult year 2020 due to the pandemic.

If the trend continues, the year 2022 could consolidate the recovery observed in 2021. That year was indeed marked by a return to growth and comfortable budget surpluses, according to a note from the French Development Agency (AFD ) published in June. The debt, which was 135% of GDP at the end of 2020, also fell to 85% at the end of 2021. These indicators are therefore progressing, but the country remains economically fragile. The perception within it remains that of a government that is failing to revive the economy.

Reforms in small steps

The 500,000 jobs promised by João Lourenço in 2017 have not materialized. On the other hand, the president stood out as the man who took on the ill-gotten gains of the Dos Santos clanhis predecessor died July 8. It has also initiated a reform of internal taxation and the business climate, a liberalization of the exchange system and a privatization program, with the support of the IMF.

But these reforms have a taste of incompleteness and have not succeeded in putting an end to the opacity of governance. To cite just one example, the fight against corruption has been the subject of so many announcements and counter-announcements that it is difficult to see clearly “, explains Chloé Buire, researcher at the CNRS and specialist in Angola.

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The country is struggling to get out of a rentier logic

The country’s economic model remains highly dependent on the oil sector, which accounts for 95% of its exports and 40% of GDP. This sector is subject to the vagaries of market prices, but also to those of production. This has fallen by more than a third between 2015 and 2021. “ The commissioning of new capacities by BP and Total Energies, which announced on July 28 the launch of the development of the Bégonia field 150 km off the coast, should make it possible to stem the downward trend in production associated with the lack of investments “However, notes Coface, the organization responsible for insuring French companies that invest abroad.

Despite the announcements, the promised diversification has not yet really taken place. Efforts undertaken to reduce dependence on hydrocarbons do not protect the country if the price of a barrel were to fall again, notes the AFD.

Kaombo Norte, an oil platform off the coast of Angola on November 8, 2018. © Stephen Eisenhammer/REUTERS

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Agriculture has been the subject of vast projects ” run like oil fields “, which remain in a rentier logic, explains Chloé Buire. Priority has been given to large farms and massive investments, while small farms and local agriculture have been neglected.

Apart from the diamond sector, the mining potential is also under-exploited, while it abounds in reserves of copper, iron ore, lead, manganese, or even nickel, according to BNP Paribas. Private investors are asking for more to be reassured, and public investments remain restrained “ by the burden of debt “, emphasizes Coface.

An angry youth

Even if the situation of Angolan public finances is improving, according to the analysis of the General Directorate of the French Treasury, the economic fundamentals have changed very little, specifies Didier Péclard, professor of political science and studies Africans at the University of Geneva. ” The trend towards the centralization of powers in the management of public affairs has continued and even strengthened “, he adds. This made the outgoing president very unpopular, especially with young city dwellers who had believed in a change five years ago and who feel neglected today. João Lourenço will therefore have to face this Wednesday the dissatisfaction of the youth and more broadly of a population hit by unemployment and the high cost of living with inflation which amounted to 21.4% in July.

Even if the MPLA has an undeniable electoral base, this economic context should not plead in favor of the outgoing president. ” We can’t believe he will be re-elected with the popular vote, assures one of our interlocutorsbut neither is it believed that a polling station will declare defeat. »

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