Sonangol investigation “increases perception that Angola is one of world’s most corrupt countries”

It may not be the kind of news Angola’s politicians like to read as they chomp on their breakfast granola, but it’s satisfying the Economic Intelligence Unit.

The business risk analyst arm of The Economist Group considers today that the opening of an investigation into the payment of €350 million to Angolan State oil company Sonangol by oil company Cobalt “increases the perception that Angola is one of the most corrupt countries in the world”.

And that is a good thing… because it might make Sonangol, and the Angolan government, clean up its act.

But it means that Sonangol’s new president, super wealthy Isabel dos Santos – daughter of Angola’s long-standing president Eduardo dos Santos – will really face “a significant challenge” in the run up to the country’s legislative elections.

EIU’s analysis, published in the Economist, comes as Portugal and Angola are at a delicate moment in the two countries’ shared history (click here).

The new investigation centres on a €350 million payment by Cobalt (based in Texas, USA) in conjunction with BP to drill a concession in Angolan waters dubbed Block 20.

The money falls under what’s called in the business “a signature bonus”. It is apparently “common practice”, explains DinheiroVivo, and “represents a payment to the government of a country where companies are going to exploit natural resources”.

The trouble with signature bonuses is they don’t always go where receiving countries say they are going to go.

This one, for example, was destined for a Sonangol research centre. Angola has had the money since 2014 but NGO Global Witness says that in all that time it has not been able to confirm that the centre “really exists”.

This will be a tough one for Angola, but the country is already trying to explain the situation by saying the centre is in “a planning phase”.

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