The MPLA, which emerged victorious from a 27-year civil war
against UNITA in 2002, has been accused of corruption and of not
doing enough to tackle widespread poverty.

Other concerns include uncertainty about a successor to
President Jose Eduardo dos Santos and heavy dependence on oil
revenue, feeding demands for more transparency as Angola tries
to regain investor confidence after the global financial crisis.

GOVERNMENT SHAKEUP

Media reports about an imminent government reshuffle and the
possible sacking of powerful Economy Minister Manuel Nunes
Junior have raised uncertainty about the economic outlook.

Nunes Junior oversees monetary policy, a $1.3 billion loan
programme with the International Monetary Fund and is also in
charge of setting up the country’s first sovereign wealth fund.

Transport Minister Augusto Tomas, who has won praise from
the ruling MPLA party for restructuring national airline TAAG,
is seen as a possible successor to Nunes Junior.

But analysts say Nunes Junior’s removal would harm investor
confidence as the economy slowly recovers from the global
economic downturn. The government estimates GDP will grow 6.7
percent this year, up from 2.4 percent in 2009.

Central bank head Abraao Gourgel and Finance Minister Carlos
Lopes could also be sacked, according to reports.

Watch out for:

– A speech by the president to parliament on Oct. 15 where
he could announce the shake-up.

– More names being floated as successors in local media.

POLITICAL BICKERING

The campaign for Angola’s 2012 elections is off to a shaky
start with the opposition UNITA party saying the deadly riots in
Mozambique over price increases last month could lead poverty
stricken Angolans to do the same.

UNITA leader Isaias Samakuva made these comments after the
government raised fuel prices by up to 50 percent last month.

The polls in Angola will only be the second since the end of
the civil war that pitted the Russian and Cuban-backed Popular
Movement for the Liberation of Angola (MPLA) against UNITA,
backed by the United States and apartheid South Africa.

The MPLA, which won the war in 2002 and 82 percent of the
vote in elections two years ago, is likely to win the elections
in 2012, but it looks increasingly worried about UNITA’s
accusations of not doing enough to fight poverty and corruption.

The army and police have so far deterred unhappy Angolans –
an estimated two-thirds live on less than $2 a day — from
publicly protesting against the government.

Watch out for:

– Protests from taxi drivers forbidden from raising fares.

– Signs of civil unrest in shanty towns around Luanda.

TRANSPARENCY

Dos Santos has been uncharacteristically vocal about
corruption after his government turned to the International
Monetary Fund for a loan last year.

His comments on zero-tolerance for corruption prompted
parliament to pass a law this year to punish officials caught
stealing from the state.

But it is hard to change the rules of the game when the
players remain the same.

The decision-making process tends to be opaque, with access
to the key players in the government limited. The private media
is also seen to be controlled by members of the government.
[ID:nLDE67A112]

Reliable statistics and market-relevant information are
scarce, with the MPLA holding a huge sway over the media.

Such lack of transparency can lead to unwelcome surprises,
such as when the Angolan government announced commercial arrears
of an estimated $6.8 billion far exceeded prior expectations.

Watch out for:

— The government delivering on its pledges to crack down on
corruption.

– The government announcing a new batch of surprising debt
numbers.

SUCCESSOR

The MPLA’s landslide victory in the first post-war election
in 2008 left political rivals in tatters, enabling dos Santos to
change the constitution and increase his powers.

The new charter will enable the 68-year-old ruler, widely
expected win the 2012 election, to remain in power until 2022
although there is speculation he will retire before then.

The big question is whom dos Santos will pick as
vice-president for the race. That person will be seen as the
successor to one of Africa’s longest-serving leaders.

Despite criticism for holding power for more than three
decades and having a huge influence over politics and the
economy, dos Santos is widely seen as key to peace and
stability.

Vice-President Fernando Piedade Dias dos Santos is a natural
successor to dos Santos but he has health problems and could be
outflanked by ministers of state Manuel Vieira Dias or Carlos
Feijo.

Watch out for:

– Changes in the government ahead of the 2012 elections.

– Any comments from dos Santos about his plans to retire.

