Will Isabel dos Santos controversial appointment prove to be the right decision?

Will Isabel dos Santos controversial appointment prove to be the right decision?

Human rights activists question the appointment of the daughter of Angolan ex-presedent to chair Sonangol.

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The Republic of Angola

The Republic of Angola is in the Southern portion of Africa bordering the Atlantic Ocean. Oil was first produced in Angola in 1955 and since gaining independence in 1975, Angola has gone on to become the second largest producer of oil in the whole of Africa, although the current problems in Nigeria have temporarily promoted them into first place. Angola joined OPEC (Organization of the Petroleum Exporting Countries) in 2007 and oil now makes up over 95% of its exports and approximately 45% of its total GDP (gross domestic product). Angola is frequently labelled as one of the most corrupt countries in the world however President dos Santos denies this, stating that he has a “zero tolerance” approach to corruption.

Isabel dos Santos

Isabel dos Santos was born in Azerbaijan on the 20th of April 1973 and in 2013 was named by Forbes as Africa’s first female billionaire, with a reported personal fortune of over 3 million US dollars, making her the wealthiest woman in Africa. Her father, Jose Eduardo dos Santos, has been the President of Angola since 1979. In 2015 she was named by the BBC (British Broadcasting Corporation) as 1 of the 100 most influential women anywhere in the world.

Early days

Isabel studied at King’s College London where she obtained a degree in electrical engineering before returning to live in Luanda, Angola, where she took up the position of Project Manager engineer, working for Urbana 2000. At the age of only 24 she established her first business, a beach restaurant and night club called Miami Beach Club on the island of Luanda. She went on to make significant investments in a number of prestigious enterprises in Angola and overseas, particularly in Portugal’s communications sector. A Portuguese newspaper has expressed concerns about the extent of her involvement, suggesting that she uses her family connections, money and influence to ensure success.

Sonangol

Sonangol is Angola’s state oil company and in June 2016 Isabel’s father, the country’s president fired all of the board members and appointed Isabel, his daughter as Chairwomen. He has denied allegations of nepotism instead stating that this is a way of ensuring better transparency as well as guaranteeing consistent compliance to global corporate governance standards. Many people believe that this is just a way of the President ensuring the creation of his own family dynasty, having previously appointed his son as the Chairman of Angola’s sovereign wealth fund, in preparation for his planned resignation in 2018. Others however think that this is actually in order to ensure no repeat of the controversial ‘missing oil billions’ reported to the IMF (International Monetary Fund) in December 2011.

Ambitions

Since her appointment earlier this month, Isabel has confirmed that a full “root to branch” review will be undertaken throughout the state oil firm. This will ensure that she can achieve what she believes to be significant improvements in efficiencies, in turn increasing the company’s profit margins which is essential at a time when global oil prices continue to be so challenging.

She believes that the current problems in Nigeria, including the blowing up of oil pipelines is a massive opportunity for Angola to cement its current position of Africa’s largest oil producer. She said: “Our objective is to increase the revenue, efficiency and transparency of the company,”. “We want to implement governance rules similar to the international standards.”

There are fears that she may instigate some job cuts however she has publically said that her focus at this time is to identify opportunities to reduce production costs. She is also investigating the possibility of building a domestic oil refinery where they could process their own crude oil, reducing the need to import the majority of the gasoline and diesel used in the country.

Accusations

On the 21st June 2016 Rafael Marques, a prominent human rights activist and journalist confirmed that he has requested that Isabel’s appointment is revoked by Angola’s attorney general, suggesting that her appointment was unconstitutional. He told Reuters, “With matters of natural strategic resources, the president cannot change the rules as he pleases. He must seek a request from the parliament. He did not do that and, therefore, the reforms on Sonangol are unconstitutional,”. He went on to say that “The appointments as a consequence of these reforms are also unconstitutional as they are illegal. The president uses his decrees to award state contracts to his family,”.

Interestingly, only few years ago, Dos Santos was driving the development of non-oil sector in Angola, serving as a CEO at the country’s telecom company. In her interview to China Daily at New York Africa Forum 2013, she speaks about her vision for cooperation with Chinese companies in infrastructure development and mining:

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