These Reforms Are They Still Continuing for Today
On Sunday 28 August, days after an election returned incumbent President João Lourenço and his People's Movement for the Liberation of Angola (MPLA) to power again, the country's elite attended the funeral of José Eduardo dos Santos, who ruled the country from 1979 to 2017 and was himself leader of the MPLA.
But Lourenço did not receive the reaction that he might have hoped for.
"The leader of the opposition [Adalberto Costa Junior], when he arrived at the funeral, was applauded," says Gonçalo Falcão, who heads the Angola practice of US law firm Mayer Brown. "That did not happen for the president."
The incident reflects a week that marked the end of an era for Angola. As the people of Angola buried dos Santos they also voted in the MPLA with its narrowest majority to date, a mere 51.17% – a decline of 9.9% from the last election.
Unita, the opposition party, significantly increased its vote to 43.94%, winning 90 seats to the MPLA's 124, significantly shifting the political landscape and putting the MPLA in a position where for the first time it will struggle to make constitutional amendments by itself.
The election results reflect a continued erosion of support for the MPLA, which has governed the country since it gained independence from Portugal in 1975 and which in 2008, in its heyday, enjoyed 81.6% support.
"This is a moment of peril for the governing party as the country comes up to 50 years of independence," says Alex Vines, director of the Africa Programme at Chatham House.
A vote of protest against the MPLA
In many ways, the election can be interpreted more as a protest directed at the MPLA than an endorsement of Unita, the MPLA's opponent in Angola's post-independence civil war, which ended in 2002 when Unita was defeated.
"The vote is not intrinsically for the opposition, but more a protest vote with abstention increasing to 55.17%. That's the story of this election. Turnout was much lower," says Vines.
The frustration primarily came from the urban middle class and youth of Angola whose lives have not improved during the past five years, despite the MPLA making a number of much-talked-about economic reforms.
"The bottom line it is that the population has been suffering misery for decades and from the moment when the last president took office to today, nothing has changed," says Falcão.
"You don't see improvements in infrastructure and the slums. People's lives have not improved, despite all the efforts from the government in privatisation and diversification of the economy."
Both Vines and Falcão agree that the MPLA has made many good economic decisions over the past five years, but the government has faced tremendous headwinds that have prevented the people of Angola from feeling their effects. GDP growth is expected to be just 3% this year according to the IMF – an expansion of just 0.7% in 2021 was a tepid recovery after a -5.6% shrinkage during Covid-19.
"My view is the MPLA actually had a good economic team and they've managed the economy through a very difficult period," says Vines.
"They had a terrible inheritance from the former president of 38 years and the kitchen cabinets were pretty empty when Lourenço came in back in August 2017. Then you have a commodity downturn, which continued into last year, and on top of that the outbreak of Covid-19."
As a result, the economy of Angola has suffered and unemployment is rife.
"About half of Angola's 14m registered voters are under the age of 36 and youth unemployment is about 60%," says Vines. "A lot are just surviving."
Jobs and short-term wins a priority
As the election dust settles – Unita has disputed the results, but they are not expected to be overturned – the top priority for the MPLA must be job creation and improving life for the people of Angola.
"They will continue to follow the same economic plan as before. Basically, opening up the economy, increasing privatisation and diversifying the economy. That's the main goal, but all of that has not hit yet and the population has not benefited from these reforms, which take time," says Falcão.
The government has indicated that job creation is a top priority, which both Falcão and Vines agree must be key. "It's all about jobs, jobs, jobs," says Vines.
Additionally, in the short-term, the government might reach for the quick fix of subsidies.
"Like we're seeing in the West, subsidies are coming back into fashion," says Vines. "I think we will see subsidies being used to cushion the strong headwinds of inflation and give a sense that the government is reaching out to those who punished it in the election."
Another area where the MPLA could win back the hearts of citizens is by taking aim at housing and energy supply, important issues in a country where nearly half of the urban population live in slums, according to Statista.
"They need to create jobs and then, with the jobs, help people to finance new, cheap homes that have proper water and electricity. They need to make basic improvements to the population's life," says Falcão.
Oil, mining and FDI could offer boost
The economic reforms, including tentative anti-bribery and anti-corruption reforms, privatisations and efforts to woo foreign investment, have already begun to pay dividends and could offer the government a much-needed boost.
During the last couple of years, foreign companies like De Beers Group – one of the biggest diamond mining companies in the world – have entered the country.
"Angola has a very powerful mining sector that is still untapped," says Falcão. "It is being explored again by foreign entities."
The promise of mining is not limited to diamonds, but also includes more traditional minerals like copper as well as rare earth.
Oil is another resource that promises to continue buoying the economy in Angola.
Angola recently overtook Nigeria to become the leading oil producer in Africa, as the price of oil continues to climb and countries around the world, particularly the US and European nations, seek alternatives to Russian energy.
The global oil supply is expected to only tighten further when the European Union embargo on Russian oil takes effect on 5 December.
One challenge the MPLA faces is the increase of global interest rates, which could increase the debt-to-GDP ratio for the country.
"That's going to limit room for public borrowing for the Angolan government and is something they will have to manage carefully, but I think they will be able to do this because of the increased oil rates," says Vines.
There are a number of other opportunities for economic development, yet much hinges on the ability of the party to stop the erosion of its base and to win back the support of the people of Angola.
For example, Falcão points to opportunities for the MPLA to double down on its privatisation programme – dozens of companies in diverse industries are slated for sale, many of which were held up by the pandemic. The country could also focus on agricultural growth. A major continental producer half a century ago, Angola today spends $2.4bn on food imports annually, according to Statista.
These plans are contingent on the MPLA continuing to successfully court foreign investment, but that may be complicated by the necessity of courting its erstwhile supporters.
Source: https://african.business/2022/09/energy-resources/protest-vote-transforms-angolan-political-landscape/
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