OIL DEPENDENCY

Oil has helped Angola pick up the pieces of a devastating
civil war to become sub-Saharan Africa’s third biggest economy
after South Africa and Nigeria. But as in many oil producing
nations, Angola’s oil dependence can also be a curse.

Despite moves to diversify and invest in sectors such as
agriculture, oil still accounts for 90 percent of Angola’s
export income but employs less than 1 percent of the population.

The oil price slump in 2008 left Angola struggling to pay
civil servants and forced it to delay paying billions of dollars
to construction firms rebuilding the nation after the war.

In Angola’s oil-rich province of Cabinda, rebels from
separatist group FLEC fatally attacked the Togo soccer team in
January as they made their way to the African Nations Cup.

The roots of the conflict are long and complex but one
grievance is that many Cabindans have is that they see little of
the oil that comes from their land. FLEC leaders in exile called
off their armed struggle in July.

The IMF, the World Bank and ratings agencies, which have
given Angola the same B+ rating as Nigeria, have all urged the
African nation to do more to diversify its economy.

Should Angola fail to broaden its economy, it risks becoming
another Nigeria where quarrels about the distribution of oil
wealth have fuelled civil unrest.

Angola rivals Nigeria as Africa’s biggest oil producer.

Watch out for:

– New policies to diversify the economy into sectors such as
agriculture.

— The outcome of peace talks between government and FLEC.

— Ability of the government to pay back $6.8 billion in
late bills to construction firms.

POVERTY

More than eight years since the end of the civil war,
millions of Angolans still live in shanty towns while
unemployment is running at around 50 percent. Last year’s
recession has only increased their anger and frustration.

Their resentment is stoked by reports of government
corruption and plans to relocate millions of people living in
huts around Luanda to unfinished housing projects further away
from the capital.

Dos Santos has pledged to build 1 million homes for the poor
in four years at a cost of $50 billion but such plans have
repeatedly been delayed.

The war between the MPLA and UNITA devastated Angola’s
farming sector, forcing millions to flee to the cities.

Watch out for:

– A repeat of street protests last year over forced
evictions

– Government uses security personnel to force residents out
of shanty towns, which could spark protests.
(Editing by Jon Herskovitz and Giles Elgood)

In a rare statement that shed light on the personal life of
one of Africa’s most enigmatic leaders, Dos Santos, 68, said
Ngutuila Josefa Matias, 46, had tried to meet him and had stated
publicly that she was his daughter.

The president said he had moved to the Democratic Republic
of Congo in 1961 during Angola’s fight for independence from
Portugal but denied having any affairs there.

During the three years that he lived there, “I never had any
girlfriend or lover. At the time all I thought about was
completing my studies,” dos Santos said.

The Congolese woman, who recently arrived in Luanda, said in
an interview with an Angolan weekly, Folha 8, on Sunday that she
and other members of dos Santos’s family used to refer to the
president as Edu.

Dos Santos, whose three decades in power have prompted many
Angolans to refer to him as “the boss,” also denied this claim.

“I am Jose at home, my family members call me Ze, the
younger ones refer to me as Manu Ze, my nephews call me uncle Ze
and during my childhood … everyone called me Jose Eduardo,” he
said.

After living in Congo in the early 1960s, dos Santos went on
to study engineering in the Soviet Union, where he met his first
wife, and returned to Angola before the oil-producing nation
gained independence in 1975.

Four years later, he was unexpectedly declared president of
Angola by the ruling MPLA party after the death of the nation’s
first president, Agostinho Neto. Dos Santos has been in power
since then.

“She must be patient,” dos Santos said of the woman.

“Many Angolan refugees travelled to the Congos and some even
lived there during the liberation struggle. Maybe someone by the
name of Eduardo or Edu is her real biological father,” he said.

Dos Santos, who has been married three times, has three
daughters and five sons.
(Reporting by Henrique Almeida; Editing by Giles Elgood)

The polls will only be the second since the end of Angola’s
civil war that pitted the Russian and Cuban-backed Popular
Movement for the Liberation of Angola (MPLA) against UNITA,
backed by the U.S. and apartheid South Africa.

The MPLA, which won the war in 2002 and 82 percent of the
vote in elections two years ago, is likely to win the elections
in 2012, but it looks increasingly worried about UNITA’s
accusations of not doing enough to fight poverty and corruption.

