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Implications of dos Santos` declared intention to resign

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Implications of dos Santos` declared intention to resign
Rhombus Advisors
March 14, 2016
LLC
Omotunde A.J. Mahoney
+1-973 509 5300
ANGOLA RESEARCH NOTE
Implications of dos Santos’ declared intention to resign
A veritable coup de théâtre, announced during Friday’s meeting of the Central Committee of
the ruling MPLA, the prospect of the President’s resignation ushers in a period of
considerable uncertainty.
1) The 2018 date that the enigmatic José dos Santos (a.k.a. ‘Zédu’) has indicated for leaving office1 falls
after the legislative elections scheduled for 2017, a time-line that signals his candidature for a new
mandate2. The question is, what then?
2) As Angola-watchers will recall, this is not the first time that Zédu has ‘planned’ to resign the
presidency. As far back as 2001, nine years after he was first elected President3, he informed the Central
committee that he would not be a candidate at the next elections4.
3) It is therefore no wonder that Friday’s announcement has been greeted with such scepticism in
Luanda - not just by the political opposition, but even among members of the ruling party5. Yet even if
one suspends disbelief and takes dos Santos at his word, the question of succession looms large in the
absence of an heir-apparent.
4) Some observers have posited a dynastic hand-over to the President’s son José Filomeno (a.k.a. Zénu) –
a proposition we find unpersuasive.
Although very active in the business arena6, he lacks a political base in the ruling party. As such, it
seems highly improbable that powerful members of the Central committee, like Manuel Hélder Vieira
Dias (a.k.a. ‘Kopelipa’), would accept Zénu succeeding Zédu.
5) Under Angola’s 2010 constitution, it is in fact the Vice President who stands first in the line of
succession, in the event of the presidency becoming vacant. However, there are strong indications that
the personal star of the incumbent, Manuel Domingos Vicente7, is on the wane.
1
The language of the presidential declaration was no less dramatic than its message, viz.: ’Tomei a decisão de abandonar e terminar a
minha vida política em 2018 (I have decided to relinquish and conclude my political life in 2018).’
2
Under the Angolan constitution, the president is chosen by indirect election, the position going to the leader of the party securing a
majority of the 220 seats in the National Assembly.
3
By then, of course, more than two decades had elapsed since dos Santos acceded to the presidency upon the death of his predecessor
Agostinho Neto in 1979.
4
‘É claro que esse candidato desta vez não se chamará José Eduardo dos Santos (Evidently the party’s candidate this time around will not be
named Jose Eduardo dos Santos).’
5
According to Luís Fernando, executive director with Grupo Media Nova and a member of the MPLA, ‘O facto de ter escolhido 2018 para
sair e não 2017 é um mistério insondáve (The choice of 2018 and not 2017 as a departure date is an unfathomable mystery’ – quoted in
“Retirada ou pré-candidatura? José Eduardo dos Santos diz que sai em 2018”; PÚBLICO, Mar. 11, 2016.
6
One of the author’s more vivid recollections from Luanda is of being informed of José Filomeno’s success in the 2010 auction to
privatize the telephone operator Movitel - more than a year before of bids were even invited. He was appointed chairman of Angola’s
sovereign wealth fund in June 2013.
CONFIDENTIAL
Although his name has featured prominently in the ongoing criminal investigation into the affairs of a
former Lisbon prosecutor8 arrested in Lisbon almost three weeks ago, there have been no protestations
of Vicente’s innocence by any Angolan officials. This stands in sharp contrast to the vociferous chorus of
solidarity that erupted in 2014 when the Brazilian authorities arrested Gen. Bento Kangamba ... on
charges of human trafficking and running a prostitution ring9.
5) What this means is that the President’s over-riding priority over the next two years will be to identify
a successor who is not only acceptable to the MPLA, but can be counted upon to safeguard the dos Santos
family’s extensive interests in the country.
Failing this, Zédu will simply desist from stepping down in 2018.
6) These distractions are intruding at a time when Angola’s oil-dependent economy requires intensive
care. Indeed, one of the final topics on the agenda of Friday’s Central committee proceedings – and the
subject of an as-yet unpublished report – was: ‘Strategy to address the crisis arising from the collapse of
international oil prices’.
Regrettably, developing and implementing a meaningful response to Angola’s terms-of-trade shock10
will require considerably more work than this.
7
Appointed to the position in 2012, Vicente is, like his boss dos Santos and many of the Angolan nomenklatura, an alumnus of the
national oil company Sonangol.
8
Orlando Figueira stands accused sabotaging two separate investigations in 2012 (when he was still a prosecutor), into welldocumented evidence of corruption involving the Angola Vice President. He also faces several charges of money-laundering arising from
a series of suspicious funds transfers he subsequently made on behalf of Manuel Vicente whom he was now representing as a private
attorney. (See “Procurador suspeito de corrupção fica em prisão preventive” published in PUBLICO, Feb. 25, 2016).
9
See “Justiça Brasileira Mantém Acusações contra Bento Kangamba” published by Maka Angola, Jul. 21, 2014.
10
One the more disturbing manifestations of the fiscal repercussions of this crisis is the crumbling of the health-care system, evidenced
by the current epidemic of yellow fever raging in 10 of the country’s 18 provinces.
This Report has been prepared purely for the purposes of information and neither constitutes, nor is intended to constitute an offer to sell or the
solicitation of an offer to purchase securities. Although the statements of fact in this Report have been obtained from, and are based upon sources that
Rhombus Advisors LLC believes to be reliable, the Firm does not guarantee their accuracy, and any such information may be incomplete or condensed.
All opinions and forecasts included in this Report represent the Firm’s judgement as of the date of the Report and are subject to change without notice.
Rhombus Advisors
LLC
CONFIDENTIAL
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