By Henrique Almeida

LUANDA, Sept 1 (Reuters) - Angola's ruling MPLA party
emerged victorious from a 27-year civil war in 2002 promising a
better life for Angolans but this dream is fading as corruption
is rife and the government is seen failing to help the poor.

Despite their nation's vast oil resources, millions of
Angolans live in poverty with an estimated two-thirds of people
in the country living on less than $2 a day.

Other problems include uncertainty around a possible
successor to President Jose Eduardo dos Santos, liquidity
problems in the banking sector and heavy dependence on oil.

Many of the issues feed demands for more government
transparency and accountability as Angola tries to regain
investor confidence after the global financial crisis.

TRANSPARENCY

Dos Santos has been uncharacteristically loud about
corruption after his government turned to the International
Monetary Fund for a $1.3 billion loan last year.

His comments on zero-tolerance on corruption prompted
parliament to pass a law this year to punish public officials
caught stealing from the state.

But it is hard to change the rules of the game when the
players remain the same.

The elites in government often have financial interests in
particular domestic firms that get preferential treatment.

As a result, the decision-making process in Angola tends to
be opaque, with access to the key players in government limited.
The private media is also seen controlled by members of the
government.

The perception of corruption is so high that U.S.-based
firms run the risk of violating the Foreign Corrupt Practices
Act, even though U.S. investors have generally done well in
Angola and most have avoided crossing any FCPA lines.

Solid statistics and market relevant information are also
scarce in a country where the MPLA holds a huge sway over the
media. Some investors may feel as though they are entering the
market half-blind.

Such lack of transparency can lead to unwelcome surprises,
such as when the Angolan government announced commercial arrears
of an estimated $6.8 billion far exceeded prior expectations.

Watch out for:

-- Signs of falling investor confidence.

-- Detention of corrupt government officials.

SUCCESSOR

The MPLA's landslide victory in the first post war election
in 2008 left political rivals in tatters, enabling dos Santos to
change the constitution and further increase his powers.

The 68-year-old is widely expected win the 2012 election.

The big question inside the MPLA is who will dos Santos pick
as vice-president and possibly the successor to one of Africa's
longest-serving leaders.

Despite criticism for holding power for more than three
decades and having a huge sway over politics and the economy,
many investors see dos Santos as key to peace and stability.

Vice-President Fernando Piedade Dias dos Santos is seen as a
natural successor to dos Santos but his chances have been marred
by health problems and he could easily be outflanked by
ministers of state Manuel Vieira Dias or Carlos Feijo.

Watch out for:

-- Any comments from dos Santos about his plans to retire.

LIQUIDITY PROBLEMS

Angola's government has said that some banks in the African
nation face liquidity problems and has offered to loan them
money if they follow a restructuring and recapitalisation
programme.

A lack of liquidity in the banking sector could hurt
investor confidence and weigh on economic growth in what was
once one of the world's fastest growing economies.

These problems likely began in May last year when the
central bank began limiting the amount of dollars it sells to
banks and doubled the reserve requirement to 30 percent, leaving
lenders with less money available.

A rise in bad loans, triggered by the global economic
slowdown, also made the liquidity problems worse.

The government did not single out any single bank of an
estimated 20 lenders operating in Angola, which include Banco
Fomento Angola, controlled by Portugal's Banco BPI, Banco
Africano de Investimentos and Banco BIC.

Other lenders include South Africa's Standard Bank and BESA,
which is controlled by Portugal's Banco Espirito Santo.

Watch out for:

-- Banks adhering to the government's bank rescue programme.

-- A run on some banks by clients concerned about the safety
of their deposits.

-- Measures by the central bank to increase liquidity in the
banking sector.

OIL DEPENDENCY

Oil has helped Angola pick up the pieces of a devastating
civil war to become sub-Saharan Africa's third biggest economy
after South Africa and Nigeria.

But as in many oil producing nations, Angola's oil
dependence can also be a curse.

Despite moves to diversify and invest in sectors such as
agriculture, oil still accounts for 90 percent of Angola's
export income but employs less than 1 percent of the population.

The oil price slump in 2008 left Angola struggling to pay
salaries to civil servants and forced it to delay billions of
dollars in payments to construction firms rebuilding the nation
after the war.

In Angola's oil-rich province of Cabinda, rebels from
separatist group FLEC, which has waged a war against the
government for decades, fatally attacked the Togo soccer team in
January as they made their way to the African Nations Cup.

The roots of the conflict are long and complex but one
grievance is that many Cabindans have is that they see little of
the oil that comes from their land.

The IMF, the World Bank and ratings agencies, which have
given Angola the same B+ rating as Nigeria, have all urged the
African nation to do more to diversify its economy.

Should Angola fail to broaden its economy, it risks becoming
another Nigeria where quarrels about the distribution of oil
wealth have fuelled civil unrest.

Angola rivals Nigeria as Africa's biggest oil producer.

Watch out for:

-- Concrete moves to diversify the economy into sectors such
as agriculture.

-- The outcome of peace talks between government and FLEC.

-- Ability of the government to pay back $6.8 billion in
late bills to construction firms.