“UNITA has said things that can incite civil unrest through
Radio Despertar,” MPLA spokesman Rui Falcao told Reuters on
Friday, referring to a recent interview by the leader of UNITA
in which he said riots in Mozambique could take place in Angola.

UNITA leader Isaias Samakuva’s made these comments after the
government raised fuel prices by up to 50 percent last week. The
deadly riots in Mozambique, which also took place last week,
were triggered by a 30 percent rise in bread prices.

“But Angola is not like Mozambique,” said Falcao. “We
continue to work to improve the lives of ordinary Angolans.”

Yet despite Angola’s vast oil reserves and billions of
dollars spent rebuilding roads, bridges and other infrastructure
after the war, analysts say the government still has a long way
to go to improve living standards in the West African nation.

An estimated two-thirds of Angola’s population live on less
than $2 a day, according to the World Bank, and the nation
ranked in the bottom 19 of a Transparency International study
last year.

CIVL UNREST

UNITA is using these figures, along with the protests in
Mozambique to round up supporters ahead of the elections,
despite the risk of civil unrest in the war-torn nation.

“If something like this happens in Mozambique where poverty
isn’t as bad, why couldn’t it happen here,” UNITA leader Isaias
Samakuva said in a recent interview with Radio Despertar, or
Radio Awakening.

Samakuva’s interview prompted MPLA spokesman Rui Falcao to
hold a news conference earlier this week to denounce UNITA’s
behaviour as irresponsible.

The government signalled a few days later it could close
radio Despertar, which is seen as being sympathetic towards
UNITA, for abuse of press freedom after it ran Samakuva’s
interview.

Samakuva has defended UNITA, saying his party has no
intention of returning to war. “But we can no longer turn a
blind eye on poverty and government corruption,” he said.

Asked by Reuters whether the war of words between the MPLA
and UNITA marked the start of a political campaign for the 2012
elections, Samakuva replied: “If this is the start then it’s a
very bad start.”

“We are asking ourselves whether we will even have the
conditions to hold these elections.”
(Reporting by Henrique Almeida; Editing by Marius Bosch and
Giles Elgood)

Rui Falcao was referring to a speech by the leader of UNITA,
Isaias Samakuva, in which he criticised a government decision to
raise fuel prices by up to 50 percent, adding that poverty in
Angola was already worse than in Mozambique.

“It is clear that there is a dirty campaign aimed at
tarnishing the MPLA’s image ahead of the 2012 elections,” Falcao
said in an interview with Reuters on Wednesday. “UNITA is part
of this dirty campaign.”

A 30 percent rise in bread prices in Mozambique last week
triggered widespread protests in the impoverished African nation
in which 13 were killed and more than 100 injured.

In his Sept. 3 speech to UNITA supporters, Samakuva also
said there was widespread government corruption and Angola
needed to to be ruled differently “because what happened in
Mozambique could also take place in Angola.”

UNITA spokesman Alcides Sakala says the opposition party is
only trying to make the MPLA, in power since Angola’s 1975
independence from Portugal, more accountable.

Angola rivals Nigeria as Africa’s biggest oil producer but
an estimated two-thirds of its 18.5 million people live on less
than $2 a day, according to the World Bank.

“If there is corruption and widespread poverty in Angola
then it is our duty to say this out loud,” said Sakala. “That’s
what opposition parties are meant to do.”

REPORTER MURDERED

This is the second time in less than a week that the MPLA
has publicly said there was a smear campaign aimed at hurting
the party ahead of general elections in 2012.

But Falcao brushed aside the chance of civil unrest. The
majority of Angolans stand behind the ruling party in its
efforts to rebuild the nation after it won a 27-year civil war
against UNITA in 2002, he said.

“People sometimes forget that the MPLA has 4.8 million
registered members that come from all walks of life,” said
Falcao. “We are not like Mozambique. We won’t be caught off
guard.”

He also accused UNITA of using its own radio station, Radio
Despertar, or Radio Awakening, to incite civil unrest.
Despertar’s broadcasts turned sour after one its reporters was
shot dead in his home on Sept 5. No arrests have been made.

