Angola

Isabel dos Santos, 43,is Africa’s wealthiest woman who’s worth $3.2 billion, according to the Bloomberg Billionaires index.

Angolan President Jose Eduardo dos Santos tightened his family’s grip on sub-Saharan Africa’s third-biggest economy two years before he has indicated he’ll leave office by naming his billionaire daughter Isabel as chairwoman of the state oil company.

The appointment “shows that President dos Santos doesn’t trust anyone else and moreover that he’s looking to have a dynastic succession,” Markus Weimer, an analyst for Horizon Client Access Inc., an energy investment advisory group, said Friday by phone from London. “It’s a very strong indication that Isabel will also be considered a possible leader when he retires in 2018.”

The Russian-educated dos Santos, Africa’s second-longest serving president, has said he will quit “active politics” in 2018 after leading the country since 1979. His son Jose Filomeno dos Santos already runs Angola’s $5 billion sovereign wealth fund. — The Russian-educated dos Santos, Africa’s second-longest serving president, has said he will quit “active politics” in 2018 after leading the country since 1979.

Angola ranked 163 out of 167 countries in Transparency International’s 2015 Corruption Perceptions Index and had the world’s highest rate of child mortality under the age of 5, the United Nations Children’s Fund said last year.

The decision to fire Sonangol’s entire board is part of a restructuring plan that will create two new entities — one that will award concessions and serve as a regulator, and another, under the president’s direct authority, that will run its business interests. The company now owns dozens of stakes in oil blocks in Angola as well as an airline, real estate, multi-billion dollar housing projects, industrial zones, and shares in a bank in Portugal.

Isabel dos Santos, 43, is one of her father’s most trusted advisers and has been leading talks about a shakeup at Sonangol, according to David Thomson, an analyst for Edinburgh-based Wood Mackenzie Ltd. Africa’s wealthiest woman who’s worth $3.2 billion, according to the Bloomberg Billionaires index, she controls Angola’s largest mobile-phone operator, Unitel, and owns stakes in a range of companies in Angola and Portugal.

‘Intimate Knowledge’

“She has been at the helm of the efforts to restructure Sonangol over the past year or so and as such will have an intimate knowledge of the company,” Thomson said in e-mailed comments. “She has good business experience and is respected within the oil industry.”

The new team aims to make Sonangol more competitive internationally by reducing costs, Isabel dos Santos said in an e-mailed statement. The company will seek to improve profitability and the dividends it pays to the state, she said. Angola vies with Nigeria as Africa’s biggest oil producer.

Isabel dos Santos started her career with the opening of a club called Miami Beach in the capital, Luanda, after obtaining an engineering degree at King’s College London in the early 1990s, said Filipe Fernandes, author of a book entitled Isabel dos Santos — Secrets and The Power of Money.

“She has used her strong business position in Angola, where many Portuguese companies are present, as a springboard for bigger deals,” he said.

Political Implications

The reforms at Sonangol will have considerable political implications, according to Stratfor, an Austin, Texas-based intelligence consultancy.

“The proposed overhaul is intended to break down the potential blocks of power forming within Sonangol and place the company squarely under dos Santos’s control,” Stratfor said in a June 1 report. “By splitting up the company, the president hopes to safeguard the interests of his family.”

Foreign advisers including the World Bank recommended for more than a decade that Angola reduce the size and scope of the company.

“Isabel’s appointment demonstrates the strategic importance of these reforms for the presidency and that the president wanted someone he fully trusted to lead the reforms,” Alex Vines, head of the Africa Program at the Chatham House research group in London, said in e-mailed comments.

The 54 percent decline in the price of Brent crude in the past two years has put Angola under pressure to reduce its dependence on oil, which accounts for more than 90 percent of its exports. Economic growth will probably slow to 2.5 percent this year from an estimated 3 percent last year and 6.8 percent in 2013, according to the International Monetary Fund, which is in talks with Angola to provide financial assistance.

