Feature/OPED
Angola’s Story of Politically Exposed Persons and Debt Traps
By Fadi A. Haddadin
In its financing attempts that brought the resource-rich country to become indefinitely indebted for a long time, the Government of Angola sought a $15 billion loan from China (one of many) last May. Just as this latest round of financing commenced, Standard and Poors downgraded Angola’s sovereign credit rating to B- due to concerns about “the rising debt service costs and weak economic prospects.”
The latest move is part of another debt trap through which the new government uses oil-backed loans at high interest rates, yet financed through opaque and unaccountable offshore structures. This comes at a time when Angola’s banking sector is weak and some important state banks are undergoing restructuring processes; posing contingent risks to government.
Manuel Vicente has remained a ruthless fixture of Angolan politics for over three decades. Today, as the “most wanted by Portuguese authorities” and an advisor to Joao Lourenco (who almost made it to the Presidency), Vicente has been at the forefront of the landmark exploitation of the resource-rich Portuguese colony since his appointment as Chairman of Angola’s state oil company, Sonangol EP. By the time he left his position in 2012, Vicente had proudly created complex, personally profitable, and self-rewarding mechanisms to leverage the nation’s resources for the profit of a small cartel, spanning well-known illustrious names in Africa and the world, ranging from organized crime to Wall Street. He purposely transformed the looting which decimated the West African nation during its brutal civil war into the merciless leveraging of state assets under the guise of ‘development’ for over sixteen years (and still ongoing).
Under the leadership of Vicente, or as one would call it, “Politically Exposed Person” (PEP), Sonangol gained an unusual degree of autonomy. In the world of financial regulation, PEP is a term describing someone who has been entrusted with a prominent public function and presents a higher risk for potential involvement in bribery and corruption by virtue of his/her position and the influence held. Vicente successfully resisted efforts of government institutions, such as the Ministry of Petroleum and the National Bank of Angola (BNA), by curbing their power and oversight functions; simply through instilling watchdogs that he would reward handsomely.
As the civil war ended in 2002, Angola’s relationships with the IMF and the World Bank had deteriorated serendipitously, with a golden opportunity that coincided with Chinese President Jiang Zemin’s initiation of his grand “Look to the West” strategy. Chinese interests in Angola were particularly attractive to Vicente (with the development of his own sphere of influence) as the offered funds had far fewer transparency requirements to traditional Western lenders. In June 2004, China Sonangol Asia Limited was formed as the first public-private consortium to turn the new geopolitical paradigm into private profits. It was registered in Hong Kong and owned entirely by Lo Fong Hung, Wi Yang, and, naturally, Manuel Vicente, unbeknownst to the then leadership. In the weeks following China Sonangol’s incorporation, Vicente and the 88 Queensway Group incorporated nine subsidiaries of China Sonangol, with Pierson Asia acting as its primary financial consultant. The firm would help Vicente and his Chinese partners to create a complex network of financial subsidiaries to extract, divert, and embezzle funds.
Vicente’s influence, along with Chinese capital, positioned these newly-created firms to dominate the finances of Angola and the majority of investments in the country through two small and nebulous companies: China International Fund Limited (responsible for US$2.9 billion in construction projects), and, China Sonangol International Holdings Limited (responsible for the energy sector—notably obtaining three oil blocks and establishing a joint venture with Sinopec for oil exploration in Angola).
The vehicles for the embezzlement of such funds are the product of an idea developed in the 1990s, known as “prime bank schemes,” through which Vicente and his son would set up pop-up corporations for the collection and transfer of assets. The same entities would be used for the purchase of more than US$300 million in U.S. treasury bills on behalf of Angola’s national bank, Banco Angolano de Investimentos (BAI)—formerly Banco Africano de Investimentos—and enjoyed absolute authority to manage major portions of BNA’s funds under the direct, repeated permissions of the then-governor of Angola’s central bank, Aguinaldo Jaime (1998-2002). Jaime, in his capacity as governor, signed a “letter of authority” informing HSBC that BNA “will supply, on behalf of the Angolan Government, a US$50 million treasury bill to be used as a collateral by MSA Inc” to raise funds for Angolan ‘development projects.’ Another example of the prime bank scheme was the creation of the sister bank, HSBC Equator Bank plc in 2006—nothing to do with the HSBC that we all know—which earned in excess of US$80 million from revolving short-term trade finance lines, serviced by an assignment of oil proceeds afforded through a nebulous relationship with BAI.
The central paradox for the people of Angola is the calculus of BAI in taking on such unfavourable terms and failing to execute its fiduciary duty. This paradox is resolved when we consider the true nature and ownership of BAI, which is in fact a private bank. As per a U.S. Senate Committee investigation, in March 16, 2006, HSBC received a list of BAI’s shareholders, which included three private corporations, each of which would turn out to be a special purpose shell corporation: Arcinella Assets, Sforza Properties, and Dabas Management. BAI currently has assets with a total value of over US$7.6 billion which alerted and instigated the investigation. And following the implementation of the Patriot Act, HSBC expended its efforts to determine the true owners of BAI. The subsequent disclosure, under the PEP/anti-money laundering (AML) protection, revealed that the beneficial owner of Dabas Management is Jose Paiva (former board director of Sonangol) and the beneficial owner of the shell company, called ABL, is Manuel Vicente (PEP from 1999-2012). Today, each personally owns 5% of BAI through these special purpose corporations.
