Angolan Political Stability: A 6 Month Outlook

    Angola’s ruling MPLA party recently won a narrow election victory over its UNITA rivals. UNITA is contesting the results of the elections with allegations of irregularities. The political stability of Angola, achieved after a brutal civil war, is a pressing question to Angolans and foreign investors alike. As UNITA files legal motions against the election results, the government will need to address long-standing systemic issues in order to placate opposition grievances. 

    KJ-1: It is likely that UNITA’s divergence from official election results will generate localized unrest in the next 6 months. 

    • The ruling MPLA party will maintain its hold on power following a narrow victory in the August elections. Support for the MPLA government is down by 10 percentage points since the last election [source].
    • The MPLA suffered an electoral defeat in the nation’s capital Luanda to UNITA [source].
    • The Soviet-backed MPLA and US-backed UNITA fought a gruesome civil war from 1975 to 2002. This resulted in the deaths of over half a million people, with several million displaced [source]. 
    • Adalberto Costa, the leader of UNITA, refused to accept the election outcome. 4 out of the 16 election commission officials declined to endorse the official results [source].
    • Voter turnout registered at a lower rate than expected, further amplifying the politically suspicious atmosphere [source]. 
    • UNITA won in Angola’s oil-rich provinces of Cabinda and Zaire, where energy infrastructure is still under the control of MPLA officials [source].
    • There are persistent fears that disaffected youth could take to the streets and riot, despite Costa’s urge for calm amongst his supporters [source]. Youth unemployment remains high, compounding the risk of political instability [source].
    • MPLA supporters attack UNITA regional offices in Bocoio. 10 people were injured in the attack and several vehicles were set alight. Tensions have remained at an elevated level since then [source].

    KJ-2: It is likely that the MPLA government will further strengthen bilateral relations with Russia and China in the next 6 months.

    • President Joao Lourenco was educated in the Soviet Union and was a general in the MPLA, a Soviet-backed militant group [source]. 
    • Angola may join the Russian Mir payment system. Angola’s ambassador to Russia indicated that the country would remain open to Russian investors despite western sanctions [source]. 
    • Vladimir Putin and Joao Lourenco spoke about the Russian invasion of Ukraine and agreed to further bilateral relations [source].
    • Angola and Russia signed cooperation agreements in 2019 in areas of trade and defence. A total of 6 SU-30K were delivered to Angola. Luanda also seeks to purchase S-400 missile systems from Russia [source]. Russia remains Angola’s biggest supplier of armaments [source].
    • Angola’s state-run diamond firm says that it could face shortages of machinery and parts due to Western sanctions. The overall production of diamond mines is down by one-third of original production levels [source]. 
    • 40% of Angola’s $73 billion debt is owed to China. Per the IMF, roughly 70% of Angola’s oil revenues will go towards servicing that debt. Chinese capital financed infrastructure projects across Angola [source]. 
    • Angola is a participating country in the Belt and Road Initiative, with heavy investment in the agricultural and energy industry [source].
    • Chinese capital played an enormous part in rebuilding Angola after the civil war ended in 2002, however, Angola’s relationship with China has changed in recent years. Even so, Angola is still reliant on China for sources of finance [source].

    KJ-3: It is highly likely that Angola will continue to enjoy a favourable macroeconomic outlook in the next 6 months. 

    • A boost in oil prices as well as improved liquidity led to an upgrade of Angola’s credit rating [source]. Moreover, the country has improved fiscal transparency in line with IMF recommendations [source].
    • The government has prioritized the repayment of foreign debt going forward [source].
    • Macroeconomic stability in Angola was achieved through careful management of exchange rate flexibility by the Angolan central bank [source]. 
    • Allowing Angolan firms to sell foreign exchange directly to commercial banks led to an appreciation of 23% in the exchange rate [source].  
    • The government passed new anti-money laundering laws and fiscal responsibility regulations in order to support the inward flow of foreign investments [source].
    • The World Bank forecasts Angola’s GDP growth this year at 2.7% in a recovery from the previous year’s recession. Higher oil prices helped fuel the GDP growth and reduction of debt [source]. 
    • A deal with China allowed for the deferment of $6 billion of debt repayments until 2023 [source]. 
    • The MPLA committed to diversifying the Angolan economy. These policies are yet to be translated from rhetoric [source].
    • The government started a cash transfer program and waived import taxes on basic food goods in order to ease the rate of inflation [source].
    • The optimistic macroeconomic outlook should not detract from Angola’s very real economic difficulties that are still undressed [source]

    Intelligence Cut-Off Date 9 September 2022

    Alec Smith
    Alec Smith
    Alec Smith is a graduate of the MSC International Relations program of the University of Aberdeen and holds an LLB in Global Law from Tilburg University.

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