Is It Portugal’s Turn to Gain ‘Freedom’ From Angola? - OZY | A Modern Media Company
Forty-five years after Angola gained independence from Portugal, the tables have turned.

WHY YOU SHOULD CARE

Because sometimes the hunter becomes the hunted.

By Eromo Egbejule

  • Forty-five years after Angola gained independence from Portugal, the tables have turned. Angolan investors now run many of Portugal’s major businesses.
  • With a new regime in Angola, those ties might come undone. Is it Portugal’s turn to gain economic independence?

José Eduardo dos Santos’ State of the Union address to Angola’s Parliament in October 2013 included a shocker: Trade with former colonial master Portugal — for which the country remains the fourth-largest export destination — would be stopped, the then president threatened. “There have been misunderstandings at the highest level of the state, and the current political climate does not encourage the implementation of the previously announced strategic partnerships,” dos Santos said. 

The presidential rebuke was prompted by Portuguese investigations into financial dealings of the Angolan elite, including members of dos Santos’ family. It didn’t help that Portugal’s foreign affairs minister, Rui Machete, had publicly withdrawn his apology to dos Santos under pressure from the Portuguese public. And Luanda was willing to flex its muscles, aware of the economic lifeline it provided to Lisbon. Relations improved. Today, Angola and Portugal are witnessing a remarkable turnaround in their relationship, 45 years after the Central African state gained independence following 400 years of colonial rule.

PORTUGAL-FINANCE-BANK-BCP

Pedestrians walk past a Millennium BCP branch in Lisbon.

Source PATRICIA DE MELO MOREIRA/AFP via Getty

Angola’s economy grew from a state of chaos to stability in the years following the 2002 end of the country’s civil war, expanding by more than 8 percent in 2012. Around the same time, the Portuguese economy was smarting from the eurozone crisis.

So when Portuguese Prime Minister Pedro Passos Coelho went hand in hand to beg the Angolan presidency in 2011 to invest in its privatization program, Africa’s second-largest oil producer, brimming with Chinese investments and billions of petrodollars in revenue, rose to the occasion.

In Angola, they call Portugal ‘the laundromat.’

Ana Gomes, former member of the European Parliament

Angola’s elite began investing in Portugal — while the latter’s middle and lower class increasingly started migrating to the former colony for work and business opportunities. Ties between the elite of both countries go back many years “to the time some were in the same schools or got to know each other in the formative years,” says Carlos Lopes, a professor at the University of Cape Town and a former executive secretary of the United Nations Economic Commission for Africa.

For a decade now, Angola’s state oil corporation, Sonangol, has been a major shareholder in Millennium BCP, Portugal’s second-largest bank by assets. A third of the popular soccer team Sporting Lisbon is in the portfolio of Luanda-based holding company Holdimo.

Portugal’s Golden Visa program, which awards residency to non-EU citizens after investments upward of 350,000 euros ($415,000), has also lured many Angolan oligarchs and politicians to spend — and launder — money in Lisbon. “In Angola, they call Portugal ‘the laundromat,’” Ana Gomes, a Portuguese diplomat and former member of the European Parliament, says wryly.

The most influential of them remains Isabel dos Santos, the former president’s billionaire daughter who chaired Sonangol for almost two years until she was fired by her father’s successor, João Lourenço, for corruption. In 2015, she acquired a 65 percent stake in Portuguese power corporation Efacec for 200 million euros ($236 million). According to the Luanda Leaks investigation by the International Consortium of Investigative Journalists earlier this year, she is also part owner of Portuguese bank EuroBic and holds significant interests in the country’s telecommunications and real estate sectors. 

The new relationship between Angola and Portugal hasn’t always been smooth. When oil prices plummeted in 2014, causing the Angolan economy to contract for a few years, the heat was felt 3,600 miles away in Portuguese households whose breadwinners were affected by the economic fluctuations.

The combination of reduced oil prices, limited access to credit and the crisis surrounding Brazilian construction conglomerate Odebrecht — the company at the heart of Latin America’s infamous Operation Car Wash scandal was also a major public works firm in Angola — was a “rude awakening” for Angola, says Lopes, who grew up in Guinea-Bissau, another former Portuguese colony. It has led to a fiscal deficit and has eroded the purchasing power of the Angolan kwanza, he says.

When Isabel dos Santos’ accounts in Lisbon were frozen earlier this year as part of investigations by the Lourenço administration, that also created a ripple effect. Angolans are now divesting many of their shares in key Portuguese corporations. “There is no appetite in the current regime in Luanda to pursue the approaches of the past,” Lopes says.

That shift could potentially hurt both economies. But decades after Angola gained political independence, the transition could perhaps grant Portugal financial independence from its former colony.

Sign up for the weekly newsletter!

Related Stories