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Oil Revenue Produces Limited Benefits for Cabindans

Cabinda provides some 50 percent of Angola’s oil revenues, thanks to the large oil fields off its coastline.²¹ Cabinda receives a bonus payment from the central government in recognition of its contribution to the national economy, which is calculated on year-to-year increases in petroleum revenue. In the 2004-5, the bonus was calculated to amount U.S. $25 million, and is expected to increase to U.S. $35 million in the following financial year.²² In addition to this payment, Cabinda has received a share of the social investment programs that the multinational petroleum companies working in Angola are contractually bound to deliver. Cabindans however, complained to Human Rights Watch that they see few tangible benefits of the oil or of the multinationals’ social investment programs. The petroleum industry offers few employment opportunities relative to the wealth that it produces, and no significant attempts have been made to develop secondary industry in Cabinda on the basis of oil extraction. Angola’s only oil refinery is in Luanda, and fuel for vehicles in Cabinda has to be brought from Luanda. Frequent fuel shortages are a source of discontentment among Cabindans. The cost of living in Cabinda is also among the highest in Angola, as imports into the province have either to be flown in from Luanda or trucked cross the border from the DRC and the Republic of Congo.

Angola’s state revenues are centrally managed, with all revenues collected by Luanda before being allocated to the provinces. It is, however, not clear how government revenues in the province are disbursed; officials in the Ministério da Assistência e da ReinserçÃo Social (MINARS – Ministry of Assistance and Social Reintegration) were unable to say precisely what their operating budget was for the current financial year, since they work on a project-by-project basis.²³

In addition, oil companies make direct payments to the provincial government of Cabinda (and Zaire) out of their Petroleum Income Tax. The central government generally, and Ministry of Finance in particular do not exercise control over those funds. In 2000, that deduction was approximately $72 million for Cabinda and $149 million total for both Cabinda and Zaire provinces. This means that about $6 million/month flowed to the provincial government and sometimes more depending on the price of oil.²⁴  As a result, tens of millions of dollars are available to the provincial government that is not overseen by the federal government, or at least the Ministry of Finance. These funds, along with other payments and projects and the flow of funds from companies to the provincial government generally need much greater scrutiny, accountability and transparency.