Building vibrant and tolerant democracies
As a poor developing country recovering from civil war, Angola relies heavily on revenues from oil which accounts for two-thirds of the government’s income. But civil society groups, the International Monetary Fund and other observers have long raised concerns about lack of transparency in the government’s management of these revenues. A well-documented history of severe official corruption in Angola has meant that revenues which could have been used to promote the country’s development have been siphoned off or wasted. Global Witness has published a series of reports since 1999 raising concerns about corruption in the oil sector. The Open Society Initiative for Southern Africa (OSISA) Angola has long worked for more open and accountable government.
Since 2004, the Angolan government has responded to concerns about its lack of transparency by publishing large amounts of official data about oil production and exports in Angola, and the revenues that flow to the state from oil. The government has taken further steps since signing a three-year, US$1.4 billion loan agreement with the IMF at the end of 2009, notably the publication for the first time of the audited accounts of Sonangol, the powerful state oil company which dominates the public finances of Angola.
This report assesses the extensive official data published by the Angolan government in order to answer the question: do these data provide concerned Angolan citizens with a comprehensive and reliable picture of how much revenue the government earns from oil? Without such a picture, it is impossible for citizens to monitor the flow of revenues and press the Angolan government to use these funds in their long-term interest.
The simple answer is that the official data on oil production, exports, domestic sales, prices and above all, revenues, are not reliable. None of the figures appear to be independently verified (with the partial exception of Sonangol’s accounts, which are audited by an international accounting firm). Thus even in cases where different agencies’ figures are consistent with each other, there is no external assurance that the figures are accurate. In fact the figures from different agencies show numerous gaps, discrepancies and anomalies which are hard to explain, based on the available information. This report does not allege that the figures show evidence of corruption and fraud and it is possible that, with independent verification, at least some of them could be confirmed as accurate. But at present, there are too many problems for the official data to be accepted as reliable or comprehensive.
The report examined the most detailed reports produced by Angolan government agencies, which include annual oil sector reports from the Ministry of Petroleum, detailed month-by-month oil export and revenue figures from the Ministry of Finance, an annual statistical bulletin published by the same ministry and the audited financial statements of Sonangol. All the data used were from 2008, the most recent year for which all these sources were available at the time this report was completed in late 2010. The report also examines a key revenue stream, signature or other bonuses paid by oil companies, for 2006 (because several billion dollars were reportedly paid in bonuses in that year, though the sums since then have been much smaller). The report also cites some external sources, mostly agencies that analyse the international energy market, to compare them to the government’s figures.
Global Witness has written to the Angolan Ministries of Finance and Petroleum to ask them how their published figures are constructed, and has written to Sonangol on various occasions seeking comment about oil industry issues in Angola, but has not received a response. OSISA Angola and Global Witness would welcome a public discussion with the Angolan government on the findings of this report.
The main findings of this report are that:
This report recommends that the Angolan government: