Nobody does it worse

Angola provides the perfect mix of oil wealth, poverty and corruption

Sergio Valdez patrols the notoriously dodgy streets of downtown Johannesburg late at night. Locals snarl at him, "Go home, makwerekwere" - an insulting term for foreigners from elsewhere in Africa. Valdez does stints in security jobs. South African companies see his military experience, picked up in Angola's 27-year civil war, as an asset.

Valdez's home country, Angola, is sub-Saharan Africa's second-largest oil exporter. In Luanda, the capital, Texans mix with Chinese, Indians and South Africans. Middle Eastern businessmen in colourful robes jostle with fashionable locals in new luxury beachside bars. Angola has one of the highest growth rates on the continent. Last year, oil revenues doubled to $10bn. But precious little of the oil wealth trickles down to its 13.6 million people, most of whom eke out a precarious existence on less than $2 a day. Roughly five million people have been displaced.

The soil in Angola is fertile, but littered with booby traps. It is said that there is one landmine planted for every Angolan. A stone's throw from the new wealthy suburbs, millions live in slums, amid garbage piled high in potholed streets. Jobless young men loiter listlessly, while ragged children play in stagnant pools near open sewers.

Angola is one of the most glaring examples of countries where abundant commodities such as oil have combined with corruption and bad governance. Around a quarter of Angola's state income goes missing each year. The government does not declare oil revenues in its budget. The result is that money much needed for tackling poverty ends up in leaders' foreign bank accounts. The oil riches act as a deterrent for international watchdogs and African peers to apply pressure. There seems little political will among members of the G8 countries to scrutinise or seize African leaders' ill-gotten loot.

Angola is also suffering the after-effects of neoliberal policies applied by international lenders in the 1980s and 1990s - cuts in social welfare and subsidies to the poor and a new reliance on large-scale privatisation. Over-prescriptive western donors remain part of the problem in many places. If a country receives most of its funds from outside donors, will its leaders be accountable to the electorate or the donor?

China's scramble for the continent's commodities is a mixed blessing. Late last year Li Changchun, propaganda chief of the Chinese Communist Party, told a closed meeting of African leaders that China and Africa have become "friends of all-weather types". In other words, a regime's terrible human-rights record won't stand in the way of a deal.

Most of the aid from China to Angola is channelled through the office of President Eduardo dos Santos; it includes a $2bn soft loan in exchange for 10,000 barrels of oil a day. This has helped to ensure that local benefactors of dos Santos's patronage retain a stake in keeping their leader in power. Many African ruling parties, such as Angola's MPLA, are actively involved in the private sector. Isabel dos Santos, the president's daughter, has acquired wide-ranging interests in telecoms, diamonds and banking.

Dos Santos has been in power since 1979 and is predictably mum about his retirement plans. The last proper election was 14 years ago. Nobody is sure whether elections originally planned for last year will take place this year as promised. When the MPLA's general secretary, Lopo do Nascimento, challenged the president's grip on the party, he was fired. Not that the opposition would benefit. There are close to a hundred parties, with few obvious ideological differences, but all stubbornly refusing to join forces to stop the MPLA juggernaut.

There are signs of progress. Local civic groups are beginning to develop, the press is becoming more critical, and some ruling-party members are demanding more accountability from their bosses. But change is painfully slow. Many who fled the civil war have, under a UN initiative, returned to their troubled country. Valdez prefers to stay put in South Africa. It is little wonder.

William Gumede's book, "Thabo Mbeki and the Battle for the Soul of the ANC", will be published in the UK early next year