Angola is one of the largest oil exporting countries in Africa with contradicting issues like wealth inequality and underdevelopment. Angola is facing such problems despite having a very high gross domestic product (GDP).  Economists classify such countries as a rentier state.  They are the states, which gets unordinary revenues from natural resources. Angola is one of such countries because of its high dependence on oil, a natural resource. The Problems facing Angola are common to other rentier countries which economist refers to as a resource curse. The resource curse is a situation where countries rich in natural resources face authoritarian leadership, which withholds citizen accountability to resource allocation. This study analyses resource cause in Angola, its causes and the effects it has on the country and the surrounding. Also, it suggests a policy to solve the problem, its benefits, and challenges.

Analysis of Angola’s Resource Curse

There are enough economic statistics to qualify Angola as a rentier state. The country depends heavily on a natural resource, oil that contributes to 95 percent of all export and 45 percent of the country GDP (Central Intelligence Agency, n.d). However, the presence of oils has brought many problems than benefits in the country. The crisis includes authoritarian government, unequal distribution of wealth, political instability and conflicts between groups. Most of the Angolan citizens are suffering more than it would have been without the resource.

Although the country holds fair elections, the political system is far from democracy with leaders exhibiting an authoritarian regime. The government institutions, serve selected individuals and institutions such as the elite, military and the president (Cameron, 2017). Such institutions aim for a share of the profit from oil and therefore shift their service from the citizens to the government officials. As a result, the government can avoid developments without anybody questioning leaving the citizens to suffer more than the time of civil war. The government and a few elite people manipulate the institutions to protect them as they pocket most of the revenue collected from the oil. Also, government threats make the institutions to protect the presidency from corruption scandals (Baumgartner, 2016). All those mechanisms keep the government free from public criticism.

The current regime has gone further to make Angola a one-party state.  Selfishness to consume profit from the natural resource is driving such aims. It, therefore, means that there will be no opposition to oversee the corruption going on in the oil field. All those in opposition join the government to squander oil money. The government is centralized with the president at the top and a sophisticated protection network below (Cameron, 2017). The president uses the system to bring confusion against each to prevent them from seeing a huge amount of money going into the pockets of a few and not to the citizens.  There are therefore regular ignited conflicts between different political and business groups to represent the presidency as a clean office. The various constituents whom the president uses are equal in political power, and they include the Movement for Total Liberation of Angola (MPLA), which is the ruling party, the oil company, ministry of planning, economy, and finance (Baumgartner, 2016). Also, there is intelligence and armed forces.

Another problem facing the country is the conflict between political groups. The various political parties have been fighting for several decades, and the battle seems to continue. The three major political parties, MPLA, Social Renewal Party (PRS) and the UNITA although they were together in fighting for Angola’s independence, they later fought against each other at the time of the civil war (Cameron, 2017). The conflicts arise because of disagreements on sharing and use of the vast oil profits. In the first general election held in 1992, there was supposed to be a runoff for the president. However, there emerged violence with the opposing parties to MPLA claiming that there was no transparency in the elections. The need for power to control oil business resulted in such conflicts. Another conflicting group was Cuba, South Africa, the United States, and the Soviet Union, which sidelined with separate guerilla movements involved in the civil war (Organization of Petroleum Exporting Countries, 2015). The guerilla groups together with those other countries were fighting to have control over the oil.

The conflicts between groups now evolve to political manipulation by the presidency to use them. The presidential system of Angola prescribes that the president shares the powers with other leaders (Baumgartner, 2016). However, the former president Dos Santos had pulled all the powers towards the presidency. Dos Santos has commanded the military, headed the state as well as the ruling political party MPLA. The presidency is working to win any person with political ideologies of serving citizens with revenue from the fuel.

Angola is also experiencing a high rate of corruption. The government lacks transparency in its financial transactions, which it classifies among the state, secrets. Transparency International, in their corruption perception index released in 2014-ranked Angola number 161 out of 174 in corruptions (Transparency International, 2014).  The country is losing much money into the pockets of a few from the oil trade. Lack of transparency is intentional to hide the actual revenue, which the state gets from the oil. The estimate of money lost form Freedom House is above one billion dollars every year. The government maintains cloud transactions where the institutions concerned with transparency like the Catholic Church cannot access them.

The standard of living for Angola’s citizens is meager. The government is not concerned with developments, which would raise the living standards of people. The fact that Angola is earning a lot form the oil business with a 45 percent GDP does not make the government change the lives of people from the way they were during the civil war (Cameron, 2017). There have been no programs, to help people recover from a series of independence and civil war. The efforts of the International Monetary Fund (IMF) to negotiate with the Angolan government in ways of helping people recover from the civil war have failed (Cameron, 2017). The government does not want to disclose its transactions, which IMF need to initiate such programs. Also, the government does not awn to much interference from such organizations to avoid exposure of their dirty oil deals.

