Angola still waiting for promised ‘economic miracle’May 23, 2019
LUANDA, Angola, Nov 21 – “Things are going badly,” said Delta, sitting on a stool and glancing at a bag stuffed with Chinese mobile phones.
As one of scores of traders trying to legally sell her wares in one of Luanda’s most famous markets, known as “The Congolese”, the 32-year-old Angolan’s complaint is not unusual.
Despite the din and bustle of vendors pitching for cash in Angola’s sweltering capital, she is struggling to provide for her two children.
“I see some customers at the end of the month once they’ve been paid – but the rest of the time they don’t come,” she said.
One year after the election of President Joao Lourenco, the oil-rich nation is still waiting for the economic “miracle” that he promised on the campaign trail.
In a country scarred by prolonged war – and where the economic benefits of an oil-fuelled boom have not always trickled down to the mass population – entrenched poverty remains the norm for nearly half the population.
“I’ve sold pork here for more than 20 years,” said butcher Teresa Pereira, grimacing on her stall’s counter as her colleague tried to swat away flies.
“For a long time, business was good, but since the financial crisis (of 2014) it’s been very difficult because of the grey (unofficial) market,” she said.
“Now people are selling on the street… customers are rare.”
After the end of Angola’s bloody civil war in 2002, the country enjoyed a decade of rapid growth fuelled by its booming oil sector.
But in 2014, a global slump in the price of crude, which accounts for 70 percent of government revenues, and the failure of the authorities to diversify the economy, plunged Angola into a serious financial crisis.
Faced with mass unemployment, the mostly poor population turned to the grey and black markets for survival, denying already weakened state coffers of much-needed taxes.
In the depressed economic climate, many tax-paying market vendors pin the blame on the growth of unofficial street sellers and illegal shops often run by foreign nationals, many of them from Nigeria and elsewhere in West Africa.
According to observers, the parallel economy accounts for up to 90 percent of Angola’s fiscal activity.
‘Anarchy and disorder reign supreme’
“If all the informal traders come here to the market to conduct their business (legally), customers would return in force,” said Elisabeth Lumbunga, 43, her hands in a bowl of water as she washed her vegetables before sale.
In pursuit of new tax revenues, the government launched a nationwide crackdown at the beginning of November on “zungas” — the term used to describe illegal traders, who are often undocumented migrants.
“In our society and in our urban centres, anarchy and disorder reign supreme,” said police chief Paulo de Almeida as he launched the operation.
“Our goal is to re-establish public order and the state’s authority.”
His officers were deployed en masse across Luanda, closing illegal shops.
In a heavily air conditioned office decorated with a picture of President Lourenco, the managing director of the market welcomed the police operation.
“The operation against street sellers has already led to a busier market,” said Carla Lubata.
“The government has done all it can for us, we hope that the economy will recover quickly.”
The prognosis is not optimistic.
While global oil prices have roughly doubled since 2016, Angola’s economy is barely growing.
Lourenco’s package of reforms to attract foreign investment, notably structural adjustment efforts, have so far been slow to bear fruit.
The International Monetary Fund predicts the economy will slip into recession in 2018 with a contraction of 0.1 percent.
‘Making a big mistake’?
For those caught up in the police crackdown, it has made tough conditions even harder.
Emmanuel Chizondu, 33, left Nigeria five years ago to build a life in Luanda and had started a profitable, but illegal, small car parts business.
It was closed down by the authorities at the start of the month.
“They closed my business. Now my five Angolan workers cannot work anymore… they have families to feed. Now they are crying,” Chizondu said.
“I understand they want to put their country back into order, but they are making a big mistake.”
Government ministers have promised a return to economic growth next year, but that will largely depend on a rise in oil prices.
Finance Minister Augusto Archer Mangueira recently insisted that Angola’s economy would grow through “rigour, discipline, efficiency and patriotism”.
But some fear the impact on those already below the poverty line.
“It’s good to want to clean up the business environment,” said one diplomat in Luanda who declined to be identified.
“But this transparency push is suffocating people who are living with very little and for whom the situation is very worrying.”