![[ToC]](../images/cpbanner.gif)
FY 1997 Development Fund for Africa: $12,463,502
FY 1997 Economic Support Funds: $10,000,000
FY 1997 P.L. 480 Title II: $24,473,000
Introduction.
Angola is a large, mineral rich country of approximately 11.2 million inhabitants strategically situated along the Atlantic coast in southwestern Africa. It is roughly the size of Texas, California and Florida combined. Under more normal circumstances, the country's mineral wealth, combined with foreign private investment and minimal, strategically directed development assistance from donors, would permit sufficient economic growth to generate a steady increase in the standard of living of its citizens. Unfortunately, circumstances have been far from normal. War has ravaged Angola since the mid 1960s, first a war for independence, and then a bloody civil war that was fought from 1975 until November 1994 with only one brief respite. This civil war caused half a million deaths, 3.5 million displaced persons, and left a devastating legacy of landmines that continue to kill and maim innocent civilians. Consequently, Angola's needs are great. Angola has been the site of the world's largest relief effort. The United Nations estimates that 2.2 million Angolans inside the country still need emergency assistance over a year after the end of the war. Another 325,000 Angolans are still refugees in neighboring countries.
It is in the national interest of the United States to support activities that will bring lasting peace and prosperity to Angola. Until a durable peace accord is fully implemented, the Government of Angola (GOA) will not be able to commit the energy and resources necessary to meet the massive humanitarian needs of its people, stimulate the national economy or develop fledgling democratic institutions. U.S. commercial opportunities will lag and the current security threat to existing U.S. petroleum facilities will continue. On the other hand, a stable and increasingly democratic Angola will significantly reinforce political and economic prospects for the entire southern Africa region.
U.S. private investments in Angola, estimated to be over $3 billion, are among the largest in sub-Saharan Africa. Despite the protracted warfare, U.S. oil companies continued to invest in Angola's petroleum pumping, refining and storage facilities, and cumulative U.S. investments in oil extraction there are now estimated at $2.5 billion. The United States buys 70% - 80% of all Angola's oil, which accounts for 7% of all American oil imports. Other valuable minerals available for commercial exploitation once civil strife ceases definitively include diamonds, iron ore, manganese and copper. Angola was the world's fourth largest producer of diamonds before the outbreak of war in 1975. In addition, Angola possesses large tracts of land suitable for agricultural and livestock production, vast forests, rich coastal fishing grounds and considerable hydroelectric energy potential.
USAID's development assistance program to Angola began in 1992. It was suspended in 1993 due to a deterioration in security conditions and subsequently terminated in 1994. Development assistance resumed in 1995, with a grant for $4.0 million for agricultural rehabilitation and $2.0 million for assistance to displaced children and orphans. However, USAID has continuously provided humanitarian and emergency relief to Angola on a major scale since 1989. For example, in FY 1995, USAID's Office of Foreign Disaster Assistance and Food for Peace together provided approximately $73.4 million in emergency humanitarian assistance. USAID's five-year preliminary transitional strategy for Angola encompasses the work of all Agency offices and programs operating in Angola. This strategy integrates all forms of aid to help move the country along a continuum from emergency relief to recovery, rehabilitation, reconstruction and sustained development of the country.
With regard to a graduation timeframe, in July 1995 USAID approved a five-year preliminary transitional strategy for Angola. Angola is endowed with enormous natural resources and has the potential to self-finance, eventually, its development programs. Thus, as peace and stability return to Angola, USAID envisions undertaking a unique development partnership with the GOA which places emphasis on the Government to allocate an increasing share of its financial resources towards development and self-sustainability.
Angola is on the road to a durable peace. On November 20, 1994, a comprehensive peace agreement, the Lusaka Protocol, was signed by the GOA and its former combatants, the National Union for the Total Independence of Angola (UNITA). The aim of this protocol is to consolidate the peace process, promote national reconciliation, and achievepolitical stability. The peace accords called for a cease-fire, the quartering and disarming of UNITA troops, the formation of a unified national army, and participation of UNITA in the government alongside the ruling party, the Popular Movement for the Liberation of Angola. Since the signing of the peace accord, Angola's gross domestic product (GDP) has grown by nine percent and its capacity to import foreign products has also increased.