“Since Monday, Radio Despertar has made repeated appeals for
civil disobedience,” said Falcao. “We call on all Angolans not
to react to such provocations or invitations to go against law
and order.”
Asked whether the MPLA was aware of the Radio Despertar
reporter’s death, Falcao replied: “Yes.”

“We heard about it. People in Angola get involved in all
kinds of problems. We have no idea what happened.”

(Reporting by Henrique Almeida, editing Ed Stoddard and
Giles Elgood)

Tired of being criticised for being one of the world’s most
secretive governments, Angola is finally throwing back some
punches.
Top government officials, including the economy minister,
the finance minister and the head of the central bank, held a
news conference late on Friday to discuss the government’s first
200 days in power — the second news conference of the kind this
year.
“You thought we wouldn’t do this again,” said Carlos Feijo,
Angola’s powerful minister of state who is seen by many as the
president’s right-hand man. “Well, here we are.”
He then went on to speak non-stop for 40 minutes, describing
how the economy had improved in recent months, plans to pay
billions in debt to construction firms and the fight against
poverty and corruption before opening up the floor to questions.
Many journalists praised the government’s decision to hold
the news conference as a step in the right direction in a nation
where officials seem to be paid to keep quiet and where people
are afraid to openly criticise the president.
Greater transparency could also bolster Angola’s chances of
receiving more Western loans and placing debt with private
investors abroad, as it seeks cash shore up its finances after
the recent slump in oil prices.
Angola was ranked in the bottom 19 of 180 countries in a
Transparency International corruption study last year.
State-run daily Jornal de Angola hailed the news conference
a success in an editorial a few days later.
“The Angolan government has explained how public funds are
being managed so that Angolans continue to trust in those they
elected into government for four years,” said Jornal de Angola.
“It is important that all Angolans, whether or not they
voted for the ruling party, to be aware of the importance of
this extraordinary performance.”
The question is whether the Angolan government is serious
about increasing transparency or simply using the media’s thirst
for information to campaign ahead of the nation’s 2012
elections.

The party’s powerful Political Bureau said in a statement on
Monday the campaign was spearheaded by Angolan nationals hired
by local and foreign organisations to “tarnish everything the
executive power does” ahead of the vote.

“Their goal is to defeat the MPLA and hand over power to
those that have always served their interests,” the MPLA said in
a statement without specifying any names.

The statement comes after an Angolan journalist and rights
activist accused President Jose Eduardo dos Santos and his inner
circle of taking control of the economy by grabbing stakes in
firms ranging from the oil to the banking sectors.

In his report, “The Angolan Presidency — The Epicentre of
Corruption,” Rafael Marques points the finger at deals led by
Minister of State Manuel Vieira Dias Junior and Manuel Vicente,
chief executive of state-run oil firm Sonangol.

Both officials have repeatedly denied the report’s
allegations, which were published on Marques’ anti-corruption
website www.makaangola.com.

“It is complete rubbish,” Vieira Dias Junior recently told
Reuters.

INVESTOR CONFIDENCE

But Marques’ report was widely cited in the foreign media
after he gave an hour-long interview with Portuguese broadcaster
SIC Noticias in June. Former colonial ruler Portugal is one of
Angola’s biggest trading partners.

Analysts say such accusations could shake confidence in an
oil producing nation that is just beginning to recover from a
slump in crude prices last year.

It could also undermine dos Santos’ recent calls for zero
tolerance of corruption, calls which critics say ring hollow as
the government has for decades been accused of siphoning off and
squandering the country’s vast oil wealth.

The MPLA said it would continue to work to improve the lives
of ordinary Angolans, most of whom live in dire poverty,
regardless of the smear campaign.

“Nothing, absolutely nothing will force the MPLA to turn its
back on its ideals,” it said in the statement.

“The conviction that it needs to act as soon as possible to
consolidate a democratic society, free of misery and in which
the well-being is a fact and development an achieved reality.”

Angola was ranked in the bottom 19 of 180 countries in a
Transparency International corruption study last year.

The MPLA, in power since Angola’s 1975 independence from
Portugal, won 82 percent of the vote in the nation’s 2008
elections — the first since the end of Angola’s three-decade
long civil war in 2002.

(Reporting by Henrique Almeida; Editing by Ed Stodddard and
Giles Elgood)