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FACTBOX-Political risks to watch in Angola

Source: Thomson Reuters Foundation - Mon, 11 Mar 2013 10:35 GMT
Author: Reuters
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By Shrikesh Laxmidas

March 11 (Reuters) - Angolan President Jose Eduardo dos Santos and his MPLA party have passed a budget with a steep rise in spending which they say will improve public services and allow Africa's No. 2 oil producer to keep posting rapid growth.

The MPLA won 72 percent of the vote in an election in August last year, but the poll was criticised as not credible and one-sided by political opponents and civil society activists.

Dos Santos has been in power for 33 years and speculation about his plans remains rife. The swearing in of Manuel Vicente - former head of state oil firm Sonangol - as vice-president was seen as a sign he was being groomed as a successor.

The economy is expected to grow by 7.1 percent this year, extending a rebound started in 2012 thanks to strong oil prices and a recovery in crude production after technical problems.

Analysts say they will be tracking the government's delivery on promises to tackle corruption, diversify the economy and improve access to jobs and public services such as health and education.

DOS SANTOS SUCCESSION PLANS

Dos Santos's promotion of Vicente to vice-president fuelled speculation that he was looking to hand over power. The president has, however, never referred to his political plans in public and the presidential succession remains the biggest question hanging over Angola's future.

Vicente is respected for his leadership at Sonangol, but analysts say he is a newcomer to politics and has yet to persuade senior MPLA figures and many ordinary Angolans that he is the best choice to succeed Dos Santos.

What to watch:

- Comments by Dos Santos, Vicente on plans

CLAMOUR FOR BETTER WEALTH DISTRIBUTION

The MPLA has pledged to ensure a better distribution of Angola's riches. Election campaigns focused on an anti-poverty drive and equal access to jobs, energy, water and education.

The government has earmarked a third of its spending for this year for education, health and welfare services, but opponents criticised spending on defence and security, which they say remains too high a decade after the end of a civil war.

What to watch:

- Government implementation of distribution policies

SIGNS OF DISSATISFACTION

The election, only the third since independence from Portugal in 1975, took place peacefully. But analysts say a 10-percentage-point drop in MPLA support and abstention of nearly 40 percent of Angolans may signal dissatisfaction with policies.

The run-up to the vote was marked by several protests organised by a youth movement urging Dos Santos to resign, and by civil war veterans demanding payment of overdue pensions. The protests were small, but led to authorities using guns and teargas to disperse them.

What to watch:

- Plans for more demonstrations and government reaction

CORRUPTION

Dos Santos's government has long been accused of mismanaging oil revenues, avoiding public scrutiny and doing too little to fight graft. Transparency International ranks Angola among the most corrupt countries in the world.

The appointment of Jose Filomeno dos Santos, one of the president's sons, to the board of a new ${esc.dollar}5 billion sovereign wealth fund in October attracted renewed criticism.

What to watch:

- Sovereign wealth fund's first investments, reporting

ECONOMIC GROWTH, DIVERSIFICATION

Increased oil output helped the economy grow by 7.4 percent in 2012 and is expected to lead to growth of 7.1 percent this year if operators can avoid a repeat of the technical problems seen in 2011.

Economists say a crucial task for the government is to diversify the economy by investing in sectors such as agriculture and mining to reduce dependence on oil revenues.

What to watch:

- Oil output growth, support for non-oil sectors (Editing by Angus MacSwan)

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