Source of Angola’s Resource Curse

The primary cause of the resource curse in Angola is poor institutions. On the one hand, investing in oil, which is in plenty, has forced the state to grow very fast to a level, which bureaucracy and institutions cannot control (Baumgartner, 2016). The government has become so rich and therefore powerful beyond control from the opposition, human rights activists among other groups. The oil industry in Angola came at a time when the government was experiencing tension form the independence war that had just ended. However, after independence and before the government became stable, a civil war emerged lasting for 27 years (Cameron, 2017). At that time of war, the military, which was in control, was not in a good position to manage resources. Poor management made the country to rely solely on oil. There no stable structures in the government to supervise the natural resource at that time. Lack of a structured institution to manage the oil resource led to the emergence of a government, which was selfish against the business. To be able to continue practicing poor management, the government had to come up with a way in which it could avoid being accountable to the citizens. The result was an authoritarian government as it is today to spearhead corruption.

A corrupt government led to a group of elite people who would also gain from the resource. The government could not spearhead corruption without experts to for market and device mechanisms of making a profit. The result is an oil business, which a few wealthy people control in Angola. There is no honesty in the oil business because all the people involved speak the same language of corruption (Cameron, 2017).   Another source of resource curse is government support of corrupt institutions to suppress their opposition efforts. Angola’s government has manipulated the media, opposition parties, and civil societies so that it can exercise corruption without any opposing force.

Effect of Angola’s Resource Curse to Africa

Resource curse in Angola is affecting Africa by spreading the curses like corruption and authoritarian governments to other leaders creating a continent of corrupt country heads. Angola being the second largest oil producer in Africa has a significant influence on other counties, which depend on the oil (Cameron, 2017). Most of the leaders engage in the corrupt deals with the country, which they later spread to the whole nation. Angolan government does not participate in clean arrangements, which would keep records of sales and payments. The leaders force heads of other countries to hide details of the transitions with a promise of compensation with the corrupted money. Such leaders end up becoming corrupt in their countries. Also, authoritarian leadership attracts them to become similar to the Angolan leaders. The whole continent of Africa, therefore, suffers corruption distributed by Angola.

Policy to Solve the Problem

There should be a law or directive to have transparency in all government transactions, to minimize corruption. Transparency will allow proper utilization of the oil revenue to benefit every person thereby reducing the unequal distribution of wealth analogy (Topal, & Toledano, 2013). Also, the country will use much money to carry out developmental programs raising the standards of living for the citizens. However, there is a challenge in accepting the policy from essential decision-makers in the country. Many people and institutions, which would support the policy, are corrupt. It will be hard for such people with experience of good money from corruption to allow such a plan to go through. The few remaining groups like the Catholic Church do not have enough voice to outdo the current system.

Among the recent working, policies to avert the problem in Angola is public financial management. The country takes a position to account all the revenue collected from the oils. The policy will bring about transparency and therefore reduce corruption and conflicts between political parties and other groups. There is also anti-corruption policy, which has come with the current president, Joao Lourenco, to stop corruption further in the oil business. The plans aim at going for those with corruption cases and also protect theft of public funds. All the policies will see the lives of citizens improve.

Conclusion

The problem of resource curse is so intensive in Angola that it has extended for many years without change. The most affected people are those who cannot have a share in the government. The government has taken a few people and institutions, to use in carrying out corruption leading to wealth inequality. All the institutions, which would help the citizens overcome the corruption, underdevelopment and unequal distribution of wealth are in the hands of the government enjoying from the basket of bribery. The problem has left the citizens in the same poor states they were during the civil war. Interventions from different institutions like the IMF have not been able to change the authoritarian regime. The problem has an effect of spreading corruption on the other African countries. Transparency in the government would solve the problem although most institutions are corrupt to institute the policy.

References

Baumgartner, B. (2016). Angola – an Oil Dependant Country in Sub-Saharan Africa. Studia Commercialia Bratislavensia, Vol 9, Iss 35, Pp 233-242 (2016), (35), 233.

Cameron, L. (2017). Reversing the Resource Curse in Angola.

Central Intelligence Agency. (n.d). Angola | CIA World Factbook – The best country factbook available online. Retrieved from http://www.ciaworldfactbook.us/africa/angola.html

Organization of Petroleum Exporting Countries. (2015). Angola Facts and Figures. Retrieved from http://www.opec.org/opec_web/en/about_us/147.htm

Topal, J., & Toledano, P. (2013). Why the Extractive Industry Should Support Mandatory Transparency: A Shared Value Approach. Business & Society Review (00453609), 118(3), 271–298.

Transparency International. (2014). Corruption Perceptions Index 2014: Results. (2014). Retrieved  from http://www.transparency.org/cpi2014/results