Glencore Angola (Transparency International)

1998 was a critical year for the Angolan government. As the international oil prices fell
abruptly, the Angolan government was short of cash but desperately needed money for
weapons procurement. An easy solution to this problem for the second richest country in
oil in sub-Saharan Africa, is to engage in oil-backed loans, thereby seriously
compromising oil production for the next few years. A good example of this is the deal
made with the Swiss oil trade company Glencore in 1998, in which the government
mortgaged oil production in exchange for up-front payments adding up to approximately
$900 million. The deal did not meet basic standards of transparency indicated by the IMF,
as the loan was directed to Sonangol and the Presidency instead of the Central bank or the
Ministry of Finance. Several other loans have been concluded after this one.

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