Angola: Disappearance of $4.2 billion in oil revenue undermines fundamental rights
More than four billion dollars in state oil revenue disappeared from Angolan government coffers from 1997-2002, roughly equal to the entire sum the government spent on all social programs in the same period, Human Rights Watch says in a new report. Meanwhile, although the 27-year civil war ended in 2002, an estimated 900,000 Angolans are still internally displaced. Millions more have virtually no access to hospitals or schools. According to United Nations estimates, almost half of Angola's 7.4 million children suffer from malnutrition.
(New York, January 13, 2004) More than four billion dollars in state oil
revenue disappeared from Angolan government coffers from 1997-2002,
roughly equal to the entire sum the government spent on all social
programs in the same period, Human Rights Watch said in a report released
today.
Meanwhile, although the 27-year civil war ended in 2002, an estimated
900,000 Angolans are still internally displaced. Millions more have
virtually no access to hospitals or schools. According to United Nations
estimates, almost half of Angola's 7.4 million children suffer from
malnutrition.
"While ordinary Angolans suffered through a profound humanitarian crisis,
their government oversaw the suspicious disappearance of a truly colossal
sum of money," said Arvind Ganesan, director of the Business and Human
Rights program at Human Rights Watch. "This seriously undermined Angolans'
rights."
The 93-page report, "Some Transparency, No Accountability: The Use of Oil
Revenue in Angola and Its Impact on Human Rights," details how much money
was generated by oil, how much disappeared from public coffers, and how
this shortfall undermined Angolans' civil, political, economic, social and
cultural rights.
Angola is sub-Saharan Africa's second largest oil exporter after Nigeria.
State oil revenues surged after oil companies such as BP, ExxonMobil and
Total expanded Angolan operations in the late 1990s. Those oil revenues
totaled U.S.$17.8 billion from 1997 to 2002, or about 85 percent of total
government revenue. But an analysis of figures from the International
Monetary Fund (IMF) shows that U.S.$4.22 billion of that total has gone
missing, or roughly 9.25 percent of the country's gross domestic product
(GDP) annually.
In those same years, total social spending in the country-including
Angolan government expenditures as well as public and private initiatives
funded through the United Nations' Consolidated Inter-Agency
Appeal-amounted to $4.27 billion.
Governments in many countries argue that they do not have the resources to
fully realize the economic and social rights of their populations, such as
the right to health or education. But they are required to make a good
faith effort to use their available resources to fulfill their
obligations. The Angolan government has clearly failed to do this since
it squandered such enormous sums through corruption and mismanagement,
Human Rights Watch said.
The Angolan government has refused to provide information about the use of
public funds to its population, thereby undermining the right to
information. It has failed to establish hundreds of badly needed courts
and allowed the judiciary to become dysfunctional, undermining Angolan's
ability to hold government officials and others accountable. And it has
not fully committed to free and fair elections.
The Angolan civil war-fought between the government and the National Union
for the Total Liberation of Angola (UNITA)-subsided from 1994 to 1998,
then resumed. Two months after UNITA leader Jonas Savimbi was killed in
combat, a peace agreement was reached in April 2002.
"The Angolan government says the international community should do more to
fund schools, hospitals and courts, but it refuses to explain where
billions of dollars of government revenue went," said Ganesan. "Any
further aid to Angola should be conditional on very strict requirements
for transparency in the government budget."
The Human Rights Watch report examines the Angolan government's failure to
implement IMF reform programs that could have led to greater transparency
and accountability. Human Rights Watch also looks at the progress of the
"Oil Diagnostic" study, commissioned by the government and the World Bank
and conducted by the accounting firm KPMG to determine how much oil
revenue is actually deposited into the Angolan central bank.
Since the mid-1990s, the government and the IMF negotiated four reform
programs to increase transparency. Three were implemented, but ultimately
failed because of the government's lack of commitment to reform.
Similarly, there have been several international initiatives-notably the
Extractive Industries Transparency Initiative (EITI) led by the British
government, and the Publish What You Pay (PWYP) campaign organized by a
coalition of non-governmental organizations-which are intended to promote
greater government and corporate transparency over revenues. The Angolan
government has not committed to either initiative.
In October, the financier George Soros and his Open Society Institute
negotiated an agreement with the Angolan government to implement a
wide-ranging set of reforms to increase transparency of oil revenues. But
the government has delayed signing the agreement, which is currently in
limbo.
"There have been many initiatives to promote transparency in Angola, but
each time, the government walks away," said Ganesan. "It's an issue of
political will."
Human Rights Watch called upon the Angolan government to publish all of
the "Oil Diagnostic" reports, conduct audits of the state-owned oil
company Sonangol, and participate fully in international initiatives to
promote transparency.
Donor governments and international financial institutions, such as the
IMF and World Bank, should include stringent measures to improve
transparency as preconditions to any future agreements with the Angolan
government, Human Rights Watch urged.
"Some Transparency, No Accountability: The Use of Oil Revenue in Angola
and Its Impact on Human Rights," is available at:
http://www.hrw.org/reports/2004/angola0104/
Human Rights Watch Press release