Map of Angola

Published

Blog type

4 min read
Rui Oliveira (MSc Finance 2011),

Written by Rui Oliveira (MSc Finance 2011), CEO at BFA Asset Management, based in Angola. In this first blog post he reflects on Angola's response to the pandemic and its economic consequences, and why a pathway to social innovation is key. 

Angola’s pathway to social innovation Part I

Jean-Jacques Rousseau so eloquently said “men are born free, yet everywhere are in chains,” but if so, the civil society to which all men are “chained” to, Burke argued, must be governed by a social contract upon which “a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born” is reflected. – Jean-Jacques Rousseau, The Social Contract, Edmund Burke, Reflections on the Revolution in France

The Kimbos way

Long before Angola’s emergence as a democratic, pseudo-capitalist nation, known for its exceptional abundance in one of the world’s most valuable commodities – oil – it was a vast land of different communities. These communities were known as Kimbos, a set of houses that form a rural community. Kimbos were usually run by a male leader, known as the Soba, who through matrilineal lineage, had political and economic centralised command.

Over the years there has been a significant increase in mobilisation of people from rural, farming areas to urban centres in search of a safer environment and better opportunities for income generation. This has been partly due to independence and also Angola’s 30-year armed conflict. The result has been accelerated levels of urbanisation, although the Kimbo culture can still be felt among these ‘modern’ Angolan communities. Accelerated urbanisation led to a significant knowledge gap and a split of ideologies across generations;  one which caters for a democratic political system, technology advancements and new economic thinking; and one which feels progressive thinking is pervasive to traditional ways of living.

The financial crisis of 2007-08 and today’s Covid-19 pandemic has challenged our views about our health and economic systems.

Social contract

Rousseau and Burke’s arguments may be difficult to relate to our modern times, but we can look to history, from pre-modern Ottoman Empire to modern America, for an explanation. A nation’s social contract between the sovereign and the general will of the people is based on four factors — property rights, scientific rationalism, effective capital markets, and efficient communication and mobilisation. This combined with the country’s institutional context - labour markets, capital markets, openness, political and social system - can lead a nation to prosperity. However, a lack of these things is a recipe for a decaying state.  I believe the key to understanding lies in Angola’s ambition to amend its previously incorrect state of affairs. We have the chance to help steer the Angolan Sovereign’s political and economic function to effective reforms built around social innovation, fostering inclusion and well-being through improving social relations and promotion of empowerment processes.

A time of opportunity

The financial crisis of 2007-08 and today’s Covid-19 pandemic has challenged our views about our health and economic systems. It also changed the way we interact with each other. For many countries, this has presented a unique opportunity to re-invent their societies towards a new mechanics around capitalism and redistributions of wealth and how technology can be used as a tool to achieve it.

This has not proven a simple task for Angola. The country’s complex social construct and a fiscal deficit of 100% of GDP, associated with the lack of domestic savings, means the economic options are reduced to:

  1. Renegotiation of external and domestic debt to free fiscal capacity
  2. Mobilisation of external savings in the form of foreign direct investment

However both these options are only possible with a quick and decisive economic reform to put the country in the map of investment destinations.  Furthermore, many of Angola’s current social challenges - including poverty, community displacement, income inequality, illiteracy, weak institutional context, political patronage and poor infrastructure - are all direct outcomes of an ideological dilemma. These challenges now face both policymakers and Angolans, as they decide what should constitute the country’s social contract.

Published

Blog type