Chikoti's visit advances a strategic dialogue between the U.S. and Angolan governments that has been ongoing since 2009. Under the tenets of the dialogue agreement, Washington and Luanda agreed to hold regular senior-level consultations.
Washington's long-standing interest in Angola, which started before Angola's independence from Portugal in 1975, is largely tied to the country's abundant oil and natural gas resources. For its part, the ruling Popular Movement for the Liberation of Angola has consistently sought U.S. foreign investment in Angola's oil and natural gas sector. U.S. oil companies have helped Angola raise its output of crude oil to nearly 2 million barrels per day, allowing Angola to rival Nigeria as the largest oil-producing state in Sub-Saharan Africa.
Beyond energy cooperation, Chikoti will probably share Angola's views on regional security concerns in Africa. Though Angola is not active in any of the theaters, the two sides will discuss rebel activity in the eastern Democratic Republic of the Congo, the recent rebellion and government overthrow in the Central African Republic, Islamic militancy in Nigeria and French-led military operations in Mali against al Qaeda in the Islamic Maghreb.
Angola's Governance Challenges
One of Chikoti's primary tasks will likely be to address Angolan governance concerns that span economic development, inequality, corruption and dissent. Failure to address these issues may undermine U.S. support for Angola's energy sector and its security contributions. Angola has experienced significant economic growth and prosperity, especially since the consolidation of peace following the country's civil war, but the country's political elites have captured most of the newfound wealth, and its benefits have not spread to ordinary Angolans.
This has triggered protest activity, and rebels have issued threats against the Popular Movement for the Liberation of Angola-led government. Protests, restrained by fear of Angola's omnipresent security services, have been limited to crowds of only hundreds of demonstrators, but they have persisted for a few years. The Front for the Liberation of the Enclave of Cabinda carries out low-level rebel activity in the oil-producing Cabinda province, but so far it poses no strategic threat to the oil industry or the Angolan government. The rebel group Resistencia Autoctona Angolana para a Mudanca has expressed its intent to undermine the Angolan government but has demonstrated no capability to do so, and it is not clear if the group's members are still alive.
Concerns regarding corruption and inequality are difficult to address and resolve, but they do affect the decision-making processes of the U.S. government, which is wary of situations that appear to create unfair advantages for American businesses — or of any involvement of blatant corruption in business dealings. American businesses often find that in order to operate in Angola, they must partner with a local organization that then turns out to be a front for a senior Angolan government official — a practice that runs afoul of the Foreign Corrupt Practices Act, which prohibits public officials from using their offices to facilitate business arrangements that otherwise would not transpire.
Another concern is that corruption transfers Angolan public finances into private hands. Senior Angolan officials ranging from Vice President Manuel Vicente, the former chief executive officer of Sonangol, to Angolan President Jose Eduardo dos Santos' daughter, Isabel, have been accused of abusing their offices to appropriate vast wealth, and Angolan Attorney General Joao Maria de Sousa is currently under investigation in Portugal on accusations of money laundering and fraud.
Angola's Access to Western Banking Systems
Angola has already run afoul of U.S. money laundering and anti-corruption legislation. In 2010, its embassy in Washington was cut off from U.S. banking privileges. The U.S. Department of the Treasury determined that several Angolan businesses — including three controlled by then-Vice President Fernando da Piedade Dias dos Santos, also known as Nando — were used by Hezbollah agents to launder money and facilitate the transfer of financial support for their campaign against Israel. Nando — who, among other roles he has held over the years, served as Angola's prime minister from 2002 to 2008 — was denied entry to the United States in 2011 when he was supposed to lead the Angolan delegation to the U.N. General Assembly.
The fallout with U.S. banking facilities may have spurred Angola's steady acquisition of stakes in several leading Portuguese banks over the last few years. Portugal, the colonial power that formerly controlled Angola, remains a dominant trading partner with the southern African country. Portugal's economic recession has created a greater dependence on its former colony — so much so that Portuguese businesses across multiple sectors are now owned by Angolan elites, who have also invested heavily in Portuguese banks. Sonangol is now the largest shareholder in Millenium BCP and Banco Comercial Portugues, while Isabel dos Santos holds ownership stakes in Banco Portugues de Negocios and Banco Portugues de Investimento. Angolan interests also have a partnership with Portugal's Banco Espirito Santo branch in Angola. These banks may not be used as money laundering hubs, but they can legitimate the transfer of Angolan public wealth into private hands, providing Angolan officials with the means to transfer funds offshore and into private business concerns beyond the control of the Angolan public.
But Angola's access to the Portuguese banking system seems now to be facing greater scrutiny — which is a greater issue for Luanda considering the country's already reduced access to the U.S. banking system. Angola has criticized Portuguese political and business behavior over the last several weeks, specifically speaking out against Portugal's investigation of the Angolan attorney general and intimating that Angolan investment is no longer welcome in Portugal. These stances indicate that Portugal may be exercising caution and is likely resisting Angola's pursuit of Portuguese business concerns.
Aiming to reduce concerns of corruption in Angola's banking sector, the Angolan central bank was reported May 3 to have introduced new requirements of greater oversight, ownership disclosure and auditing compliance. The requirements will be phased in by the end of 2014, so they will not jeopardize business positions held by Angolan officials in the short term, leaving these officials time to adjust their business portfolios.
Chikoti travels to Washington at a time when perceptions of Angolan corruption are leading to concrete consequences for the country's political elites — including the Portuguese investigation of Angola's attorney general — but also at a time when U.S. companies are being investigated for their actions in Angola. Chikoti has likely been tasked with safeguarding Angolan interests, which in this case means securing access to Western banking systems, whether in the United States or in Portugal. Chikoti will communicate that reforms such as those announced by the Angolan central bank are being enacted, and he will try to show that Angola is making the necessary adjustments to improve governance.