On March 1, 1996, President dos Santos and Dr. Savimbi held their fourth direct meeting in Libreville. After their meeting, they announced their intention to accelerate the implementation of the Lusaka Accord and agreed to: (a) quarter all UNITA troops, (b) form a joint senior military command and begin the integration of UNITA forces into the national armed forces by the end of June and (c) form a Government of National Reconciliation by the end of July.
The Development Challenge.
While oil exports currently generate sufficient revenues to provide the country with a per capita GDP of about $410, this is only half the GDP per capita of 1990, a sign of the devastation experienced by Angola in the last few, but most intense, years of the war. Most indicators of social and economic performance rank Angola among the poorest countries in the world. The relatively low performance ranking is largely explained by three factors: (a) incessant warfare, which has claimed more than 500,000 lives, has made life in the countryside too insecure for agricultural production, and has destroyed the economic and physical infrastructure; (b) severe human resources constraints, due to a massive exodus of expatriates at independence and resulting skill shortages that the country has not been able to replace; and (c) highly inefficient economic management with excessive reliance on central planning and pervasive administrative controls. According to a UN Security Council report, up to 70% of the basic health system has been destroyed, only 18% of the population has access to sanitation and 34% to safe water, and approximately 70,000 people have been maimed by weapons and/or landmines.
As a consequence of these factors, Angola, which was formerly an important net exporter of agricultural products, has become increasingly dependent on food imports (and food aid) to supply its urban markets and camps for the displaced. However, as a result of the continued success of the peace process, Angola is less dependent on food aid today and USAID's humanitarian food aid has gradually reduced. For FY1997, food aid for Angola is expected to be reduced to less than half the level provided in FY 1995. Nevertheless, there continues to be shortages of essential consumer goods and services throughout the country. Marketing infrastructure and rural trading systems have been devastated. There is a shortage of trained personnel in all sectors. The concentration of war-displaced populations in various rural and urban fringe areas is a contributing factor to environmental degradation.
As peace returns, economic policy management must move rapidly to the forefront of GOA priorities. Angola needs to recover not only from the war, but also from the paternalistic approach to economic management that was inherited from the colonial era. In order to jump-start the economy and set it on the path to sustainable growth, it must shift from state-controlled economic policies to an open market-oriented economy. After three decades of devastating war characterized by authoritarian regimes and statist economic policies, the road ahead is long. With an abundance of natural resources, however, Angola's long-term economic potential is promising. The extent to which the country succeeds will depend overwhelmingly on the nature of the economic policies that the GOA elects to pursue.
In FY 1995, USAID provided funding for a four-year Agricultural Area Clearance Project that is aimed at resettling displaced populations, demining agricultural land, and rehabilitating agricultural and health care systems. Solid progress has been made toward meeting established targets of the project, despite the early stage of implementation. Agriculture and health infrastructure rehabilitation will continue to be high priorities for development projects, particularly in rural communities where quartered troops, resettled persons and refugees, and demobilized soldiers will be concentrated. In addition, assistance for displaced children and orphans, other war-affected children, and for victims of landmine accidents will continue to be a high priority in USAID's program.
A grant of $2 million was recently awarded to the Christian Children's Fund of Richmond, Virginia to support a three-
year, five province program which trains adults to: (1) identify symptoms of psychological and social distress in children, including post traumatic stress disorder; and (2) provide participants with the necessary skills to be able to interact with traumatized children and conduct activities which will assist in their return to normal emotional growth and social adjustment. The impact and importance of this project has received very high marks from technical experts, international agencies including United Nations Children's Fund, and the GOA.
Other Donors.
The U.S. Government and the international donor community pledged approximately $1 billion at the Angola Roundtable in September 1995. The funds are to be spent over 1996-1997 on community rehabilitation and national reconciliation projects. The United States is the largest provider of bilateral assistance to Angola. Other major contributors include: the European Commission, the UN World Food Program, the UN Development Program (UNDP), other UN agencies, the World Bank, African Development Bank, the International Fund for Agricultural Development, France, the Netherlands, Sweden, Italy, Norway, Portugal, and Germany. Donor coordination of activities and resources is a priority for the assistance strategy for Angola.
FY 1997 Program.
