After decades of civil war, Angola sought to rebuild its shattered infrastructure with the help of Chinese loans, trading oil for much-needed development projects.
This arrangement saw rapid growth, with new roads and hospitals springing up, but it also left Angola heavily dependent on fluctuating oil prices.
In this episode, we'll ask ourselves whether these deals were a blessing or a curse...
[00:00:05] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today is part three of our three-part mini-series on “power struggles in post-colonial Africa”.
[00:00:29] In case you missed them, in part one, we talked about Mobutu Sese Seko, the fiery Congolese leader who ruled the country for more than three decades.
[00:00:40] In part two, we talked about the time that the son of a British Prime Minister and an ex-Etonian mercenary teamed up to launch a coup in Equatorial Guinea.
[00:00:51] And in today’s episode, part three, we are going to explore what’s known as the Angolan Model, how China has reshaped the rules of the game in post-colonial Africa, trading infrastructure projects for natural resources.
[00:01:06] It’s a fascinating story involving billions of dollars, geopolitics, and the debate about whether China is a partner in African development or a neo-colonial power in disguise.
[00:01:19] So, let’s not waste a minute and get right into it.
[00:01:26] Even the most amateur student of history will know that wars, in general, end up being pretty bad news for everyone involved.
[00:01:36] And from world wars to regional struggles, there have been some horrific wars indeed.
[00:01:42] So, when a United Nations special envoy describes a war as “the worst war in the world”, well, it is something worth paying attention to.
[00:01:55] This war was the Angolan Civil War, which went on in various phases from 1975 right the way through to 2002.
[00:02:07] It started out as a proxy war as part of the Cold War, with the Soviet Union supporting one side, and the United States and a mixture of other Western powers supporting the anti-government rebels.
[00:02:21] Of course, this is somewhat of a simplification; there were all sorts of different interest groups, and the nature of the conflict changed as it dragged on for almost forty years.
[00:02:33] But, in 2002, the conflict was over, and the country was in tatters.
[00:02:41] The total number of dead is unclear, with most estimates putting it at somewhere between 500,000 and a million, while more than 4 million people were displaced, ⅓ of the entire population at the time.
[00:02:58] According to a UN report, 80% of Angolans lacked access to basic medical care, 60% had no access to water, and 30% of Angolan children would die before the age of five.
[00:03:15] Yet, just 10 years later, the tide had changed.
[00:03:20] GDP per capita had increased by more than 5 times, making it, on the surface, one of the wealthiest countries in Africa.
[00:03:29] And fast-forwarding another 10 years to today, well, things are no longer so rosy for Angola, but we’ll come to that in a minute.
[00:03:40] First, let me give you a very brief reminder about Angola and some Angolan history.
[00:03:47] It’s a large country on the west coast of Africa. If you imagine South Africa at the bottom, then going up on the west side of the continent, you have Namibia, and then you hit Angola.
[00:04:01] It was a Portuguese colony from 1575 until 1974, and was used as a major slave trading port, sending slaves across the Atlantic, mainly to Brazil.
[00:04:15] Grim stuff, of course, but we aren’t talking about that bit of Angolan history.
[00:04:21] We’re talking about what happened after the civil war ended, in 2002.
[00:04:28] The country was on its knees.
[00:04:31] It had been ruled by a man called José Eduardo dos Santos since 1979, so throughout the civil war, but like a few other characters we’ve come across in this mini-series, he was deeply corrupt and amassed a huge personal fortune while his people lived in poverty.
[00:04:52] Dos Santos knew that the country was in dire need of being rebuilt: schools, roads, railways, airports, all of the basic infrastructure that had either been destroyed in the civil war or never been built in the first place.
[00:05:10] But there was no money to do this.
[00:05:14] The World Bank or the IMF were places where countries could ask for development finance, and they were typically happy to provide these kinds of loans. But they came with strings attached, there were certain requirements for what a country had to do in order to qualify for these kinds of loans.
[00:05:36] Typically, this meant increasing transparency, allowing more political opposition, and putting into place anti-corruption measures, all stuff that World Bank and IMF economists required any country to do in order to qualify for a loan.
[00:05:55] And for most of the late 20th century, for countries that desperately needed development finance, this was the only option.
[00:06:05] Take it or leave it.
[00:06:08] But in the early 21st century, this started to not be the only game in town.
[00:06:17] On the other side of the world, the Chinese economy was growing at breakneck speed.
[00:06:23] China doesn’t have particularly large oil reserves, especially compared to its population and its energy needs, and since 1993, it has been a net importer of oil, buying oil from all over the world to meet its needs.
[00:06:41] China had plenty of US dollars, given its increasing exports to the United States. So Chinese policymakers proposed a solution.
[00:06:52] China would lend Angola the money it needed to rebuild the country, at fair, even below-market interest rates.
[00:07:01] And it wouldn’t ask questions about making steps towards democracy or anti-corruption. China was not going to interfere in the domestic affairs of another country.
[00:07:13] But, it did want something in return.
[00:07:18] Oil.
[00:07:19] See, Angola has vast oil reserves - an estimated 9 billion barrels worth.
[00:07:27] The deal would be structured broadly as follows: China would give Angola the money it so desperately needed, and in return, Angola would be required to sell China a certain number of barrels of oil every month.
[00:07:44] The money was to be spent on certain pre-agreed-upon infrastructure projects, like roads, hospitals, and housing, and there was typically a condition that a certain percentage of the work would need to be carried out by Chinese companies.
[00:08:02] For China, it looked to be a pretty good deal.
