Like much of Africa, the nation of Angola has been troubled by food insecurity and economic challenges. As it looks to establish economic stability moving forward, many look to its dominant oil sector and the leaders that have reshaped it for a better tomorrow.
In 2020, Angolan President João Lourenço reappointed Diamantino Pedro Azevedo as the nation’s Minister of Mineral Resources and Petroleum and Gas. Minister Azevedo was initially appointed to the position in 2017 and over the past five years has overseen many improvements that have been made to the Angolan oil and gas sector.
He has overseen the implementation of numerous reforms as well as a re-evaluation and restructuring of the state oil company, Sonangol.
In recent years, changes and reforms have brought about improved transparency and productivity in the oil sector. Under the leadership of Minister Azevedo and President Lourenço, Sonangol’s role has been re-evaluated and transformed to one by which it can more effectively foster economic growth through oil production and exploration.
With Sebastião Gaspar Martins at the helm of Sonangol as its CEO, the company has undergone tremendous change and progress in recent years.
By prioritizing investments that will benefit the whole of the Angolan people as well as measures that uphold the value of transparency, the company has helped cement Angola as one of the world’s largest exporters of crude oil.
The Organization of Petroleum Exporting Countries’ most recent report indicated that Angola has surpassed Nigeria as the largest oil exporter in Africa, exporting roughly 1.16 million barrels of oil per day.
The prosperity of the Angolan economy is heavily dependent on its oil sector, so the continued success of Sonangal is fundamentally important to the everyday lives of Angolans.
The improvements that the company has made regarding transparency and accountability translate to the overall better well being for the nation. They have also generated some tangible international recognition for Angola.
On June 16, Angola became the 28th African nation and the 57th country in the world to join the Extractive Industries Transparency Initiative (EITI), the global standard for the good governance of oil, gas and mineral resources. EITI seeks to address key governance issues in the extractive sectors.
The ceremony in Brussels, Belgium, was attended by Angola’s Minister of Mineral resources, oil and gas, Diamantino Azevedo, who headed his country’s delegation, while Sonangol was represented at the highest level by PCA Gaspar Martins.
“Angola has the opportunity to use the implementation of the EITI to strengthen its anti-corruption efforts, strengthen Sonangol’s modernization and ensure that the extractive sector contributes to the modernization of domestic resources,” the chairperson of the EITI Board, Helen Clark, said while welcoming Angola to the body on June 16.
Angola’s Minister of Mineral resources, oil and gas, Diamantino Azevedo, responded that the implementation of the EITI “will support the government’s objectives of strengthening transparency and guarantee that the Executive assumes the political will to strengthen the national instruments of good governance.”
“With this new stage, the country intends to continuously improve the business environment and the investment climate, which will contribute to the mobilization of revenue and to obtain a direct positive impact for the Angolan citizens. Angola’s membership of the EITI means the beginning of a new era for the country,” he added.
Sonangol’s CEO, Gaspar Martins, described Angola joining EITI as a milestone.
“Sonangol, as a flagship oil company, integrated in the country’s value chain and energy sector, is pleased with the admission of Angola to the EITI, a measure that is fully aligned with its policies of transparency and efficiency in the performance of its activity,” he said. “This milestone reinforces Angola’s commitment, also assumed by the company, to responsibly manage its natural resources, in favor of the country’s development and for the benefit of its population, with an action guided by the best international practices.”
The admission of Angola into EITI was the culmination of several years of work that started in 2019 when Angola’s President João Lourenço expressed the country’s intention to join EITI, which was launched in September 2002 by the then UK Prime Minister Tony Blair, following the world summit on sustainable development in Johannesburg, after years of academic debate and lobbying by various players, including civil society organizations and companies in the oil and gas industry.
As part of its bid, Angola had formed a multi-stakeholder group that included representatives from the government, civil society and industry to oversee the process, three interest groups that are expected to work together to strengthen the extractive governance in Angola in line with national objectives.
Apart from recognition in the areas of transparency and accountability, Angola is also setting up itself for success in the production of fertilizers.
For instance, construction formally began on an industrial fertilizer complex on June 28 in Angola’s Zaire province. Made possible by a consortium formed by Sonangol through its Gas and Renewable Energy Business Unit (UNGER) and by Grupo Opaia SA, the plant is expected to produce 500 thousand tons of fertilizer per year, generating around 3,200 jobs in the construction phase and providing 1,500 jobs in the factory maintenance management stage.
Angola is also set to become a supplier of green hydrogen for renewable energy. Sonangol agreed in June to build a factory with two German engineering firms.
For years, many experts have asserted that Africa has great green energy potential. Russia’s war on Ukraine has caused many countries to re-evaluate their dependency on oil and on Russia as Germany looks to work with Angola to fulfill its green energy plans.
As Angola looks to expand its green energy production, President João Lourenço has cautioned that a transition toward a low-carbon economy should be gradual and strategic, saying at a May industry conference, “Saving the planet shouldn’t bring more hunger and misery to the people of countries that depend on oil revenues.”
Oil and gas comprise Angola’s main source of revenue, so the proper management of its oil company is essential to the nation’s economic prosperity. According to data from the World bank, Angola’s oil sector accounts for one third of its gross domestic product and roughly 95 percent of its exports.
Although Sonangol has played an important role in Angola since it was created in 1976, it has been re-adapted under the nation’s new leadership for the betterment of Angolan interests. Angola’s most lucrative sector looks to leave outdated procedures in the past and move forward to a new era of energy production and exploration.
Since Angola is so energy-dependent, the nation’s prosperity is fundamentally intertwined with the state of its oil company. Recent improvements made to the way that the government approaches the energy sector offer hope of a better future to countless Angolans.
While there are great profits to be made in Angola’s oil and gas sector, the importance of prioritizing strategic, innovative, and transparent procedures extends far beyond the generation of revenue.
“For Sonangol, generating oil richness is also an opportunity to value the human asset and open pathways to the growth of Angola,” says the oil company.
With a substantial portion of the nation’s population living in poverty, the establishment of economic stability in Angola is of incredible importance and many believe that the effective management and leadership of the nation’s oil sector could be the way forward in achieving this goal.