The first eighteen months of USAID's five-year transitional strategy for Angola focus on the transition from emergency relief and humanitarian assistance to more traditional sustainable development activities. As peace and stability return to Angola, emergency humanitarian and transitional assistance will progressively be phased out, as programs that address Angola's long-term development needs are launched. For instance, USAID support for agricultural rehabilitation activities will reduce food aid dependency. Likewise, USAID's Office of Foreign Disaster Assistance started to reduce its emergency relief support through non-governmental organizations (NGOs) in Angola due to decreasing humanitarian needs, and anticipates a major, if not total, phase-out by mid- to late FY 1997, if peace continues to hold. On the other hand, USAID's Office of Transition Initiatives plans to continue its transitional aid to the Angolan peace process in FY 1997, with further assistance for demining, demobilization and quartering of troops, and revitalization of rural communities essential to returning refugees and demobilized soldiers. In FY 1997, the Office of Transitional Initiatives plans to allocate up to $8 million for Angola. As the peace process holds and national reconciliation begins to take shape and solidify in Angola, the Africa Bureau will, selectively, take over funding of non-governmental organization (NGO) programs that are currently being supported by the Office of Foreign Disaster Assistance as they make the transition from emergency to development activities. In support of Angola's rehabilitation program to generate broad-based economic growth, resources will be budgeted to fund NGO activities such as: resettlement and reintegration; agricultural production, including the distribution of seeds and tools; and health and immunization programs. Support to Angola's private sector is an important element in transforming the country from a closed, totalitarian-oriented, centrally planned economy to an open, free-market economy. This will be fundamental in building a stable and peaceful society based on democratic principles and ideals. Funds will be allocated to private sector development and technical assistance for macro-economic reform. In addition, development funds will be spent to further the conflict resolution and democracy building activities begun in FY 1996, and fund human rights activities. It is anticipated that USAID will continue the important projects that are helping thousands of war-affected children and continue providing assistance to disabled soldiers and civilians, such as provision of much-needed prosthetics for amputees from landmine accidents. Strong emphasis will be placed by USAID on working as partners with the international donor community for all objectives, with a view of playing a leadership role in leveraging other donors' resources to support Angola's rehabilitation and reconciliation program. USAID will also look to the leaders of Angola, caretakers of a country endowed with immense resources, to re-direct a progressively increased amount of both human and financial resources, no longer needed for military purposes, to meet the development needs of its people.
Agency Goal: Building Democracy
Angola has been embroiled in civil war, with only one respite, since its independence in 1975. A peace accord signed in May 1991 provided for the country's first multi-party elections in September 1992. Unfortunately, UNITA, which was the losing party, refused to accept the election results and resumed fighting. With the signing of the Lusaka Protocol in November 1994, the GOA and UNITA again officially declared an end to the long-running civil war which has devastated as well as deeply divided the country. The United States has been a principal player in Angola's quest for peace, and USAID's strategy provides support for key elements of the peace process as well as support for the country's transition to a stable, democratic society and political system.
In addition to continued U.S. support for the United National Angolan Verification Mission III peacekeeping mission, USAID is providing grants to NGOs which are responsible for supporting five of the 15 UNITA quartering areas, as well as 5,000 metric tons of food commodities for quartered troops, and projects to assist demobilized soldiers to reintegrate into civil society. Economic Support Funds (ESF) will be used primarily for democracy/governanceactivities and community revitalization efforts. Grants for journalistic training, and to document success stories of conflict resolution and reconciliation of Angolans throughout the country have also been approved. A grass-roots level program of training trainers in conflict resolution techniques will soon begin, and another project designed to promote national reconciliation, political party building, and training of parliamentarians in the National Assembly in democratic values and procedures will also begin in FY 1996. Other planned activities to support Angola's transition to a peaceful and democratic society include broad-based civic education and human rights projects. USAID hopes to fund other creative, consultative efforts in this domain as opportunities present themselves, and as funds are available.
Agency Goal: Encouraging Broad-based Economic Growth
Thirty years of war have destroyed the country's physical and economic infrastructure, debilitated the health care system, and displaced a large portion of the population. Land mines continue to injure innocent victims, restrict resumption of agricultural production, and impede movement of people, goods, and the delivery of humanitarian assistance. The GOA is faced with tremendous macro-economic problems and a weak private sector. USAID's objectives in support of broad based economic growth in Angola focus on population resettlement, community rehabilitation, macro-economic reform, private sector development, and trade and investment opportunities.
Also, in FY 1995, USAID initiated a $500,000 Angola Agricultural Recovery Program that focuses on increasing farmer productivity for staple food crops through agricultural technology development and transfer. This project, which promotes the rapid recovery of food production systems in Angola, is being jointly implemented by the Consultative Group on International Agricultural Research and the NGO community. For the Consultative Group on International Agricultural Research, the lead center providing technical expertise for this project is the International Crops Research Institute for the Semi-Arid Tropics, and the lead implementing NGO is World Vision. Already, 28 varieties of maize and a small number of other crops have been planted for testing and preparation for seed multiplication.