[00:08:06] It was securing a source of future oil imports, it was generating work for Chinese companies, and, on an important but less tangible level, it was forging a commercial and political alliance.
[00:08:22] And this, if it worked well, could become a blueprint for deals with other countries, and a way of securing influence in areas China had traditionally not shown much interest in.
[00:08:36] In 2004, the first loan agreement was signed. A mere $2 billion, with a guarantee of 40,000 barrels per day, but this was quickly followed by more.
[00:08:50] In the following 14 years, there were an estimated 43 billion dollars worth of loans provided by China to Angola.
[00:09:01] And for much of this period, it seemed to be a textbook example of a new development model - one that, in many ways, was truly mutually beneficial.
[00:09:15] China became Angola’s top customer, overtaking the United States.
[00:09:21] Oil production doubled, roads, hospitals, and housing sprang up all over the country, and the Angolan economy grew at 11% a year.
[00:09:33] By 2012, Chinese nationals had become the largest immigrant group in Angola, with an estimated 300,000 Chinese workers in the country.
[00:09:45] There were still concerns around corruption and nepotism, President Dos Santos had handed over control of several of the state-run telecoms and energy companies to his daughter, Isabel, who has been accused of being just as corrupt as her father.
[00:10:01] As a quick side note, Isabel Dos Santos was found to be the owner of a bunch of Malta-based companies that are accused of being used to steal money from the Angolan state, so I always find it interesting to see how these kinds of stories have a link back to this little Mediterranean island.
[00:10:20] If you’d like to listen to more episodes about Maltese corruption, I’ll put a link in the description where you can find those.
[00:10:27] Now, stuff was being built all over Angola, in economic terms, Angola was producing much more and there was much more money flowing into the country.
[00:10:39] But how did this translate into the day-to-day lives of the average Angolan?
[00:10:47] Well, things did get better. The average life expectancy went from 47 in 2002 to 62 today, healthcare spending went from $29 per person in 2002 to $143 in 2013, on pretty much all major indicators, things got better, not worse.
[00:11:12] Bundled all together and looked at in the UN’s “Human Development Index”, Angola went from 0.44 in 2002 to 0.59 in 2015.
[00:11:25] This is all a positive development, but there are a few things worth clarifying.
[00:11:32] Firstly, it was starting from a serious low, an awful civil war that had ravaged the country. It was starting from practically rock bottom, so it would have been very surprising if it had got worse.
[00:11:47] And secondly, this growth wasn’t much different from many other sub-Saharan African countries at a similar time, countries that hadn’t received any similar Chinese-backed loans.
[00:12:00] And thirdly, in 2014, something happened that brought it all crashing down.
[00:12:08] The oil price plummeted, dropping 70% between the middle of 2014 and 2016.
[00:12:18] Angola still needed to provide China with the same amount of oil, but it was getting paid less, up to 70% less, for each barrel, meaning it would need to send China more than double the amount of oil to be paid the same as before.
[00:12:36] Now, it could have gone the other way, of course.
[00:12:39] If the oil price had doubled, then Angola would have been paid double for the same amount oil, it could have paid off the loan in half the time, and been in an even more fortunate position.
[00:12:50] But that didn’t happen.
[00:12:54] And because the Angolan economy had become so dependent on this “easy money” from oil exports, there had been minimal investment in anything other than the energy sector, which accounted for around 70% of the entire Angolan economy.
[00:13:12] This placed the country in a bit of a bind, some serious difficulty.
[00:13:18] Its ability to pay back its loans to China is highly dependent on the global oil price, something over which it has zero control.
[00:13:28] It failed to diversify its economy in any real way, so when the oil price fell, it was in serious trouble.
[00:13:37] And because the money was so easy during the first few years of the agreement, there was little investment in oil production facilities or in exploration for new oil fields.
[00:13:50] Fast forward a few years, and Angola has found that its energy industry, with its ageing equipment and lack of investment, simply isn’t able to produce as much oil as it was 10 years ago.
[00:14:05] From 2019 to 2023, Angola’s oil production actually fell by 22%, and this is all at a time when global oil prices are much lower than they were in the early years of the oil-backed Chinese loans.
[00:14:23] So Angola is exporting less, and being paid less for what it does export.
[00:14:31] Now, what is the impact of all of this?
[00:14:34] In the grand scheme of things, it’s of little importance for China; Angola was one of China’s biggest sources of oil, accounting for almost 30% of oil imports in 2010, but China has since diversified, opting for more reliable partners.
[00:14:55] Angola is now only just in the top 10 of the list of biggest oil exporters to China.
[00:15:02] But all of this matters a lot for Angola, for whom China is still the largest export customer by a large margin.
[00:15:12] And given the terms of the loan and the reduction in Angola’s oil production capacity, a considerable proportion the oil that Angola is able to export needs to go to China; meaning it can’t be sold on the open market.
[00:15:30] In 2017, when Dos Santos finally stepped down as President, one of the big policy moves of the new president was to distance himself from China, and what had come to be called the Angolan Model, instead, turning towards the United States.
[00:15:50] By this time, economic growth in Angola had stagnated.
[00:15:55] There were glittering new highways and apartment buildings across the country, but they had been mainly built by Chinese companies and Chinese contractors, most of whom had left the country.
[00:16:08] There simply wasn’t the expertise within the Angolan workforce to continue the momentum that was built up during this period, nor was there the extra financing to support it.
[00:16:22] And bringing it forward to today, Angola’s GDP per capita has decreased by more than 50% from its 2014 highs, and it's now back where it was in 2006.
