Sonangol Reshuffle Puts Anti-Graft Campaign Into The Spotlight

13 May 2019
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The head of state energy giant Sonangol is replaced just as the company plans extensive asset divestments. There is ample precedent indicating that Angola's new ruling elite is seeking to capitalise on positions of patronage, while the country's embattled president is facing off ruling party rifts and the prospect off-mounting unrest over IMF-mandated austerity measures. EXXAfrica looks at what the changes at Sonangol mean for Angola's political and economic prospects.

On 8 May, Angola's President João Lourenço dismissed Carlos Saturnino as chair of state energy firm Sonangol. Saturnino was appointed in November 2017, when Lourenço fired Isabel dos Santos,  who is the daughter of his predecessor former president José Eduardo dos Santos and had previously led the state oil company. Lourenço has replaced Saturnino with potential chief at the all-important state oil company.

President Lourenço has not publicly specified the reason for Saturnino's dismissal. Ostensibly, the latter has been made the scapegoat of the fuel crisis in the capital Luanda and other cities around the country. Over the past few weeks, massive lines of queueing motorists are becoming a frequent sight around Luanda. The day before reshuffling Sonangol's chair, Lourenço made a public statement on the crisis, blaming a lack of communication between Sonangol and other state institutions, providing no further detail on the reported origin of the problems. Sonangol has instead claimed that mounting arrears owed to it by industrial clients have affected its balance of payments to cover imports of refined products such as gasoline and diesel. Angola imports 80 percent of its refined petroleum products.

The removal of Saturnino, who was widely regarded as a capable manager of the state oil firm, seems aimed at distracting from the actual broader economic problems facing Angola and that caused the fuel shortages in the first place. Local sources close to Sonangol have reported more opaque reasons for Saturnino's removal, who seems to have fallen out of favour with Lourenço's influential economic policy 'czar' Manuel Vicente, who is another ex-chairman of Sonangol and former deputy president. Much of the controversy surrounding the appointment of Gaspar Martins centres on his role as CEO at Angolan junior oil firm Somoil, which was founded by Vicente almost 20 years ago and retains stakes in offshore oil blocks and interests in onshore production permits. The reshuffle again poses questions about President Lourenço's high-profile crackdown on corruption, which has recently suffered several more setbacks.

Setbacks to transparency campaign

The government's highly popular anti-corruption and economic liberalisation platform is primarily  imed at diluting the political and economic dominance of former president dos Santos and his family. The dismissal of Isabel dos Santos from Sonangol and the firing of dos Santos's son José Filomeno from the country's sovereign wealth fund, following allegations that he attempted to embezzle USD 1.5 billion, fit into this pattern. Recent reports say that another daughter Welwitschia has fled Angola following claimed intimidation. She may be suspended as a ruling party lawmaker as result of her absence. Most dos Santos family members are now in the UK and Spain, while some face detention if they return to Angola. This strategy of targeting dos Santos family members has been enormously popular in Angola, where many people blame the family for years of corruption, mismanagement, and nepotism.

However, the crackdown on corruption has suffered a series of setbacks this year. In March, José Filomeno dos Santos was released without charge, alongside his associate Jean-Claude Bastos de Morais, who heads asset management firm Quantum Global. The releases were reportedly secured after Quantum Global ensured the return of assets worth USD 2.35 billion from UK and Mauritian bank accounts. It is unknown whether these assets were returned to the central bank or sovereign wealth fund, and how these have been accounted for since then. Local sources claim some of the returned funds have been diverted to accounts over which the treasury has no control.

Angola's judiciary has barely functioned since independence in 1975, so the failure to convict high-profile defendants like dos Santos is no surprise.