Business Corruption

Awarding concessions and contracts in the oil sector follows an opaque pattern, with government officials holding considerable discretionary powers in the awarding of contracts and with the state-owned oil giant Sonangol's mandate to approve all major procurement contracts in the oil sector. Although laws regulating the procurement process exist, they are inadequately enforced and procurement officials often demand bribes or take kickbacks when awarding contracts. For example, according to the US Department of State 2010, there were credible reports of high-level officials receiving substantial kickbacks from private companies awarded government contracts in 2010. This is confirmed by the World Bank & IFC Enterprise Surveys 2010 in which a significant number of companies report that they expect to give gifts in order to secure government contracts, with the average gift amounting to a colossal 10% of the contract value. 

According to the Chr. Michelsen Institute 2007, there are several problems related to procurement in Angola, including weaknesses in the legal framework and lack of enforcement, inefficiency and costly procedures, as well as weak audit and anti-corruption mechanisms. According to Freedom House 2007, awarding of contracts financed by foreign assistance has been non-transparent, especially at the sub-contractors' level.

Companies are recommended to use a specialised public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement in Angola.

For more information on public procurement in Angola, see 'Public Anti-Corruption Initiatives' in the Initiatives section.

Political Corruption

Corruption is widespread in public procurement and functional control mechanisms are absent in most ministries and levels of government. According to the US Department of State 2009, there is a lack of transparency in the government's procurement, and media sources have reported on an incidence where government officials allegedly received bribes in exchange for accepting large housing project contracts to build one million homes. Government ministers and other high level officials often own interests in companies regulated by their respective ministries, as there are no laws regulating conflict of interest. Public officials in charge of awarding contracts work within a highly politicised public administration and receive little training in public procurement functions. According to Global Integrity 2010, Angolan procurement law presents some serious flaws, as it does not address procurement officials' conflict of interests, nor does it provide for a system to scrutinise their assets. Moreover, no debarment system exists for companies found guilty of misfeasance in the procurement process.

For more information on public procurement in Angola, see 'Public Anti-Corruption Initiatives' in the Initiatives section.

Frequency

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 2.0 on a 7-point scale (1 'very common' and 7 'never occurs').

- Business executives give the favouritism of government officials when deciding upon policies and contracts a score of 1.9 on a 7-point scale (1 'always show favouritism' and 7 'never show favouritism').

The World Bank & IFC: Enterprise Surveys 2010:
- 58.5% of the companies surveyed expect to give gifts to secure a government contract

- The average value of a gift expected to secure government contract as reported by the companies surveyed is 9.8% of the contract. This is three times higher than the Sub-Saharan average.