[00:16:38] Now, to the critics of this “Angolan Model”, they have been quick to stand up and say, “I told you so, of course, providing tens of billions of dollars to a country with weak institutions and endemic corruption would be a recipe for disaster”.
[00:16:53] These critics also pointed at the fact that the infrastructure projects in the country would be completed by Chinese companies with Chinese workers, thereby doing little to upskill the Angolan workforce, or put money back into the local economy.
[00:17:11] Chinese workers would be flown in, they would send money back to China, and there was very little trickle-down effect into the local economy.
[00:17:21] Then there’s the question of who really benefited.
[00:17:26] While ordinary Angolans saw some gains, the elite, like dos Santos, his daughter Isabel, and their cronies, they siphoned off staggering sums.
[00:17:39] Isabel Dos Santos’ empire, with its shady Malta-based companies, became a symbol of how the system enriched a few while leaving most behind.
[00:17:49] The Chinese loans certainly didn’t cause this corruption, but they didn’t help either.
[00:17:56] By turning a blind eye, so the critics argue, China enabled a system where billions vanished into offshore accounts.
[00:18:06] However, on the other side, there are those who argue this is a serious simplification.
[00:18:13] Given that the Chinese loans were tied to infrastructure projects, and the money went from Chinese banks to Chinese companies, there was actually less potential for corruption than there would have been with ordinary cash loans.
[00:18:30] Yes, because we are talking about tens of billions of dollars in a highly corrupt country with weak institutions, of course, there would be a little bit of corruption, but the structure of these infrastructure-backed loans meant it was harder for money to end up in a government official’s pocket.
[00:18:48] And as to the question of these loans requiring Angola to use Chinese companies, well, of course, a country would prefer to give contracts to its own companies, it would be strange, irresponsible perhaps, if it didn’t.
[00:19:04] And China didn’t force the Angolan government to take this loan.
[00:19:10] In fact, Angola had tried to get loans from the IMF and the World Bank, but Dos Santos didn’t like the requirements of the loan: increased transparency and anti-corruption measures. Angola had two options: the IMF route or the China route. It made its choice, and China shouldn’t be blamed or held responsible when its terms were perfectly clear from the outset.
[00:19:39] So, what’s the verdict on the Angolan Model?
[00:19:43] It’s tempting to call it a failure, but that’s too simplistic.
[00:19:49] For a decade, it transformed Angola, pulling it from the ashes of civil war into a brief moment of prosperity.
[00:19:58] But it highlighted the risks of the so-called Resource Curse, when a country gets so used to funds flowing in from a commodity that literally flows out of the ground that it fails to take any real steps to prepare for a rainy day.
[00:20:16] Across Africa, the Angolan Model has left a mixed legacy.
[00:20:21] Countries like Zambia and Kenya, which signed similar deals, are now grappling with their own Chinese debt burdens.
[00:20:31] To some critics, both Angolan and external, this is colonialism 2.0, the dangling of a tempting carrot in front of a resource-rich but cash-poor nation.
[00:20:46] But to others, China builds where the West only preaches, it is better to leave a country with roads, hospitals and airports than to hand out cash that will only end up in an official’s pocket.
[00:21:01] Angola’s experience is a cautionary tale, but it’s also a reminder that development is never easy. There’s no such thing as a free lunch, especially not when someone asks you to pass the oil.
[00:21:17] OK then, that is it for today's episode on the Angolan Model, and with it comes the end of this three-part mini-series on power struggles in post-colonial Africa.
[00:21:29] In case you missed them, part one was on the leopard-skin hat-wearing dictator of the Democratic Republic of Congo, Mobutu Sese Soko, and part two was on the foiled plot to launch a coup in Equatorial Guinea.
[00:21:43] A bit of a mixture, I know, but I hope you enjoyed them.
[00:21:48] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:21:53] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[00:00:05] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today is part three of our three-part mini-series on “power struggles in post-colonial Africa”.
[00:00:29] In case you missed them, in part one, we talked about Mobutu Sese Seko, the fiery Congolese leader who ruled the country for more than three decades.
[00:00:40] In part two, we talked about the time that the son of a British Prime Minister and an ex-Etonian mercenary teamed up to launch a coup in Equatorial Guinea.
[00:00:51] And in today’s episode, part three, we are going to explore what’s known as the Angolan Model, how China has reshaped the rules of the game in post-colonial Africa, trading infrastructure projects for natural resources.
[00:01:06] It’s a fascinating story involving billions of dollars, geopolitics, and the debate about whether China is a partner in African development or a neo-colonial power in disguise.
[00:01:19] So, let’s not waste a minute and get right into it.
[00:01:26] Even the most amateur student of history will know that wars, in general, end up being pretty bad news for everyone involved.
[00:01:36] And from world wars to regional struggles, there have been some horrific wars indeed.
[00:01:42] So, when a United Nations special envoy describes a war as “the worst war in the world”, well, it is something worth paying attention to.
[00:01:55] This war was the Angolan Civil War, which went on in various phases from 1975 right the way through to 2002.
[00:02:07] It started out as a proxy war as part of the Cold War, with the Soviet Union supporting one side, and the United States and a mixture of other Western powers supporting the anti-government rebels.
[00:02:21] Of course, this is somewhat of a simplification; there were all sorts of different interest groups, and the nature of the conflict changed as it dragged on for almost forty years.
[00:02:33] But, in 2002, the conflict was over, and the country was in tatters.
[00:02:41] The total number of dead is unclear, with most estimates putting it at somewhere between 500,000 and a million, while more than 4 million people were displaced, ⅓ of the entire population at the time.
