President José Eduardo dos Santos returned to Angola on 11 August after a 46-day absence, easing concerns over his health, which had prompted questions over presidential succession.
IHS Global Insight perspective
The president's extended absence from Angola led opposition parties to question his health and fuelled speculation as to what the transition process will look like when dos Santos leaves office.
There are several succession scenarios, dependent on how dos Santos vacates office, each with varying political and commercial implications.
In the most probable outcome of a controlled handover, leadership may remain concentrated in the dos Santos family, raising civil unrest risks and preventing meaningful reform in the regulatory and operational environments.
Angolan president Jose Eduardo dos Santos arrives at a convention in Lusaka, Zambia
In early August, Angolan independent media and websites started enquiring into the prolonged absence of President José Eduardo dos Santos from the country. Dos Santos had left Angola on 26 June for a "private visit" to Barcelona, but remained there far longer than the reported 20 days that were scheduled for the trip. As opposition parties, including the National Union for the Total Independence of Angola (União Nacional para a Independência Total de Angola: UNITA) started to ask about his whereabouts and rumours were mounting about his health, the president returned following his participation at the Gulf of Guinea Conference Summit in Malabo, Equatorial Guinea, on 11 August. This has for now averted the danger of an uncontrolled succession, but highlights the risks that such a scenario would pose.
Political stability in Angola depends almost entirely on President José Eduardo dos Santos' ability to balance the different factions within his ruling Popular Movement for the Liberation of Angola (Movimento Popular de Libertação de Angola: MPLA). Dos Santos, in power since 1979, was elected in August 2012 for a further five-year mandate. The 2010 constitution allows the ruling party to nominate presidential and vice-presidential candidates. Constitutionally, in the event that the office of president is vacated, the vice-president will assume the duties. Following his 2012 election victory, Dos Santos elevated former oil executive Manuel Vicente to vice-president. This seemingly clarified his preference for succession of party leadership, although several scenarios remain possible with differing political and commercial implications.
Scenario one: Controlled handover
The most likely scenario is that President dos Santos will complete his mandate and hand over power to a successor of his choice, currently Vice-President Manuel Vicente, shortly before or after the next election in 2017. However, as the 2012 electoral victory has been interpreted as a plebiscite for dos Santos' leadership, we assess that Vicente may be being used as a "placeholder" while one of the president's sons, José Filomeno "Zénú" de Sousa dos Santos, is groomed for the presidency. Zénú is currently chairman of the board of the recently created, oil-financed Angolan Sovereign Wealth Fund (FSDEA), with a starting budget of USD5 billion, half of which will be placed with fixed income generators such as sovereign agencies, G7 equities, and supranational institutions, while the other half will be invested in agriculture, mining, and emerging market stocks, among others. This scenario would mean the perpetuation of the status quo, whereby the safeguarding of the commercial interests of the dos Santos family, such as those in the energy, construction, banking, telecommunications and mining sectors, and dos Santos' protection from prosecution is the top priority.
In this scenario, the main risk is social unrest and a return of anti-government protests in all major cities. Previous demonstrations in 2011 and 2012 protested socio-economic conditions for a majority of the population, the dearth of public services and the perceived ostentatiousness of the wealthy elite. As the current patronage network is reaching its limits to quell popular discontent, unless the current MPLA-led government (2012–2017) makes good on its electoral promise to increase social welfare programmes, the risk of further protests will increase. Although commercial property is unlikely to be targeted, the usually violent repression by security forces raises risks of collateral damage and injury to bystanders.
Also, because of the MPLA's majority in parliament, the government has few incentives for a constructive dialogue with the opposition, and there is thus less pressure to undertake the necessary reforms with regard to corruption and safety measures for the fast-growing banking sector. Main risks to foreign operators are reputational risks and adverse discrimination, due to perceptions of high corruption levels on the one hand, especially in the attribution of tenders, and on the other, risks of non-payment and delays due to the inefficient and non-transparent management of resources.
Scenario two: Power struggles
Now that President dos Santos has returned to his normal functions, succession scenario one is the most likely pathway unless he dies or is incapacitated ahead of the 2017 election, preventing an arranged succession. Indeed, more prolonged and unexplained absences in the four-year outlook would further highlight the risk of an uncontrolled succession, which would exacerbate factional rivalries within the MPLA. Many party members are critical of the predominance of the dos Santos clan and their close allies, and their monopolisation of the Angolan economy. While the party has grudgingly accepted Vicente as vice-president, his position is far from secure in the case of the president's death or incapacitation. The "Old Guard", veterans of the independence struggle who felt snubbed at the 2012 election, are likely to try to impose one of their own as the new president. Possible candidates would be former prime minister and Speaker of the National Assembly, Fernando da Piedade Dias dos Santos "Nandó" or party stalwarts like Roberto de Almeida or Julião Paulo "Dino Matross". In this case, the dos Santos family would face greater pressure to divest its assets, while a reshuffle of industry gatekeepers would also be likely, thus increasing the risk of contract renegotiations. Energy sector contracts, which effectively already bypass the Angolan state, would be at lesser risk of renegotiation than other key sectors such as mining, banking, construction and telecommunications. However, if a younger generation of Western-educated technocrats (such as Minister of Territorial Administration Bornito de Sousa) gains a larger say, this could also see the beginning of more serious anti-corruption measures, improving transparency and the stability of financial institutions in the long run.
However, those power struggles are likely to play off within the MPLA party and could even include a period of time where the death or incapacitation of dos Santos is kept secret from the public, until the succession is decided. A second risk would be concerted opposition pressure denouncing the MPLA's nomination of a new president without elections as unconstitutional and calling for fresh elections. Opposition parties have already severely criticised the government and public media's silence over dos Santos' absence. Especially if major opposition parties UNITA and CASA-CE join forces with the nonpartisan youth protesters, the potential for sustained, widespread civil unrest is likely to rise.
Scenario three: Negotiated transition
In an alternative scenario to a protracted power struggle following President dos Santos' sudden death or incapacitation ahead of the 2017 election, the MPLA leadership would reach out to opposition parties to either form a broad coalition or prepare for more inclusive elections, less marred by fraud and voter disenfranchisement. This scenario would pose the lowest risk to commercial interests and could improve the political will to enact socio-economic reforms for the benefit of the population that go beyond lip-service to development goals and top-down infrastructure projects with little sustainable impact on people's lives, which would reduce the risk of widespread civil unrest. This scenario is less likely in the case of dos Santos' stepping down (in which case scenario one is most likely), but could become more likely in case of his death, if moderate MPLA party stalwarts like Marcolino Moco, João Lourenço or Irene Neto use their personal standing and influence to push for concentration with all social forces.
Outlook and implications
The most likely scenario in a country where the president has sought to maintain a detailed level of personal involvement in all aspects of the political environment is a controlled handover of power. Barring a serious deterioration in the president's health, this is likely to occur around the time of the 2017 elections. Such a scenario, which protects the interests of a narrow elite, is likely to lead to civil unrest in Luanda, with would be met with forceful opposition from the state security forces. In many senses therefore, the long-term outlook is for a continuation of the status quo with minimal political dialogue between the leading party and the opposition producing little incentive to pursue regulatory reforms, but also going some way to protecting foreign investors from uncertainty regarding contract renegotiations or revisions.