Can EITI make a difference in Angola?

More than a year has passed since the creation of an inter-ministerial working group to evaluate the possibility of Angola joining EITI (‘working group’), and there is still no information on what the outcome of this evaluation is, or whether a decision has been reached.

Progress on this front is no doubt being closely monitored by transparency advocates and Big Oil. Angola has long been regarded as a strong candidate for EITI. Not only is it Africa’s second biggest oil producer with the world’s highest child mortality rates, but also the sixth most corrupt country according to Transparency International. As such, its membership would be considered an important win for campaigners who have repeatedly called on the government to join EITI.

This move would equally come as a great relief to many multinational oil companies, whose reluctance to actively promote oil revenue transparency in the country is often blamed on the government’s lack of implementation of EITI. Total, among others, has made its disclosure of revenue payments conditional on host countries’ membership of EITI, and has therefore deliberately withdrawn any fiscal information concerning its Angolan operations in the country’s 2014 financial transparency factsheet.

While such companies prefer to hide behind EITI, analysts are rightly questioning whether it is actually making, or likely to make, a difference in the real world. This is an issue that will undoubtedly be addressed this week in Peru, where EITI is hosting its 7th global conference and elect a new chair.

As far as Angola is concerned, there remain several unanswered questions. One has to do with civil society participation, which as the latest protocol indicates is fundamental to achieving the objectives of EITI and ensuring that it leads to greater accountability. The first question here is: what would constitute an Angolan civil society organisation, in other words, who will be allowed to participate in the EITI process? This is an issue that has fuelled antagonism between local actors in the past, leading many local voices who were among the most engaged on the issue of oil sector transparency to be subsequently excluded from this debate.

This is compounded both by links between civil society actors and the ruling party, and by the prominence of parallel employment in the country. Indeed, a relatively recent study shows that nearly half of those working in the NGO sector have a parallel job in the public sector (76.5%) and private sector (19.9%), partly to offset the low wages offered by NGOs. As the authors of this study remark, this creates capacity issues as well as huge difficulties for those organisations doing advocacy work.

A second and related question is whether one can reasonably expect that any of these CSOs would be willing and able to engage in predictable ways, knowing that they suffer from lack of funding, legitimacy shortfalls, and that they operate in an increasingly tough environment. In the year since the announcement of the working group, in fact, the government has issued a new NGO decree restricting NGOs’ ability to operate freely, and jailed young activists for allegedly planning a coup d’état. This campaign of harassment follows the controversial sale and apparent co-option of a string of media outlets by the regime.

Yet an ‘enabling environment’ is not all that the government has to guarantee. It also has to dedicate human and financial resources currently in short supply.

All this raises a third question which is, just how committed to the EITI process is the government likely to be? It is fair to say that so far, Angola’s transparency reform agenda has had mixed outcomes, owing in part to the fact that changes are often introduced that offset the effects of other more positive reforms. This is the case in the oil industry, where after cleaning up the offshore side following a probe by the U.S. Securities and Exchange Commission over Cobalt’s Angolan operations, the regime decided to reward its own with oil blocks during the recent onshore licensing round. If anything, these contradictions give a hint of the difficulties ahead.

Some would argue that the foregoing challenges are not insurmountable and that the EITI would actually be operating in a familiar terrain, given that transparency is enshrined in several national laws and the Ministry of Finance website already contains useful information on the oil and diamond sectors. But this too would suggest that EITI would have to do things differently in order to make a difference. For no insight into the amount of revenues, or discrepancies in the estimates of revenues, from the extractive sector would now come as a surprise in Angola. Besides as Clare Short – EITI’s outgoing chair – stated, success would not be measured by the number and length of reports or implementation costs, but by whether the EITI process has strengthened government and corporate accountability.

The key and final question therefore is: what could EITI do for inhabitants of the little-known town of Soyo which has become Angola’s largest oil-producing region in recent years; or for the people whose human rights are abused in the diamond-rich Lunda-Norte province?

One’s answer would be to build on (and whenever possible link with) existing home-grown initiatives and make EITI more inclusive so as to reflect and/or address the concerns, needs and experiences of all stakeholders, including those at the subnational level previously kept on the fringes of the debate. However, and leaving aside the criticism that EITI is still too centralised and removed from local realities, one simple fact is that the potential of subnational governance can only be harnessed in those countries that really want to promote decentralisation, which is yet another thorny issue for Angola.

And so whilst it pays to be cautious and not read too much into the government’s recent move, it will be all the more exciting to see how EITI plays out in Angola, arguably its toughest prospective candidate to date.