[00:02:58] According to a UN report, 80% of Angolans lacked access to basic medical care, 60% had no access to water, and 30% of Angolan children would die before the age of five.
[00:03:15] Yet, just 10 years later, the tide had changed.
[00:03:20] GDP per capita had increased by more than 5 times, making it, on the surface, one of the wealthiest countries in Africa.
[00:03:29] And fast-forwarding another 10 years to today, well, things are no longer so rosy for Angola, but we’ll come to that in a minute.
[00:03:40] First, let me give you a very brief reminder about Angola and some Angolan history.
[00:03:47] It’s a large country on the west coast of Africa. If you imagine South Africa at the bottom, then going up on the west side of the continent, you have Namibia, and then you hit Angola.
[00:04:01] It was a Portuguese colony from 1575 until 1974, and was used as a major slave trading port, sending slaves across the Atlantic, mainly to Brazil.
[00:04:15] Grim stuff, of course, but we aren’t talking about that bit of Angolan history.
[00:04:21] We’re talking about what happened after the civil war ended, in 2002.
[00:04:28] The country was on its knees.
[00:04:31] It had been ruled by a man called José Eduardo dos Santos since 1979, so throughout the civil war, but like a few other characters we’ve come across in this mini-series, he was deeply corrupt and amassed a huge personal fortune while his people lived in poverty.
[00:04:52] Dos Santos knew that the country was in dire need of being rebuilt: schools, roads, railways, airports, all of the basic infrastructure that had either been destroyed in the civil war or never been built in the first place.
[00:05:10] But there was no money to do this.
[00:05:14] The World Bank or the IMF were places where countries could ask for development finance, and they were typically happy to provide these kinds of loans. But they came with strings attached, there were certain requirements for what a country had to do in order to qualify for these kinds of loans.
[00:05:36] Typically, this meant increasing transparency, allowing more political opposition, and putting into place anti-corruption measures, all stuff that World Bank and IMF economists required any country to do in order to qualify for a loan.
[00:05:55] And for most of the late 20th century, for countries that desperately needed development finance, this was the only option.
[00:06:05] Take it or leave it.
[00:06:08] But in the early 21st century, this started to not be the only game in town.
[00:06:17] On the other side of the world, the Chinese economy was growing at breakneck speed.
[00:06:23] China doesn’t have particularly large oil reserves, especially compared to its population and its energy needs, and since 1993, it has been a net importer of oil, buying oil from all over the world to meet its needs.
[00:06:41] China had plenty of US dollars, given its increasing exports to the United States. So Chinese policymakers proposed a solution.
[00:06:52] China would lend Angola the money it needed to rebuild the country, at fair, even below-market interest rates.
[00:07:01] And it wouldn’t ask questions about making steps towards democracy or anti-corruption. China was not going to interfere in the domestic affairs of another country.
[00:07:13] But, it did want something in return.
[00:07:18] Oil.
[00:07:19] See, Angola has vast oil reserves - an estimated 9 billion barrels worth.
[00:07:27] The deal would be structured broadly as follows: China would give Angola the money it so desperately needed, and in return, Angola would be required to sell China a certain number of barrels of oil every month.
[00:07:44] The money was to be spent on certain pre-agreed-upon infrastructure projects, like roads, hospitals, and housing, and there was typically a condition that a certain percentage of the work would need to be carried out by Chinese companies.
[00:08:02] For China, it looked to be a pretty good deal.
[00:08:06] It was securing a source of future oil imports, it was generating work for Chinese companies, and, on an important but less tangible level, it was forging a commercial and political alliance.
[00:08:22] And this, if it worked well, could become a blueprint for deals with other countries, and a way of securing influence in areas China had traditionally not shown much interest in.
[00:08:36] In 2004, the first loan agreement was signed. A mere $2 billion, with a guarantee of 40,000 barrels per day, but this was quickly followed by more.
[00:08:50] In the following 14 years, there were an estimated 43 billion dollars worth of loans provided by China to Angola.
[00:09:01] And for much of this period, it seemed to be a textbook example of a new development model - one that, in many ways, was truly mutually beneficial.
[00:09:15] China became Angola’s top customer, overtaking the United States.
[00:09:21] Oil production doubled, roads, hospitals, and housing sprang up all over the country, and the Angolan economy grew at 11% a year.
[00:09:33] By 2012, Chinese nationals had become the largest immigrant group in Angola, with an estimated 300,000 Chinese workers in the country.
[00:09:45] There were still concerns around corruption and nepotism, President Dos Santos had handed over control of several of the state-run telecoms and energy companies to his daughter, Isabel, who has been accused of being just as corrupt as her father.
[00:10:01] As a quick side note, Isabel Dos Santos was found to be the owner of a bunch of Malta-based companies that are accused of being used to steal money from the Angolan state, so I always find it interesting to see how these kinds of stories have a link back to this little Mediterranean island.
[00:10:20] If you’d like to listen to more episodes about Maltese corruption, I’ll put a link in the description where you can find those.
[00:10:27] Now, stuff was being built all over Angola, in economic terms, Angola was producing much more and there was much more money flowing into the country.
[00:10:39] But how did this translate into the day-to-day lives of the average Angolan?
[00:10:47] Well, things did get better. The average life expectancy went from 47 in 2002 to 62 today, healthcare spending went from $29 per person in 2002 to $143 in 2013, on pretty much all major indicators, things got better, not worse.
[00:11:12] Bundled all together and looked at in the UN’s “Human Development Index”, Angola went from 0.44 in 2002 to 0.59 in 2015.
