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* In oil slump, Angola rues petroleum addiction
* Push to broaden economy too little, too late
* President asks daughter to clean up state oil firm
* Dos Santos hinting at 2018 as retirement date
By Ed Cropley
LUANDA, July 5 (Reuters) - A month ago, a 17 tonne shipmentof bananas left Angola for Portugal in what state media heraldedas a "first symbolic batch" in the resurgence of a farmingsector wiped out by civil war.
But that war ended 14 years ago and since then Angola hasoverlooked agriculture, developing instead an addiction to oilincome and the imports it buys. Now, with crude less than halfits price of two years ago, the country appears to be grindingto a halt.
Africa's top oil producer needs more than a container loadof fruit to solve a financial and economic crisis - compoundedby a public health crisis - that has laid bare the failings ofthe "diversification" mantra of Jose Eduardo dos Santos, itspresident for the last 37 years.
Oil wealth turned Angola into sub-Saharan Africa'sthird-biggest economy and one of the continent's few"upper-middle income" states. But beyond the high-rises on thecapital's Dubai-style coastal promenade, the problems are plainto see.
Cranes stand idle atop half-finished concrete office blocks in Luanda while piles of rubbish lie uncollected in the streets,a result of municipal budget cuts imposed this year to try tobalance the books.
The squalor is a breeding ground for vermin, flies anddisease, and health experts say it is no coincidence that ayellow fever epidemic that started in December in one ofLuanda's vast slums has spread across the country and beyond,reaching even China.
"Luanda is dirty, disgusting," said 58-year-old businessmanAntonio Bobbe, edging past a vagrant rummaging through a moundof trash. "The government doesn't do anything. There's noresponsibility. You should see the rats. They're huge."
On top of the filth, a shortage of hard currency makes doingbusiness tough for anyone but the well-connected. "If you havefriends, government friends, you can get dollars. If not,nothing," said Bobbe. "We hope that the situation changes, butat the moment there's no light at the end of the tunnel."
"ANGOLA RISING" NO MORE
Before independence from Portugal in 1974, Angola was amajor exporter of fruit, coffee and sisal. Then two decades ofconflict destroyed commercial agriculture and since peacereturned in 2002 problems ranging from uncleared mines in sugarplantations to uprooted rural workers have frustrated efforts torevive it.
While Angola has rebuilt an impressive infrastructure,getting any sort of productive industry off the ground has gonenowhere apart from the oil on which it relied to achievebreakneck economic growth.
It now churns out 1.8 million barrels a day from itsoffshore fields and is China's leading crude supplier. But thosepetro-dollars come at a price.
Oil accounts for 40 percent of GDP, 70 percent of governmentrevenues and 95 percent of foreign exchange income, leaving thenation of 25 million people dangerously exposed to fluctuationsin world oil markets.
With crude languishing at $50 a barrel, down from over $100in mid-2014, Angola is starved of dollars. Growth has slowed to3 percent - almost a recession in local terms - while thenational currency has collapsed and inflation in a country thatimports almost everything hit an annual 29 percent in May.
For dos Santos, a Soviet-trained oil engineer regarded asthe pillar of post-war stability, the timing of the twin crisescould not be worse. They have struck a year before an electionand two years before what the 73-year-old president has saidwill be his retirement.
"The fragilities of the post-conflict state that dos Santoshas built are being exposed," said Paula Roque, an Angola expertat Britain's Oxford University. "That whole rhetoric of 'AngolaRising' no longer holds."
Desperate, the government swallowed its pride and soughthelp from the World Health Organization against yellow fever butlast week the International Monetary Fund said Luanda had endedtalks about a broad financial rescue package.
The government has not commented and finance ministerArmando Manuel did not respond to requests for an interview.
GOLDEN GOOSE
Besides yellow fever, few indicators are as telling as thekwanza currency, down more than 40 percent in the lastyear against the dollar at the official central bank rate.
Available only to a lucky few individuals and firms, therate is of little consequence to ordinary Angolans, who have torely on a black market where the kwanza is worth as little as570 to the dollar, less than a third its official value of 165.
"For people bringing in anything from the United States orSouth Africa it's very difficult," said 26-year-old NadioMedina, who used to import used cars from South Africa. Now hesells eggs wholesale to pavement burger stalls.
In an unusually frank admission last month, dos Santosadmitted that bloated state oil company Sonangol, the centralpillar of the economy and the source of nearly all its dollars,had not paid a cent into state coffers since January.
"Our country lives upon imports - imports for food, for rawmaterials to national manufacturers, for industry, agriculture,construction," he said. "We need to make other goods to exportbesides the oil. That is a strategic task."
Yet looking past the rhetoric, the only thing likely tochange is Sonangol.
Last month, dos Santos made his 43-year-old daughter Isabelchief executive, inviting cries of "supersonic nepotism" fromanti-graft website Maka Angola, a rare dissenting voice in oneof Africa's most politically-closed states.
Last year, for instance, 17 members of a Luanda book clubwere jailed for reading a volume described as a "blue-print fornon-violent resistance to repressive regimes".
Isabel dos Santos - said by Forbes magazine to be Africa'srichest woman - insisted her appointment was everything to dowith shaking up Sonangol and nothing to do with a dynastic dosSantos succession plan, as her father's opponents allege.
"It's not because of politics. I was brought into thisproject because of my experience from the private businesssector," she told Reuters in an interview that laid out hercentral aim: to produce more oil for less money.
Foreign oil firms Chevron and BP applaudedher plans that include having Boston Consulting Group andPriceWaterhouseCoopers as advisers and stripping out Sonangol'sreal estate, banking and aviation units to focus on oil.
To many, the overhaul is the clearest sign yet thatPresident dos Santos really is preparing for retirement but notnecessarily to make way for his daughter.
"It's not about Isabel becoming president," said Alex Vines,head of the Africa programme at London's Chatham Housethink-tank. "The regime relies on Sonangol. It's the goose thatlays the golden egg and the reason she was put in charge isbecause it needs serious reform." (editing by David Stamp)
