Angola Missing $1 Billion

October 28, 2002

Angola Missing $1 Billion

An internal report by the International Monetary Fund found nearly $1 billion disappeared from Angolan government finances last year, reports the British Broadcasting Corp. The sum is far greater than the value of humanitarian assistance sent to the country this year. The report adds that over the past five yearsmore than $4 billion are unaccounted for.

Angola denied the accusations. Angola has been accused of corruption in the past, but this is the first time financial mismanagement on such a scale has been reported by an institution with IMF's status. IMF's stark assessment of the Angolan government's finances are revealed in a report circulated earlier this year within the organization, and obtained by the BBC.

The report says that last year alone, more than $900 million went missing. The document notes there has been little progress in the areas of governance and fiscal transparency in Angola, despite encouragement and assistance from IMF. It does not mention where the missing money has gone, but its overview of the political and economic situation in the country speaks of "extensive corruption" as one of the challenges faced by the government. A lack of useful data made the monitoring of Angola's fiscal situation difficult. A source suggested that the figures mentioned in the report might err on the side of caution.

A spokesman for the Angolan Finance Ministry, Bestos de Almeida, says the government studied the report but denied the discrepancy of billions of dollars in public accounts. The IMF representative in Angola, Carlos Leite, says he can't comment on the report, since it's an internal document and the government blocked its publication.

Diplomats say at least some of the discrepancy identified by the IMF may be due to bad accounting practices on the side of the government. But they say certain individuals may have taken of advantage of the smokescreen provided by slack financial management to divert funds into their own bank accounts.

In related Angola news, Dow Jones newswires reports the United Nations Security Council ended a travel ban on Angola's UNITA rebels and authorized an assessment of the political situation in the country so it could review and possibly lift other sanctions against the rebels. The Security Council welcomed the steps taken by Angola and UNITA toward fully implementing the 1994 Lusaka peace agreement – which had been repeatedly broken – and the April 4 cease-fire. But it noted "continued challenges to the stability of Angola."

Trying to force UNITA to end the war, the U.N. imposed a ban on rebel diamond exports helping to finance the conflict, an arms and fuel embargo and the travel ban. The council extended the mandate of a panel monitoring the effectiveness of sanctions for two months, until Dec. 19, to consult UNITA and government representatives to assess the current situation and possible violations of sanctions since April 4.

It also authorized the panel to provide details on UNITA funds and financial resources frozen under existing sanctions. The Security Council said it wants the assessment as part of "a full review by the council of the measures imposed against UNITA once the peace process has been completed" with a view "to the possible lifting of all the measures."

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