Macro-economic reforms are critical to the successful accomplishment of the GOA's development goals, as defined in its Community Rehabilitation and Reconciliation Program, as well as its objective to transform its economy to a market-oriented system. These reforms are also necessary to create an economic environment that is conducive to foreign trade and investment. In FY 1996, USAID will begin projects to provide economic technical assistance and training to key ministries, and to establish a base of economic data that will increase transparency of public sector spending activities as well as provide a basis for sound economic policy decision-making.
An IMF/World Bank-sponsored structural adjustment program for Angola will almost certainly require a commitment on the part of the GOA to sustainable, market-oriented economic development in which the private sector plays a key role. Accordingly, development of the private sector is one of USAID's objectives in promoting broad-based economic growth in Angola. In addition to training small and medium enterprise entrepreneurs and trade or business associations, USAID will conduct studies of: franchising feasibility, improving access of small and medium enterprises to start-up capital, and helping the GOA move toward the development of a privatization plan.
Agency Goal: Providing Humanitarian Assistance
The chief goal for the FY 1997 P.L. 480 Title II food program will be to reduce general food distribution while continuing to provide resettlement packages and food for work activities that facilitate reintegration of returnees (displaced, refugees, and ex-combatants) to communities. Food for work activities will continue to focus on agricultural rehabilitation and improved household nutrition.
Since FY 1985 - 1996, PL 480 Title II assistance, via USAID's Food for Peace Office, has amounted to $195.5 million dollars (357,218 metric tons of food) for Angola. Emergency food assistance has been provided to over two million war effected Angolans directly through PVO partners and the World Food Program.
As emergency food aid to Angola has decreased, PL 480 Title II food aid has been channeled through American PVOs to improve household food security and agricultural rehabilitation.
|
Encouraging Broad-based Economic Growth |
Stabilizing World Population Growth & Protecting Human Health |
Protecting the Environment |
Building |
Providing Humanitarian Assistance |
TOTALS |
|
|
USAID Strategic Objectives |
||||||
|
1. Assist the Government of Angola in Carrying Out Its Rehabilitation Program by Continuing to Provide Support for Resettlement and Rehabilitation Activities, in Particular, Its Agricultural Production Programs and Basic Health Infrastructure Projects - Dev. Fund for Africa -Economic Support Funds -P.L. 480 Title II |
4,355,744 |
3,712,107 |
285,612 |
7,000,000 |
22,000,000 |
8,353,463 |
|
2. Promote Angola's Transition From a Devastated, War-torn Country to a Stable, Peaceful and Democratic Society - Dev. Fund for Africa -Economic Support Funds - P.L. 480 Title II |
|
2,110,039 |
2,473,000 |
2,110,039 |
||
|
3. Stabilize Macro-Economic Conditions in Angola, Foster Private Sector Development, and Create an Enabling Environment to Encourage Foreign Trade and Investment - Dev. Fund for Africa |
2,000,000 |
|
2,000,000 |
|||
|
Totals - Dev. Fund for Africa - Economic Support Funds - P.L. 480 Title II |
6,355,744
|
3,712,107 |
285,612 |
2,110,039 10,000,000 |
|
12,463,502 10,000,000 24,473,000 |
Office of Southern African Affairs: Wilbur Thomas
PROGRAM: ANGOLA
TITLE NUMBER: Assist the GOA in Carrying Out Its Rehabilitation Program by Continuing to Provide Support for Resettlement and Rehabilitation Activities, in Particular, Its Agricultural Production Programs and Basic Health Infrastructure Projects, 654-S001
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $8,353,463 DFA; $7,000,000 ESF; $22,000,000 P.L. 480 Title II
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2000
Purpose: To gradually reduce humanitarian food aid while concurrently engaging in quick-impact community rehabilitation projects, especially agriculture and health infrastructure rehabilitation, in rural communities where the quartering of troops and the resettlement of displaced persons, refugees and demobilized soldiers will be concentrated. Continue to provide assistance to war-affected children and victims of landmine accidents.