This blog was written by Liliane Chantal Mouan who is an independent researcher based in Coventry, United Kingdom. She recently completed a PhD that examined how domestic and external actors sought to institutionalise oil revenue transparency in Angola (2002-13). Read her previous blog “40 years on from independence, Angola remains full of potential despite challenges“.

40 years on from independence, Angola remains full of potential despite challenges

Angola, Africa’s second largest oil producer and third biggest economy, recently celebrated 40 years of independence on 11 November 2015. But there was very little to cheer about on the day, which was marked with lots of pessimism in the world media, as many commentators sought to commemorate this achievement by emphasising the country’s poor record on human rights and the negative impacts of low oil prices. Yet, all may not be doom and gloom.

As HE Bornito de Sousa, Angola’s Minister for Territorial Administration, stated back in 2013, ‘one’s understanding of Angola depends on whether he/she is seeing it as a picture or as a movie.’ At a recent meeting held at London-based think tank Chatham House to reflect on the country’s past, present and future trajectories, many speakers saw Angola as a movie – about a nation whose story began with 500 years of colonialism and 40 years of a bloody and devastating conflict; a nation that has achieved a remarkable transformation in 13 years of peace but is now facing several challenges.

One of these challenges is the country’s dependence on the oil sector, and its negative impacts on the rest of the economy. This lack of economic diversification, along with the oil price crash, has left the government cash-strapped and unable to follow through on commitments relating to public expenditures.

Expectations of a pre-salt boom failed to materialise; and recent attempts to raise taxes in the sector were resisted, with international oil companies arguing that such a move would contribute to reduce the country’s competitiveness while also potentially stifling investments.

There was also evidence of rural-urban divides, and in particular, of the danger that landmines still pose in rural areas, where many citizens continue to be prevented from benefiting from the peace dividend.

More recently, Angola has been associated with striking levels of protests and social mobilisation prompted by an increasingly vocal young generation, who does not share the same fears or expectations as their parents. Regrettably, these protests have been met with excessive violence and arrests, the latest reminder being the high profile case of the 17 activists currently on trial for allegedly planning a ‘rebellion’.

This is somewhat ironic given that Agostinho Neto, Angola’s first President, was also one of Amnesty International’s first political prisoners.

These difficulties, coupled with the uncertainty surrounding the presidential succession and the multiplicity of pressures from anti-corruption investigators in Europe, the U.S., China and Brazil, have combined to create a volatile political and socio-economic environment that further impedes sustainable growth.

As always, context matters. And so when assessing Angola’s development path, one must not only reflect on its failures, but also take time to consider the country’s complex history as well as the progress achieved so far, notably in the transparent and efficient governance of public finances.

Another reason to be optimistic is that periods of crisis always bring about structural reforms in Angola. This was the case in the 1980s and 1990s, and it remains the case today. According to Dr Alex Vines, a Director and Head of the Africa Programme at Chatham House, the Angolan regime is more open to reform now than it has been for a long time.

It also has at its disposal the resources necessary to deal with the current crisis in an effective and swift manner. Earlier last month, it raised US$1.5 billion through its first Eurobond, illustrating that it can secure alternative sources of funding. This was followed by the announcement that Total will invest a further $10 billion in the country in the next decade.

While it is still unclear how much of that investment would go to social projects, and how transparent they would be given oil companies’ ambiguous record in this area, these are nevertheless signs that Angola remains attractive to international investors.

At home, there are several options for economic diversification, say, in the agriculture, energy, and manufacturing sectors in which there is a lot of potential for growth.

There is great potential in the Angolan people too. In my conversations on the potential implications of the youth movement with some Angolan and foreign politicians and civil society representatives at its early stage of formation, I recall that there was a gulf between those from the older generation who were suspicious of its motives and indeed believed that it would rapidly fade; and those from the younger generation who were more optimistic and felt that it would bring about irreversible cultural change.

If anything, that this movement remains defiant despite the authorities’ repressive tactics shows how removed from reality the perception of Angola as a ‘country without citizens’ is. Better still, this and other often invisible yet transformative grassroots initiatives demonstrate the capacity of ordinary Angolan citizens to bring about change where others cannot.

There is no doubt however that Angola is facing an important crossroad, and that whatever path it chooses will be decided by the Angolan people and leadership. External actors also have an important role to play. But while engaging with both the government and civil society, they should be mindful that change is a learning and long-term process, hence, that what is required in this highly complex environment are novel, comprehensive and long-term strategies that take into account the specificities of the Angolan society, its logics and politics.

This blog was authored by Liliane Mouan who is an independent researcher based in Coventry, United Kingdom. She recently completed a PhD that examined how domestic and external actors sought to institutionalise oil revenue transparency in Angola (2002-13).