[00:11:25] This is all a positive development, but there are a few things worth clarifying.
[00:11:32] Firstly, it was starting from a serious low, an awful civil war that had ravaged the country. It was starting from practically rock bottom, so it would have been very surprising if it had got worse.
[00:11:47] And secondly, this growth wasn’t much different from many other sub-Saharan African countries at a similar time, countries that hadn’t received any similar Chinese-backed loans.
[00:12:00] And thirdly, in 2014, something happened that brought it all crashing down.
[00:12:08] The oil price plummeted, dropping 70% between the middle of 2014 and 2016.
[00:12:18] Angola still needed to provide China with the same amount of oil, but it was getting paid less, up to 70% less, for each barrel, meaning it would need to send China more than double the amount of oil to be paid the same as before.
[00:12:36] Now, it could have gone the other way, of course.
[00:12:39] If the oil price had doubled, then Angola would have been paid double for the same amount oil, it could have paid off the loan in half the time, and been in an even more fortunate position.
[00:12:50] But that didn’t happen.
[00:12:54] And because the Angolan economy had become so dependent on this “easy money” from oil exports, there had been minimal investment in anything other than the energy sector, which accounted for around 70% of the entire Angolan economy.
[00:13:12] This placed the country in a bit of a bind, some serious difficulty.
[00:13:18] Its ability to pay back its loans to China is highly dependent on the global oil price, something over which it has zero control.
[00:13:28] It failed to diversify its economy in any real way, so when the oil price fell, it was in serious trouble.
[00:13:37] And because the money was so easy during the first few years of the agreement, there was little investment in oil production facilities or in exploration for new oil fields.
[00:13:50] Fast forward a few years, and Angola has found that its energy industry, with its ageing equipment and lack of investment, simply isn’t able to produce as much oil as it was 10 years ago.
[00:14:05] From 2019 to 2023, Angola’s oil production actually fell by 22%, and this is all at a time when global oil prices are much lower than they were in the early years of the oil-backed Chinese loans.
[00:14:23] So Angola is exporting less, and being paid less for what it does export.
[00:14:31] Now, what is the impact of all of this?
[00:14:34] In the grand scheme of things, it’s of little importance for China; Angola was one of China’s biggest sources of oil, accounting for almost 30% of oil imports in 2010, but China has since diversified, opting for more reliable partners.
[00:14:55] Angola is now only just in the top 10 of the list of biggest oil exporters to China.
[00:15:02] But all of this matters a lot for Angola, for whom China is still the largest export customer by a large margin.
[00:15:12] And given the terms of the loan and the reduction in Angola’s oil production capacity, a considerable proportion the oil that Angola is able to export needs to go to China; meaning it can’t be sold on the open market.
[00:15:30] In 2017, when Dos Santos finally stepped down as President, one of the big policy moves of the new president was to distance himself from China, and what had come to be called the Angolan Model, instead, turning towards the United States.
[00:15:50] By this time, economic growth in Angola had stagnated.
[00:15:55] There were glittering new highways and apartment buildings across the country, but they had been mainly built by Chinese companies and Chinese contractors, most of whom had left the country.
[00:16:08] There simply wasn’t the expertise within the Angolan workforce to continue the momentum that was built up during this period, nor was there the extra financing to support it.
[00:16:22] And bringing it forward to today, Angola’s GDP per capita has decreased by more than 50% from its 2014 highs, and it's now back where it was in 2006.
[00:16:38] Now, to the critics of this “Angolan Model”, they have been quick to stand up and say, “I told you so, of course, providing tens of billions of dollars to a country with weak institutions and endemic corruption would be a recipe for disaster”.
[00:16:53] These critics also pointed at the fact that the infrastructure projects in the country would be completed by Chinese companies with Chinese workers, thereby doing little to upskill the Angolan workforce, or put money back into the local economy.
[00:17:11] Chinese workers would be flown in, they would send money back to China, and there was very little trickle-down effect into the local economy.
[00:17:21] Then there’s the question of who really benefited.
[00:17:26] While ordinary Angolans saw some gains, the elite, like dos Santos, his daughter Isabel, and their cronies, they siphoned off staggering sums.
[00:17:39] Isabel Dos Santos’ empire, with its shady Malta-based companies, became a symbol of how the system enriched a few while leaving most behind.
[00:17:49] The Chinese loans certainly didn’t cause this corruption, but they didn’t help either.
[00:17:56] By turning a blind eye, so the critics argue, China enabled a system where billions vanished into offshore accounts.
[00:18:06] However, on the other side, there are those who argue this is a serious simplification.
[00:18:13] Given that the Chinese loans were tied to infrastructure projects, and the money went from Chinese banks to Chinese companies, there was actually less potential for corruption than there would have been with ordinary cash loans.
[00:18:30] Yes, because we are talking about tens of billions of dollars in a highly corrupt country with weak institutions, of course, there would be a little bit of corruption, but the structure of these infrastructure-backed loans meant it was harder for money to end up in a government official’s pocket.
[00:18:48] And as to the question of these loans requiring Angola to use Chinese companies, well, of course, a country would prefer to give contracts to its own companies, it would be strange, irresponsible perhaps, if it didn’t.
[00:19:04] And China didn’t force the Angolan government to take this loan.
[00:19:10] In fact, Angola had tried to get loans from the IMF and the World Bank, but Dos Santos didn’t like the requirements of the loan: increased transparency and anti-corruption measures. Angola had two options: the IMF route or the China route. It made its choice, and China shouldn’t be blamed or held responsible when its terms were perfectly clear from the outset.