Background: Three decades of civil war in Angola left the economy devastated and the vast majority of the population in poverty. The war claimed over 500,000 lives and left over 3.0 million Angolans homeless. The annual inflation rate spiraled into 4 digit figures. Despite a wealth of natural resources, gross domestic product per capita declined from an average of $820 between 1986-88 to $410 in 1995. More than 70% of Angola's population is considered to be food insecure. The Ministry of Health estimates at least 20% of infants have been malnourished every year since the mid-1980s. Poverty and food availability are directly correlated to economic infrastructure and accessibility to markets. A formidable challenge facing the Government of Angola (GOA) is to restore the confidence of the people, and promote economic development and growth in rural areas. Notwithstanding the above, for FY 1997 P.L. 480 Title II food program will be provided at a reduced level while continuing to provide resettlement packages and food for work activities that facilitate reintegration of returnees to their communities. The provision of basic social and economic infrastructure throughout the country is essential to successfully meet this challenge. USAID's development objective is to work closely with the GOA in promoting economic growth at the community level.
USAID Role and Achievements to Date: The success of resettlement and development rehabilitation projects will be closely tied to: 1) the accomplishments of ongoing USAID projects in meeting the critical, life-threatening needs of the population through health and feeding programs; 2) demining and mine awareness activities; and 3) the provision of food security as displaced Angolans leave urban areas to return to their rural communities.
In FY 1995, USAID funded a four-year, multi-faceted Agricultural Area Clearance Project, implemented by Save the Children/U.S. The project is comprised of four principal components: (1) resettlement of displaced populations; (2) demining of agricultural land; (3) agricultural rehabilitation; and (4) health system rehabilitation. USAID provided humanitarian assistance to support primarily the resettlement and demining components whereas USAID has provided FY 1995 development assistance funds for the rehabilitation of the agricultural and health sectors. Steady progress has been achieved in meeting established targets despite the relatively early implementation stage of the Agricultural Area Clearance project, the Africa Bureau's first major effort in this area. Five of the eight health staff have been recruited in the first phase of the project. Of 6,583 displaced persons, refugees and war affected families targeted for resettlement, 4,444 have been resettled and seed and tool packs have been distributed to all of them. Another 6,715 families that were not previously targeted have received seed packs; and 1,456 women and children have been vaccinated.
Description: As USAID proceeds in phasing down P.L. 480 Title II and other humanitarian assistance to Angola, USAID Africa plans to step up its development assistance support for the non-governmental organization- implemented activities geared at resettling displaced persons, reintegrating demobilized troops into civil society, addressing the food security needs of the rural population by assisting in agricultural production and distributing seeds and tools, and supporting the rehabilitation of basic rural health infrastructure and programs. In addition, projects assisting war-affected children and victims of landmine accidents will be continued through funding from the Displaced Children and Orphans Fund and the War Victims Fund.
Host Country and Other Donors: USAID development assistance activities have been coordinated closely with Save the Children/Holland; the European Union via Save the Children/UK; Norwegian People's Aid, German Agro-Action,and the World Food Program. The GOA developed a Community Rehabilitation and National Reconciliation Program. Projects for this two-year program are being funded by the GOA and the international community.
Beneficiaries: Rural families and communities, resettled populations, demobilized soldiers, war-affected children, and victims of landmine accidents.
Principal Contractors, Grantees, or Agencies: Save the Children/US, International Crops Research Institute for the Semi-Arid Tropics, World Vision, and Christian Children's Fund. Other partners are expected as the program evolves.
Major Results Indicators:
Baseline1/ Target 1
Agricultural Area Clearance Project:
Number of agriculture rehabilitation, health, TBD TBD
and food staff recruited
Number of persons resettled TBD TBD
Number of seed and tool packs distributed TBD TBD
Number of fisheries groups identified TBD TBD
Number of fisheries kits distributed TBD TBD
Number of rural clinics rehabilitated TBD TBD
Number of essential drug kits distributed TBD TBD
Number of women and children vaccinated TBD TBD
Christian Children's Fund:
Number of adults trained to identify and TBD TBD
assist traumatized children
Number of children who receive assistance TBD TBD
Angola Agricultural Recovery Program:
Number of seed and tool packs distributed TBD TBD
Amount of adapted seed varieties tested, TBD TBD
multiplied and distributed
Number of Angolan agronomists, technicians, TBD TBD
extension agents and farmers trained in the use
of the improved technology
Other Projects:
Number of technicians trained to TBD TBD
provide prosthetic assistance
Number of prosthetics produced within country TBD TBD
PROGRAM: ANGOLA
TITLE NUMBER: Promote Angola's Transition from a Devastated, War-torn Country to a Stable, Peaceful and Democratic Society, 654-S002
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $2,110,039 DFA; $3,000,000 ESF; $2,473,000 P.L. 480 Title II
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2000
Purpose: To promote conflict resolution, national reconciliation, human rights, civic education, political party building, parliamentary training and reintegration of displaced populations and demobilized troops.