Angola continued to have weak AML controls and an ongoing corruption problem. The above history shows how an Angolan PEP (like Manuel Vicente), an Angolan government official (like Aguinaldo Jaime), and an Angolan financial institution (like BAI) have used global banks to gain access to the financial system, often bypassing AML and PEP safeguards. It shows how politically powerful officials, their relatives, and close associates (referred to in international agreements as PEPs) can use the services of global professionals and financial institutions to bring large amounts of suspect funds into different jurisdictions to advance their interests. It also clarifies the need for strengthening PEP controls to prevent such corrupt figures from concealing, protecting, and utilizing their ill-gotten gains; corroding the rule of law, national economic development, and democratic principles. U.S. and EU institutions should consult with foreign officials, international organizations, financial regulators, and experts in AML and anti-corruption efforts in order to expose some of the tactics being used by PEPs and their facilitators.
By Luke Kyohere
The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:
1. The rise of real-time payments
Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. We are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this.
2. Cashless payments will increase
In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions.
3. Digital currency will hit mainstream
In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use blockchain.
The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability.
4. Increased government oversight
As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.
5. Business leaders buy into AI technology
In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI, so many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk.
6. Continued AI Adoption in Payments
In payments, the proliferation of AI will continue to improve user experience and increase security. To detect fraud, AI is used to track patterns and payment flows in real-time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent.
When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payment platforms.
7. Rise of Super Apps
To get more from their platforms, mobile network operators are building comprehensive service platforms, integrating multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills.
8. Business strategy shift
Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble.
As the payments space evolves, businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.
Luke Kyohere is the Group Chief Product and Innovation Officer at Onafriq
In a heartfelt statement released today, the Conference of Nigeria Political Parties (CNPP) has extended its warmest congratulations to Ghana’s President-Elect, emphasizing the importance of learning from Ghana’s recent electoral success as Nigeria gears up for its 2027 general elections.
In a statement signed by its Deputy National Publicity Secretary, Comrade James Ezema, the CNPP highlighted the need for Nigeria to reclaim its status as a leader in democratic governance in Africa.
“The recent victory of Ghana’s President-Elect is a testament to the maturity and resilience of Ghana’s democracy,” the CNPP stated. “As we celebrate this achievement, we must reflect on the lessons that Nigeria can learn from our West African neighbour.”
The CNPP’s message underscored the significance of free, fair, and credible elections, a standard that Ghana has set and one that Nigeria has previously achieved under former President Goodluck Jonathan in 2015. “It is high time for Nigeria to reclaim its position as a beacon of democracy in Africa,” the CNPP asserted, calling for a renewed commitment to the electoral process.
Central to CNPP’s message is the insistence that “the will of the people must be supreme in Nigeria’s electoral processes.” The umbrella body of all registered political parties and political associations in Nigeria CNPP emphasized the necessity of an electoral system that genuinely reflects the wishes of the Nigerian populace. “We must strive to create an environment where elections are free from manipulation, violence, and intimidation,” the CNPP urged, calling on the Independent National Electoral Commission (INEC) to take decisive action to ensure the integrity of the electoral process.
The CNPP also expressed concern over premature declarations regarding the 2027 elections, stating, “It is disheartening to note that some individuals are already announcing that there is no vacancy in Aso Rock in 2027. This kind of statement not only undermines the democratic principles that our nation holds dear but also distracts from the pressing need for the current administration to earn the trust of the electorate.”
The CNPP viewed the upcoming elections as a pivotal moment for Nigeria. “The 2027 general elections present a unique opportunity for Nigeria to reclaim its position as a leader in democratic governance in Africa,” it remarked. The body called on all stakeholders — including the executive, legislature, judiciary, the Independent National Electoral Commission (INEC), and civil society organisations — to collaborate in ensuring that elections are transparent, credible, and reflective of the will of the Nigerian people.
As the most populous African country prepares for the 2027 elections, the CNPP urged all Nigerians to remain vigilant and committed to democratic principles. “We must work together to ensure that our elections are free from violence, intimidation, and manipulation,” the statement stated, reaffirming the CNPP’s commitment to promoting a peaceful and credible electoral process.
In conclusion, the CNPP congratulated the President-Elect of Ghana and the Ghanaian people on their remarkable achievements.
“We look forward to learning from their experience and working together to strengthen democracy in our region,” the CNPP concluded.
By Kenechukwu Aguolu
The proposed tax reform, involving four tax bills introduced by the Federal Government, has received significant criticism. Notably, it was rejected by the Governors’ Forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive. This article highlights the purposes of taxation, the qualities of a good tax system, and some of the implications of the proposed tax reforms.
One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.
A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.
In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.
The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.
The proposed tax reforms by the Federal Government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions should be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.
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