A World Bank report on Angolan public finances, published in February, once again uncovers the serious management problems and malpractices that have affected the Angolan Sovereign Wealth Fund (FSDEA) since its creation. If the management had adopted a conservative strategy, with the use of financial investments in the main international stock market indices, the World Bank assures, the capitalization of the FSDEA would have risen from 5,000 million USD (the initial allocation) to 6,500 million USD. Since 2012, the FSDEA has been decapitalized by about 2,900 million USD.
As a reference, the World Bank uses the S&P 500 index (which groups the largest assets listed on the New York Stock Exchange) to recall that the USD 5,000 million allocated to the FSDEA would have reached USD 6,500 million in June 2022, even “after replicating the fund withdrawals that occurred in 2019 and 2020”.
“This represents an increase of 31% compared to the original allocation and about three times the actual balance of the FSDEA of June 2022”, recall the authors of the report, who also assure that “it is not surprising that the fund underperforms the benchmarks”. In December 2022, according to the FSDEA’s annual report, audited by Ernst & Young (EY), the fund was already worth only about USD 2,100 million, that is, USD 2,900 million less than in 2012.
Another significant fact, especially when considering the vision and objectives that gave rise to the FSDEA, is that since 2016, the first publicly available audited year, the institution has accumulated losses of USD 269 million.
For Neto Costa, economist and former Minister of Economy and Planning between July 2019 and January 2020, the amounts that have been used to finance the PIIM “were mobilized by the owner of the fund [State], corresponding to a divestment”. “On the other hand, the actual net losses, at least until 2017 – when the management seemed more like a “crony business” – will correspond, fundamentally, to the remuneration paid to the then manager, net of earnings, plus operating costs”, he explains.
According to the FSDEA’s annual report and accounts for 2022, the institution incorporated a total of 74 companies (all practically unknown and with no visible economic activity), meanwhile grouped in the FSDEA International Holding PCC entity. As of 31 December 2022, 31 liquidation proceedings have been filed in Mauritius (15 have already been completed).
A total of 17 liquidation proceedings have also been set up in Angola (only two have been completed – Kijinga and Ulussu), according to information published by the FSDEA. It is suspected that this operational format, with the creation of numerous entities linked to each other, functioned as a vehicle for money laundering and corruption.
The now-defunct Kijinga and Ulussu companies are a concrete example of the diffuse practices and the way in which assets were managed by the FSDEA. Denounced by the Maka Angola portal in 2015, these entities received direct transfers from the FSDEA totaling USD 100 million, despite not having relevant economic activity.
At the time, in response to the high suspicions and allegations of corruption published by Maka Angola, the president of Quantum Global, the only manager of the fund’s assets at the time, Jean-Claude Bastos de Morais, said laconically, in a statement, that “the Kijinga company does not aim to provide services, but is focused on the creation of companies in the start-up phase for micro-businesses of Angolan entrepreneurs”.
Source: Angola24Horas