[00:19:39] So, what’s the verdict on the Angolan Model?
[00:19:43] It’s tempting to call it a failure, but that’s too simplistic.
[00:19:49] For a decade, it transformed Angola, pulling it from the ashes of civil war into a brief moment of prosperity.
[00:19:58] But it highlighted the risks of the so-called Resource Curse, when a country gets so used to funds flowing in from a commodity that literally flows out of the ground that it fails to take any real steps to prepare for a rainy day.
[00:20:16] Across Africa, the Angolan Model has left a mixed legacy.
[00:20:21] Countries like Zambia and Kenya, which signed similar deals, are now grappling with their own Chinese debt burdens.
[00:20:31] To some critics, both Angolan and external, this is colonialism 2.0, the dangling of a tempting carrot in front of a resource-rich but cash-poor nation.
[00:20:46] But to others, China builds where the West only preaches, it is better to leave a country with roads, hospitals and airports than to hand out cash that will only end up in an official’s pocket.
[00:21:01] Angola’s experience is a cautionary tale, but it’s also a reminder that development is never easy. There’s no such thing as a free lunch, especially not when someone asks you to pass the oil.
[00:21:17] OK then, that is it for today's episode on the Angolan Model, and with it comes the end of this three-part mini-series on power struggles in post-colonial Africa.
[00:21:29] In case you missed them, part one was on the leopard-skin hat-wearing dictator of the Democratic Republic of Congo, Mobutu Sese Soko, and part two was on the foiled plot to launch a coup in Equatorial Guinea.
[00:21:43] A bit of a mixture, I know, but I hope you enjoyed them.
[00:21:48] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:21:53] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
[00:00:05] Hello, hello, hello, and welcome to English Learning for Curious Minds, by Leonardo English, the show where you can listen to fascinating stories and learn weird and wonderful things about the world at the same time as improving your English.
[00:00:20] I'm Alastair Budge, and today is part three of our three-part mini-series on “power struggles in post-colonial Africa”.
[00:00:29] In case you missed them, in part one, we talked about Mobutu Sese Seko, the fiery Congolese leader who ruled the country for more than three decades.
[00:00:40] In part two, we talked about the time that the son of a British Prime Minister and an ex-Etonian mercenary teamed up to launch a coup in Equatorial Guinea.
[00:00:51] And in today’s episode, part three, we are going to explore what’s known as the Angolan Model, how China has reshaped the rules of the game in post-colonial Africa, trading infrastructure projects for natural resources.
[00:01:06] It’s a fascinating story involving billions of dollars, geopolitics, and the debate about whether China is a partner in African development or a neo-colonial power in disguise.
[00:01:19] So, let’s not waste a minute and get right into it.
[00:01:26] Even the most amateur student of history will know that wars, in general, end up being pretty bad news for everyone involved.
[00:01:36] And from world wars to regional struggles, there have been some horrific wars indeed.
[00:01:42] So, when a United Nations special envoy describes a war as “the worst war in the world”, well, it is something worth paying attention to.
[00:01:55] This war was the Angolan Civil War, which went on in various phases from 1975 right the way through to 2002.
[00:02:07] It started out as a proxy war as part of the Cold War, with the Soviet Union supporting one side, and the United States and a mixture of other Western powers supporting the anti-government rebels.
[00:02:21] Of course, this is somewhat of a simplification; there were all sorts of different interest groups, and the nature of the conflict changed as it dragged on for almost forty years.
[00:02:33] But, in 2002, the conflict was over, and the country was in tatters.
[00:02:41] The total number of dead is unclear, with most estimates putting it at somewhere between 500,000 and a million, while more than 4 million people were displaced, ⅓ of the entire population at the time.
[00:02:58] According to a UN report, 80% of Angolans lacked access to basic medical care, 60% had no access to water, and 30% of Angolan children would die before the age of five.
[00:03:15] Yet, just 10 years later, the tide had changed.
[00:03:20] GDP per capita had increased by more than 5 times, making it, on the surface, one of the wealthiest countries in Africa.
[00:03:29] And fast-forwarding another 10 years to today, well, things are no longer so rosy for Angola, but we’ll come to that in a minute.
[00:03:40] First, let me give you a very brief reminder about Angola and some Angolan history.
[00:03:47] It’s a large country on the west coast of Africa. If you imagine South Africa at the bottom, then going up on the west side of the continent, you have Namibia, and then you hit Angola.
[00:04:01] It was a Portuguese colony from 1575 until 1974, and was used as a major slave trading port, sending slaves across the Atlantic, mainly to Brazil.
[00:04:15] Grim stuff, of course, but we aren’t talking about that bit of Angolan history.
[00:04:21] We’re talking about what happened after the civil war ended, in 2002.
[00:04:28] The country was on its knees.
[00:04:31] It had been ruled by a man called José Eduardo dos Santos since 1979, so throughout the civil war, but like a few other characters we’ve come across in this mini-series, he was deeply corrupt and amassed a huge personal fortune while his people lived in poverty.
[00:04:52] Dos Santos knew that the country was in dire need of being rebuilt: schools, roads, railways, airports, all of the basic infrastructure that had either been destroyed in the civil war or never been built in the first place.
[00:05:10] But there was no money to do this.
[00:05:14] The World Bank or the IMF were places where countries could ask for development finance, and they were typically happy to provide these kinds of loans. But they came with strings attached, there were certain requirements for what a country had to do in order to qualify for these kinds of loans.
