Africa in the news: Angola faces debt pressure, Côte d’Ivoire pledges economic resiliency after attacks, and Nigerian audit highlights missing oil revenues

Angola cuts budget spending as oil revenues continues to decline

This week, Angola cut its 2016 budget spending by 20 percent amid economic pressure related to the 70 percent decrease in oil prices in the last 18 months. When drafting the 2016 budget, Angola accounted for a barrel of oil priced at $45. The budget cuts now account for a $39-a-barrel oil price and Finance Minister Armando Manuel stated that, if necessary, the budget could be cut further by June. The current price of an oil barrel lies below $40 per barrel.

Additionally, Angola continues to face pressure related to its debt. This pressure is exacerbated by the use of oil for loan repayments, notably toward China.  Like other oil-exporting countries, Angola used the natural resource as collateral for loans. Today, Angola owes $25 billion to China in oil-backed debt. Consequently, the amount of oil given to China for debt repayment has doubled since February. With the decrease in oil price and the increase of oil used for debt repayment, Angola is left with fewer resources for the development of Angola’s other productive sectors.

In other Angolan news, President Jose Eduardo dos Santos announced his plan to leave office at the end of his current term, in 2018. Dos Santos has been in power since 1979 and is Africa’s second longest-serving president (after Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo). Dos Santos has been accused of running an autocracy and committing human rights abuses. Some experts are wary over this announcement: In 2001, dos Santos announced he would not seek reelection in the following cycle, but this decision was retracted as he amended the constitution.

After terrorist attack, President Alassane Ouattara remains confident in Côte d’Ivoire’s growth and stability

On Sunday, March 13, six gunmen attacked the beach resort town of Grand Bassam in Côte d’Ivoire, killing 19 people. The beach, a UNESCO World Heritage site, is located 40km from Abidjan and is a popular tourist site. In fact, the victims hailed from around the world, including Burkina Faso, Cameroon, France, Germany, Lebanon, Macedonia, Mali, and Nigeria.

Though the country just ended a civil war in 2011, this attack was unrelated: Al-Qaida in the Islamic Maghreb has claimed responsibility, citing revenge for a French offensive against fighters in Mali and the wider Sahel region. Indeed, the country has actually been experiencing rapid growth and increased stability since the end of the war, leading many experts to believe its success may have made it an attractive target. J. Peter Pham, director of the Africa Center at the U.S.-based Atlantic Council, said, “It’s actually the stability, the democracy, and the economic growth that al-Qaida is seeking to undermine rather than necessarily exploiting tensions.”

Also, on Wednesday, the International Monetary Fund (IMF) had a positive statement on the economic outlook of Côte d’Ivoire for 2016. In an end-of-mission press release, team leader Dan Ghura noted that over the past four years in the country, “GDP growth has been robust, permitting a decline in poverty, and macroeconomic imbalances have been curtailed.” Similarly, Ivorian President Alassane Ouattara met with economic partners on Tuesday, during which he assured the U.S. Chamber of Commerce, the IMF, and the French ministers of security and foreign affairs that this attack will not significantly damage his country’s economy. It seems that their confidence in Côte d’Ivoire’s economy remains strong, with Executive Vice President of the U.S. Chamber of Commerce Myron Brilliant saying, “In no way will that [attack] deter our investments and trade relations here in Côte d’Ivoire. If anything, that will encourage us to be more fruitful and more engaged and more positive about our interactions here.”

Nigerian audit claims $16 billion in oil revenues missing from 2014

Samuel Ukura, auditor general of the Federation of Nigeria, presented an audit of the state-owned Nigerian National Petroleum Corporation (NNPC) to the National Assembly on Monday, revealing that the corporation did not pay nearly $16 billion (3.2 trillion naira) in oil revenues that it owed the federal government in 2014. The uncertainty surrounding these unaccounted for funds has renewed public concern over the institution’s long history of corruption. For instance, last year, an audit by accounting firm PricewaterhouseCoopers found that the NNPC had withheld approximately $1.5 billion from the government between January 2012 and July 2013. This month, the government announced that—in an effort to reform the notoriously opaque institution—it would break up the NNPC into several companies in order to make the units more efficient, profitable, and accountable.

The NNPC disputed the audit report’s findings, calling them “erroneous and borne out of misunderstanding of how revenues from crude oil and gas sales are remitted into the Federation Account.” The Nigerian constitution requires that the NNPC remit its oil revenues to the government, although, according to the act that founded the NNPC, the firm is allowed cover its own costs before submitting that payment. A NNPC spokesperson, Isiaka Abdulrazaq, stated that more than two-thirds of revenues were allocated to oil subsidies and costs associated with vandalism on its pipelines, leaving only about $1.6 billion (326 billion naira) unreconciled rather than the alleged $16 billion. He also criticized the auditor general for not conducting an exit meeting with the firm before finalizing the audit, which he noted is a best practice in the field of auditing.

In other news, Switzerland confirmed this week that it has already returned nearly $723 million—and will return a further $321 million in funds—to the Nigerian government that it seized from former Nigerian military ruler Sani Abacha. Abacha is estimated to have embezzled nearly $5 billion (and held $2.2 billion in European bank accounts) over his rule of the country from 1993 to 1998.