Oil rich but dirt poor

On the back of record oil prices, Africa's second largest producer, Angola, has one of the continent's fastest growing economies while its people remain among the poorest. After 27 years of civil war a peace agreement signed with UNITA rebels in 2002 is slowly beginning to translate into a better life for ordinary Angolans, who increasingly blame the government for the delay in turning the oil revenue into much-needed development. Elections are expected in 2007, the first since 1992. “The government wants to demonstrate the benefits of peace, and with elections coming up there is a now a major incentive to deliver the peace dividend to the people,” said Allan Cain, Director of Development Workshop, a pro-poor Angolan NGO. Jose de Oliveria, executive editor of Revista Energia, a publication that monitors the country's energy sector, puts yearly government oil revenues at between US $4 billion and $5 billion. Angola finalised its Poverty Reduction Strategy Paper, a policy document drawn up by the governments together with development partners, in November 2005 and “it seems like pro-poor strategies aimed at poverty alleviation, education and community rebuilding are on the agenda and are actually making it into government medium term planning,” Cain remarked. But NGOs and civil society are worried that the administration lacks the capacity to design, implement and manage the grassroots programmes needed to effectively tackle poverty. “The government will opt instead for large, high-cost infrastructure projects, such as roads and telecommunication, since those projects can absorb that money easily,” said Cain. Angolan oil production is currently running at 1.3 million barrels a day and several huge deep-water finds are set to further boost output. However, little of the economic activity generated by the oil industry is experienced by ordinary citizens. "Nearly all of Angola's production is offshore and for every million invested in the industry, only $100,000 is spent onshore," Oliveira estimated. According to Cain, international oil companies themselves are “increasingly concerned for poverty reduction in Angola to reduce the risk of conflict, but there is not much they can do to pressure the government” into addressing the country's development challenges more effectively.