[00:05:36] Typically, this meant increasing transparency, allowing more political opposition, and putting into place anti-corruption measures, all stuff that World Bank and IMF economists required any country to do in order to qualify for a loan.
[00:05:55] And for most of the late 20th century, for countries that desperately needed development finance, this was the only option.
[00:06:05] Take it or leave it.
[00:06:08] But in the early 21st century, this started to not be the only game in town.
[00:06:17] On the other side of the world, the Chinese economy was growing at breakneck speed.
[00:06:23] China doesn’t have particularly large oil reserves, especially compared to its population and its energy needs, and since 1993, it has been a net importer of oil, buying oil from all over the world to meet its needs.
[00:06:41] China had plenty of US dollars, given its increasing exports to the United States. So Chinese policymakers proposed a solution.
[00:06:52] China would lend Angola the money it needed to rebuild the country, at fair, even below-market interest rates.
[00:07:01] And it wouldn’t ask questions about making steps towards democracy or anti-corruption. China was not going to interfere in the domestic affairs of another country.
[00:07:13] But, it did want something in return.
[00:07:18] Oil.
[00:07:19] See, Angola has vast oil reserves - an estimated 9 billion barrels worth.
[00:07:27] The deal would be structured broadly as follows: China would give Angola the money it so desperately needed, and in return, Angola would be required to sell China a certain number of barrels of oil every month.
[00:07:44] The money was to be spent on certain pre-agreed-upon infrastructure projects, like roads, hospitals, and housing, and there was typically a condition that a certain percentage of the work would need to be carried out by Chinese companies.
[00:08:02] For China, it looked to be a pretty good deal.
[00:08:06] It was securing a source of future oil imports, it was generating work for Chinese companies, and, on an important but less tangible level, it was forging a commercial and political alliance.
[00:08:22] And this, if it worked well, could become a blueprint for deals with other countries, and a way of securing influence in areas China had traditionally not shown much interest in.
[00:08:36] In 2004, the first loan agreement was signed. A mere $2 billion, with a guarantee of 40,000 barrels per day, but this was quickly followed by more.
[00:08:50] In the following 14 years, there were an estimated 43 billion dollars worth of loans provided by China to Angola.
[00:09:01] And for much of this period, it seemed to be a textbook example of a new development model - one that, in many ways, was truly mutually beneficial.
[00:09:15] China became Angola’s top customer, overtaking the United States.
[00:09:21] Oil production doubled, roads, hospitals, and housing sprang up all over the country, and the Angolan economy grew at 11% a year.
[00:09:33] By 2012, Chinese nationals had become the largest immigrant group in Angola, with an estimated 300,000 Chinese workers in the country.
[00:09:45] There were still concerns around corruption and nepotism, President Dos Santos had handed over control of several of the state-run telecoms and energy companies to his daughter, Isabel, who has been accused of being just as corrupt as her father.
[00:10:01] As a quick side note, Isabel Dos Santos was found to be the owner of a bunch of Malta-based companies that are accused of being used to steal money from the Angolan state, so I always find it interesting to see how these kinds of stories have a link back to this little Mediterranean island.
[00:10:20] If you’d like to listen to more episodes about Maltese corruption, I’ll put a link in the description where you can find those.
[00:10:27] Now, stuff was being built all over Angola, in economic terms, Angola was producing much more and there was much more money flowing into the country.
[00:10:39] But how did this translate into the day-to-day lives of the average Angolan?
[00:10:47] Well, things did get better. The average life expectancy went from 47 in 2002 to 62 today, healthcare spending went from $29 per person in 2002 to $143 in 2013, on pretty much all major indicators, things got better, not worse.
[00:11:12] Bundled all together and looked at in the UN’s “Human Development Index”, Angola went from 0.44 in 2002 to 0.59 in 2015.
[00:11:25] This is all a positive development, but there are a few things worth clarifying.
[00:11:32] Firstly, it was starting from a serious low, an awful civil war that had ravaged the country. It was starting from practically rock bottom, so it would have been very surprising if it had got worse.
[00:11:47] And secondly, this growth wasn’t much different from many other sub-Saharan African countries at a similar time, countries that hadn’t received any similar Chinese-backed loans.
[00:12:00] And thirdly, in 2014, something happened that brought it all crashing down.
[00:12:08] The oil price plummeted, dropping 70% between the middle of 2014 and 2016.
[00:12:18] Angola still needed to provide China with the same amount of oil, but it was getting paid less, up to 70% less, for each barrel, meaning it would need to send China more than double the amount of oil to be paid the same as before.
[00:12:36] Now, it could have gone the other way, of course.
[00:12:39] If the oil price had doubled, then Angola would have been paid double for the same amount oil, it could have paid off the loan in half the time, and been in an even more fortunate position.
[00:12:50] But that didn’t happen.
[00:12:54] And because the Angolan economy had become so dependent on this “easy money” from oil exports, there had been minimal investment in anything other than the energy sector, which accounted for around 70% of the entire Angolan economy.
[00:13:12] This placed the country in a bit of a bind, some serious difficulty.
[00:13:18] Its ability to pay back its loans to China is highly dependent on the global oil price, something over which it has zero control.
[00:13:28] It failed to diversify its economy in any real way, so when the oil price fell, it was in serious trouble.
[00:13:37] And because the money was so easy during the first few years of the agreement, there was little investment in oil production facilities or in exploration for new oil fields.
[00:13:50] Fast forward a few years, and Angola has found that its energy industry, with its ageing equipment and lack of investment, simply isn’t able to produce as much oil as it was 10 years ago.
