Items of Interest: April 16

The following items from April 16 may emerge to become significant factors impacting geomarket developments in Africa:

Angola: The Attorney General’s anti-corruption directorate (DNPCC) announced it recovered $286 million from funds fraudulently managed by the China International Fund (CIF)-Angola for the construction of Luanda’s new international airport (a project that has seen very extensive delays).

Significance: The recovery of $286 million is the second instance of the Angolan government’s coercive measures program to compel the return of embezzled state assets. Additionally, the funds recovered from CIF-Angola were part of Angolan government contracts awarded by the previous administration of then-President José Eduardo dos Santos to private companies controlled by senior figures in the dos Santos regime, to include former Vice President Manuel Vicente, former head of presidential security Leopoldino do Nascimento “Dino” and former security advisor Manuel Hélder Vieira Dias Júnior “Kopelipa.” While the Angolan anti-corruption office has investigated the former regime officials for suspected crimes of financial embezzlement, this is the first instance of coercively recovering assets under their management. 

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Angola: Defense Minister Salviano Sequeira stated he has no reports of alleged attacks on Angolan armed forces in Cabinda province as claimed by the Front for the Liberation of the Cabinda Enclave (FLEC). Sequeira added the exclave territory was calm. 

Significance: The statement of calm in Cabinda province comes a day following a claim by the armed forces command of the Front for the Liberation of the Cabinda Enclave of an ambush on Angolan soldiers in which three were killed. The characterization by the Angolan defense minister, who reportedly queried his armed forces chief of staff, is unsurprising given financial motivations the Angolan government faces in minimizing security risks in the oil-producing province. Verifying truthful accounts of the security and socioeconomic conditions in Cabinda is difficult and often depends on indirect reporting by unbiased stakeholders such as the Catholic church and other opposition parties.

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South Africa: Moody’s cited concern that the government’s debt liabilities may become inconsistent with the Baa3 rating that South Africa is currently assigned.

Significance: Moody’s did not publish a review of its South Africa sovereign credit rating as generally expected last March 29 and instead may review its rating on November 1. With national elections in South Africa due on May 8 and the ruling African National Congress providing political and financial subsidies to loss-making state-owned enterprises so as to defend the party’s electoral advantage, Moody’s is likely signaling the directionality its sovereign credit review will take on November 1.

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Tanzania: $737.50 million in credit guarantees were obtained so as to advance the country’s Stiegler’s Gorge hydroelectric dam project. 

Significance: Contracted to Arab Contractors Company, the estimated $3 billion, 2,110-megawatt project could begin construction in May with hopes of completion in 2022. The electricity generation project is one of several high impact government-backed priorities initiated by the Magufuli administration while the Tanzanian government negotiates more favored terms over private sector operators in the country notably in the mining and natural gas sectors. 

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