Angola


Facebook logoTwitter logo

Angola is the second-largest oil producer in sub-Saharan Africa and a major supplier to both the United States and China. It produced 1.8 million barrels a day in 2011 and generated $40 billion in oil and gas revenues. Other minerals, including diamonds, contribute significantly to the national economy. The extractive sector accounted for 46 percent of gross domestic product in 2010 and 79 percent of government revenues in 2011. Since 2010, the Angolan government has taken several important steps to improve revenue and expenditure transparency, including the publication of budgets. However, the reforms have been incomplete and the country’s extractive sector remains opaque.


Angola’s Performance on the Resource Governance Index

Angola received a “weak” overall score of 42, ranking 41st out of 58 countries. Higher marks for Institutional and Legal Setting and Safeguards and Quality Controls were countered by a very low Enabling Environment score.

Rank
(out of 58)
Score
(out of 100)
41 Composite Score 42
33 Institutional & Legal Setting 58
Freedom of information law 0
Comprehensive sector legislation 100
EITI participation 0
Independent licensing process 50
Environmental and social impact assessments required 50
Clarity in revenue collection 83
Comprehensive public sector balance 44
SOC financial reports required 100
Fund rules defined in law 50
Subnational transfer rules defined in law 100
36 Reporting Practices 43
Licensing process 33
Contracts 0
Environmental and social impact assessments 0
Exploration data 67
Production volumes 100
Production value 67
Primary sources of revenue 42
Secondary sources of revenue 67
Subsidies 33
Operating company names 100
Comprehensive SOC reports 50
SOC production data 67
SOC revenue data 54
SOC quasi fiscal activities 33
SOC board of directors 50
Fund rules 0
Comprehensive fund reports 0
Subnational transfer rules 100
Comprehensive subnational transfer reports 0
Subnational reporting of transfers 0
33 Safeguards & Quality Controls 52
Checks on licensing process 78
Checks on budgetary process 22
Quality of government reports 75
Government disclosure of conflicts of interest 100
Quality of SOC reports 50
SOC reports audited 100
SOC use of international accounting standards 100
SOC disclosure of conflicts of interest 100
Quality of fund reports 0
Fund reports audited 50
Government follows fund rules 0
Checks on fund spending 0
Fund disclosure of conflicts of interest 100
Quality of subnational transfer reports 0
Government follows subnational transfer rules 0
48 Enabling Environment 15
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 6
Open Budget (IBP Index) 27
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 18
Government effectiveness (WGI) 12
Rule of law (WGI) 9
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting Rank: 33rd/58, Score: 58/100 learn more

Angola received a “partial” score of 58; while comprehensive laws cover the oil industry, Angola has no freedom of information legislation and does not participate in the Extractive Industries Transparency Initiative.

The state-owned oil company, Sonangol, maintains central control over the sector, despite the Petroleum Ministry’s nominal regulatory powers. Sonangol determines and collects the petroleum profits due to the government, while the Finance Ministry collects income taxes from companies. Sonangol’s finances are not specifically included in the public sector balance, and Angola has not adopted any rules requiring disclosure of information in the extractive sector. Environmental impact assessments are required by law but not published.

Reporting Practices Rank: 36th/58, Score: 43/100 learn more

Reporting on the oil sector is “weak,” with little information available on contract terms and incomplete data on revenue streams and production.

Sonangol published detailed information on bidding for the last major licensing round in 2007–2008. A model production sharing contract serves as the basis for all oil licenses, but the government does not publish specific negotiated terms for exploration, production or contracts with companies.

The Finance Ministry has published pre-2007 data on production volumes, revenues from petroleum taxes, and bonuses. It also publishes monthly values of resource exports and production data by block. The Petroleum Ministry publishes regular reports of production and export figures by block, the government’s share in production sharing contracts, and companies operating in the country. It has published information up to 2007 on reserves, prices, investments in exploration and development, production costs, subsidies, and special taxes. The central bank also publishes information on prices and the value of resource exports.

Safeguards & Quality Controls Rank: 33rd/58, Score: 52/100 learn more

Angola’s “partial” score of 52 reflects several positive steps toward improved transparency, including comprehensive conflict-of-interest disclosure requirements and significant checks on the licensing process, along with inadequate oversight of the budgetary process and the natural resource fund.

Sonangol oversees the licensing process, which is intended to be open and competitive, but direct negotiation is allowed and it is unclear whether licensing appeals procedures are followed in practice. While national auditors have the authority to audit petroleum revenues, they face considerable capacity constraints and there is little legislative oversight of the petroleum sector.

Enabling Environment Rank: 48th/58 Score: 15/100 learn more

This “failing” score of 15 is Angola’s lowest among all RGI components. Angola is near the bottom of global rankings for corruption and rule of law.


State-Owned Companies Rank: 13th/45, Score: 70/100 learn more

Sonangol is entirely owned by the government. In addition to overseeing the oil sector, the company distributes subsidized fuel and undertakes other quasi-fiscal activities. Sonangol’s 2010 report included for the first time details on reserves, production volumes, production costs, resource export values by block, estimates of investments in research and development, the names of companies operating in the country, production data by block, quasi-fiscal activities, the government’s share in production sharing contracts, special taxes, bonuses, dividends, license fees, and acreage fees. Sonangol’s financial statements are independently audited and include consolidated accounts that cover all of its subsidiaries.

Natural Resource Funds Rank: 16th/23, Score: 25/100 learn more

In 2004, Angola established a Reserve Fund managed by the central bank to conserve windfall profits during times of high oil prices. There is no information on the fund’s assets, transactions or investments. In 2011, the National Assembly passed a law requiring certain petroleum tax revenues be deposited in the fund; with presidential approval these revenues can be used to cover national budgetary expenditures.

Subnational Transfers Rank: 24th/30, Score: 33/100 learn more

The government transfers a percentage of petroleum tax revenues to producing regions. Rules for these transfers are published for some provinces, but their amounts are not reported by the central government.

View full questionnaire for Angola Download questionnaire for Angola