| LUANDA, Sept 30
LUANDA, Sept 30 Reports of an imminent
government reshuffle and rising tension between the ruling MPLA
party and the main opposition UNITA party are worrying investors
in the major African oil producing nation of Angola.
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.
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.
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.
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.
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
- The government announcing a new batch of surprising debt
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
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
Watch out for:
- Changes in the government ahead of the 2012 elections.
- Any comments from dos Santos about his plans to retire.
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
-- 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.
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
- Government uses security personnel to force residents out
of shanty towns, which could spark protests.
(Editing by Jon Herskovitz and Giles Elgood)