“It’s just how the Angolan government tends to operate when it comes to base issues like strategic oil and the sovereign wealth fund,” Gary van Staden, an analyst at NKC African Economics in Paarl, near Cape Town, said by phone. “President dos Santos tends to make sure that the people in charge of those are very close to him.”

Growth in Africa has outpaced most emerging markets in recent years, but that’s changing fast as a slew of problems beset its leading economies. Here’s what you need to know about sub-Saharan Africa’s big four:

SOUTH AFRICA

The prospects for Africa’s most advanced economy are not looking good. The country is set to grow by just 0.6% this year, according to the International Monetary Fund. It’s one of the slowest growing countries in one of the world’s fastest growing territories.

The rand plummeted 30% last year, and not just because of an emerging market sell-off. Political turmoil has also had a big impact.

Just this month, South African President Jacob Zuma survived impeachment despite the highest court in the land finding him guilty of breaching the constitution over how public money was spent renovating his home. Well known figures from the anti-apartheid struggle are now calling for Zuma to step down.

Chaos in government isn’t helping either. Zuma stunned investors by replacing Finance Minister Nhlanhla Nene with a little known politician. The president then backtracked and asked Nene’s predecessor Pravin Gordhan to take the position in order to stop the rand’s freefall.

The rand has steadied this year, rallying by about 7%. It’s been helped by a broader rally in markets driven by rising commodity prices. As a platinum, gold and coal producer, South Africa is sensitive to shifts in the commodity cycle.

But the country is not out of the woods yet. It’s on the brink of a ratings downgrade that would plunge its sovereign debt into junk status.

Still, investors are showing some renewed confidence, buying up $1.86 billion worth of bonds so far in 2016 — the best start to a year since 2010.

NIGERIA

Africa’s largest economy is buckling under the low oil price. Nigeria relies on oil for 70% of government revenue and accounts for 90% of export revenue. That leaves very little room to adjust the country’s budget. For an emerging market that can only mean one thing — slower growth. The West African nation is expected to clock in growth of 2.3%, the lowest rate in 15 years, according to the IMF. Its facing a shortfall of $11 billion in its 2016 budget.

Discussions between Nigeria and the World Bank are continuing on a possible loan or credit facility that would be tied to policy reforms. It has drawn down its currency reserves and implemented capital controls, making access to dollars very difficult. In an economy that relies on imports, the controls have made life difficult for companies and two South African businesses have already pulled out.

Index compiler MSCI is considering removing Nigeria from its frontier market index because the restrictions have made it harder for investors to repatriate money. To make matters worse, the country is facing a fuel crisis. Despite being Africa’s largest oil producer, it has never had enough refining capacity, and the scarcity of dollars is making it harder for importers to bring gas into the country. The war against Al-Qaeda linked terror group Boko Haram, which the government has vowed to eradicate, is placing further strain on the country’s finances.

ANGOLA

What was once one of Africa’s fastest growing economies is now on its knees and asking for help from the IMF. Angola is Africa’s second largest oil producer and relies on oil for 95% of government revenue.

After debuting on the international debt market last year, the country appears unable to meet its budget and debt obligations. It has requested assistance from the IMF in the form of monetary support. Angola is also bound to money-for-oil deals with China. It has used oil as collateral for loans from China, and that is further squeezing state finances. The country is set to grow by 3.5% this year, down from 6.8% in 2013, according to the IMF.

KENYA

Kenya’s economy is more resilient and diversified but there’s trouble brewing in its banking sector. Three banks are being wound down by the central bank. Two of the banks failed last year, and a third was forced into the arms of the lender of last resort this month. A fourth bank is being investigated, and analysts believe consolidation in the industry is inevitable.

The East African nation has 43 banks, most of which have overstated profits and are buckling under the weight of non-performing loans and a big fall in deposits. A dozen banks may end up under central bank control as it tries to clean up the sector. All this is weighing on Kenya’s growth prospects: The IMF has just cut its forecast to 6% for 2016, down from 6.8% previously.

Africa’s top 4 economies are in trouble

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