[00:14:05] From 2019 to 2023, Angola’s oil production actually fell by 22%, and this is all at a time when global oil prices are much lower than they were in the early years of the oil-backed Chinese loans.
[00:14:23] So Angola is exporting less, and being paid less for what it does export.
[00:14:31] Now, what is the impact of all of this?
[00:14:34] In the grand scheme of things, it’s of little importance for China; Angola was one of China’s biggest sources of oil, accounting for almost 30% of oil imports in 2010, but China has since diversified, opting for more reliable partners.
[00:14:55] Angola is now only just in the top 10 of the list of biggest oil exporters to China.
[00:15:02] But all of this matters a lot for Angola, for whom China is still the largest export customer by a large margin.
[00:15:12] And given the terms of the loan and the reduction in Angola’s oil production capacity, a considerable proportion the oil that Angola is able to export needs to go to China; meaning it can’t be sold on the open market.
[00:15:30] In 2017, when Dos Santos finally stepped down as President, one of the big policy moves of the new president was to distance himself from China, and what had come to be called the Angolan Model, instead, turning towards the United States.
[00:15:50] By this time, economic growth in Angola had stagnated.
[00:15:55] There were glittering new highways and apartment buildings across the country, but they had been mainly built by Chinese companies and Chinese contractors, most of whom had left the country.
[00:16:08] There simply wasn’t the expertise within the Angolan workforce to continue the momentum that was built up during this period, nor was there the extra financing to support it.
[00:16:22] And bringing it forward to today, Angola’s GDP per capita has decreased by more than 50% from its 2014 highs, and it's now back where it was in 2006.
[00:16:38] Now, to the critics of this “Angolan Model”, they have been quick to stand up and say, “I told you so, of course, providing tens of billions of dollars to a country with weak institutions and endemic corruption would be a recipe for disaster”.
[00:16:53] These critics also pointed at the fact that the infrastructure projects in the country would be completed by Chinese companies with Chinese workers, thereby doing little to upskill the Angolan workforce, or put money back into the local economy.
[00:17:11] Chinese workers would be flown in, they would send money back to China, and there was very little trickle-down effect into the local economy.
[00:17:21] Then there’s the question of who really benefited.
[00:17:26] While ordinary Angolans saw some gains, the elite, like dos Santos, his daughter Isabel, and their cronies, they siphoned off staggering sums.
[00:17:39] Isabel Dos Santos’ empire, with its shady Malta-based companies, became a symbol of how the system enriched a few while leaving most behind.
[00:17:49] The Chinese loans certainly didn’t cause this corruption, but they didn’t help either.
[00:17:56] By turning a blind eye, so the critics argue, China enabled a system where billions vanished into offshore accounts.
[00:18:06] However, on the other side, there are those who argue this is a serious simplification.
[00:18:13] Given that the Chinese loans were tied to infrastructure projects, and the money went from Chinese banks to Chinese companies, there was actually less potential for corruption than there would have been with ordinary cash loans.
[00:18:30] Yes, because we are talking about tens of billions of dollars in a highly corrupt country with weak institutions, of course, there would be a little bit of corruption, but the structure of these infrastructure-backed loans meant it was harder for money to end up in a government official’s pocket.
[00:18:48] And as to the question of these loans requiring Angola to use Chinese companies, well, of course, a country would prefer to give contracts to its own companies, it would be strange, irresponsible perhaps, if it didn’t.
[00:19:04] And China didn’t force the Angolan government to take this loan.
[00:19:10] In fact, Angola had tried to get loans from the IMF and the World Bank, but Dos Santos didn’t like the requirements of the loan: increased transparency and anti-corruption measures. Angola had two options: the IMF route or the China route. It made its choice, and China shouldn’t be blamed or held responsible when its terms were perfectly clear from the outset.
[00:19:39] So, what’s the verdict on the Angolan Model?
[00:19:43] It’s tempting to call it a failure, but that’s too simplistic.
[00:19:49] For a decade, it transformed Angola, pulling it from the ashes of civil war into a brief moment of prosperity.
[00:19:58] But it highlighted the risks of the so-called Resource Curse, when a country gets so used to funds flowing in from a commodity that literally flows out of the ground that it fails to take any real steps to prepare for a rainy day.
[00:20:16] Across Africa, the Angolan Model has left a mixed legacy.
[00:20:21] Countries like Zambia and Kenya, which signed similar deals, are now grappling with their own Chinese debt burdens.
[00:20:31] To some critics, both Angolan and external, this is colonialism 2.0, the dangling of a tempting carrot in front of a resource-rich but cash-poor nation.
[00:20:46] But to others, China builds where the West only preaches, it is better to leave a country with roads, hospitals and airports than to hand out cash that will only end up in an official’s pocket.
[00:21:01] Angola’s experience is a cautionary tale, but it’s also a reminder that development is never easy. There’s no such thing as a free lunch, especially not when someone asks you to pass the oil.
[00:21:17] OK then, that is it for today's episode on the Angolan Model, and with it comes the end of this three-part mini-series on power struggles in post-colonial Africa.
[00:21:29] In case you missed them, part one was on the leopard-skin hat-wearing dictator of the Democratic Republic of Congo, Mobutu Sese Soko, and part two was on the foiled plot to launch a coup in Equatorial Guinea.
[00:21:43] A bit of a mixture, I know, but I hope you enjoyed them.
[00:21:48] You've been listening to English Learning for Curious Minds by Leonardo English.
[00:21:53] I'm Alastair Budge, you stay safe, and I'll catch you in the next episode.
