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Unease over state oil post for Africa's richest woman

Antonio Cascais / mc
June 8, 2016

Angolan President dos Santos has appointed his daughter Isabel as head of state-run oil concern Sonangol. A group of lawyers is mulling legal action as dismay in the corporate world spreads beyond Angola's borders.

Angola Isabel dos Santos spricht zu Journalisten
Image: Reuters/E. Cropley

Isabel dos Santos once told a British newspaper that when she was a child she used to sell eggs at the Congolenses market in the Angolan capital Luanda. She said that was when - at the height of the Angolan civil war - she discovered she could "spot a good deal." Today, at the age of 43, she is the richest woman in Africa. Forbes Magazine estimates her fortune at $3.3 billion (2.9 billion euros). The corporate entities in which she has a stake or a controlling interest include the Angolan bank BIC, the diamond concern Sodiam, the Angolan mobile phone company Unitel and various construction companies.

Last week, dos Santos added another string to her bow when she was appointed head of the state-owned oil concern Sonangol. After Nigeria, Angola is Africa's biggest oil producer and almost all of the country's revenue comes from the oil sector. The benefactor who eased her into this top position was none other than her father, Angolan President Jose Eduardo dos Santos. He has been in power since 1979, which makes him Africa's second longest serving president.

Angola Jose Eduardo dos Santos in Camama
Jose Eduardo dos Santo has been in power since 1979. Analysts doubt his avowed intention to step downImage: Reuters/S. Sibeko

Family business

Jose Eduardo dos Santos runs Angola as if it were a family business. He appointed his son Jose Filmeno, also known as Zenu, as head of the Angolan Sovereign Wealth Fund (FSDEA) in 2013. This fund is worth more than $5 billion and is supposed to ensure that the country's oil revenue is invested profitably for the benefit of the people.

"Angola is on its way to becoming an absolutist monarchy," said Angolan human rights lawyer David Mendes. Almost all key positions are occupied by the president's relatives and they include the running of the customs service, water and energy utilities. "Angolans are starting to realize that dos Santos regards the whole country as his private property," Mendes added.

Legal action

Together with a number of other Angolan lawyers, Mendes is contemplating contesting the president's latest appointment in court. Angolan legislation passed in 2010 prohibits the naming of people to public office who could be exposed to a conflict of interests. "The daughter of the president has many private interests which would conflict with those of the state-run oil concern Sonangol," Mendes said. He fears that Isabel dos Santos will direct Sanangol to seal even more deals with the companies she already owns than it has done in the past.

The group of lawyers are expected to announce on Saturday (11.06.2016) whether they will proceed with legal action against the appointment of Isabel dos Santos.

Angola Sitz der Erdölfirma Sonangol
The headquarters of Sonangol in the Luanda. An internal audit said the concern was grossly overvaluedImage: DW/N. Sul d'Angola

"If I were to decide who should be running Sonangol, then Isabel dos Santos would be the last person I would choose," said renowned Angolan economist Carlos Rosado. Especially at this particular time, in the middle of an economic crisis triggered by tumbling oil prices, Sonangol needs a top manager with a clear focus on the company's affairs, unfettered by other commitments. Sonangol's year-on-year turnover has plunged by 34 percent. The concern is in a catastrophic condition, the balance sheets are far too optimistic and exaggerate the value of the state-owned concern by $50 billion, according to an internal audit.

Uncertainty in Portugal

The appointment of Isabel dos Santos has not only caused consternation in Angola. It is also nurturing misgivings in Portugal where the Angolan president's daughter is a big investor in the financial, telecommunications and oil sectors. Sonangol owns 18 percent of BCP, Portugal's biggest commercially-owned bank, and is its biggest single shareholder. Through her interests in other companies, Isabel dos Santos is also the second biggest shareholder of the Portuguese investment bank BPI. This conflict of interest has sent bank shares into sharp decline on the Lisbon stock exchange over the last few days.

José Filomeno dos Santos
Jose Filomeno dos Santos: head of Angola's sovereign wealth fundImage: Grayling

The appointment of Isabel dos Santos is creating a climate of growing distrust in the companies involved, especially in Portugal, Celso Filipe told DW. Filipe is a journalist with the Portuguese language business newspaper Jornal de Negocios and author of a biography of the powerful Angolan business leader. "Isabel is the president's daughter and we can expect layer upon layer of intrigue," he said.

Portuguese corporate lawyer Rui Verde says the potential for conflict and turbulence in the Portuguese economy is substantial. "Every business deal which Isabel dos Santos embarks upon in the name of Sonangol and which simultaneously affects a bank in which she has an interest, could, in theory at least, be declared void in a Portuguese court of law," he said.

The style of government practiced by Angolan President Jose Eduardo dos Santos has become increasingly autocratic. Indeed, it has gotten worse since he announced he would be stepping down. Many political observers, however, doubt that he has any intention of quitting. With state revenues crumbling as oil prices plummet, dos Santos will continue to try and strengthen his power base and this includes giving powerful positions to his relatives. Journalist and human rights activist Rafael Marques wrote in his blog Maka Angola recently: dos Santos has no sense of shame. He has already gone to far. All that remains for him is "to appoint his cat as minister of the environment."

Joao Carlos and Guilherme Correia da Silva contributed to this report

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