Background: This strategic objective seeks to further the peace process, including the Lusaka Protocol goal of national reconciliation, and provide training and institution-building capacities for a democratic society and political system. Although the country is moving along the path to a more durable peace, the difficult reality of twenty years of civil war, the failure of a previous peace accord after open elections were held in 1992, and the lack of trust between the two major groups who must work together in establishing a democratic political system, must be acknowledged and overcome. The National Union for the Total Independence of Angola (UNITA) must transform itself from a military machine to a political party, and former combatants must learn to work side by side in a democratic government of national unity. Displaced persons and demobilized soldiers must be reintegrated into civil society, and respect for democratic values and human rights must be developed.
USAID Role and Achievements to Date: The United States has been a principal player in the quest for peace in Angola, demonstrated by its active involvement in the peace treaty negotiations, continued support for humanitarian relief and the United National Angolan Verification Mission III peacekeeping mission, and continued application of diplomatic pressure on both the Government of Angola (GOA) and UNITA to meet their commitments in the Lusaka Protocol. So far, specific USAID activities have centered around the demobilization and quartering of UNITA troops, and grants to NGOs to assist in preparing demobilized troops to reintegrate into civil society. USAID has provided grants to Voice of America and Search for Common Ground to provide journalistic training and better reportage of events by both sides, and to provide TV and radio examples of successful instances of conflict resolution and reconciliation among Angolans throughout the country. Sustainable development activities which have been approved, but have not yet begun, include a $190,000 grant to the Conflict Management Group of Cambridge, Massachusetts to provide training in conflict resolution techniques at the grass-roots level, including church groups, NGOs and community leaders. The International Republican Institute will soon begin a $2 million, 2-year project, to promote national reconciliation, political party building and training of parliamentarians in the National Assembly.
Description: Principal activities supporting this strategic objective include conflict resolution, national reconciliation, political party building, parliamentary training, and reintegration of former troops into civilian society. Other planned activities include broad-based civic education, and human rights projects.
Host Country and Other Donors: While the GOA, UNITA, and other donors are working to further the peace process as a whole, the United States is the first country to develop specific democracy and governance projects for Angola.
Beneficiaries: Angolans in both the public sector, including the GOA and UNITA, and civic society.
Principal Contractors, Grantees, or Agencies: Voice Of America, Search for Common Ground, Conflict Management Group, and the International Republican Institute. USAID envisions other partnerships as the program evolves.
Major Results Indicators:
Baseline1 Target 2/
Number of conflict resolution trainers trained TBD TBD
Number of participants and represented groups TBD TBD
participating in national reconciliation working
groups
Viable policy recommendations emerging from TBD TBD
national reconciliation working groups
Increased discussion and dialogue among TBD TBD
the different political parties
Number of National Assembly parliamentarians TBD TBD
trained
Increased knowledge by the parliamentarians TBD TBD
of democratic values and procedures
Improved organization of political TBD TBD
parties at the national and local level and their
increased knowledge of democratic political
procedures
PROGRAM: ANGOLA
TITLE NUMBER: To Stabilize Macro-Economic Conditions in Angola, Foster Private Sector Development, and Create an Enabling Environment to Encourage Foreign Trade and Investment, 654-S003
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $2,000,000 DFA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2000
Purpose: To provide economic training and technical assistance to the Government of Angola (GOA) as it develops and begins implementation of a structural adjustment program, commences privatization of state-owned enterprises, and creates an environment conducive to private sector-led trade and foreign investment. To assist in the establishment of a data base of economic and financial information to increase transparency in GOA transactions and provide information for sound policy decision-making. To foster private sector development through training and technical assistance for small and medium enterprise entrepreneurs and business or trade associations, and by conducting appropriate studies concerning franchising feasibility and improving their access to capital.
Background: Over the past year, inflation reached an annual rate of 3,700% and in 1995, the deficit was 22.5% of gross domestic product. Restrictions on exports, price controls and subsidies adversely affect Angola's economic performance. The country debt has soared to $11.2 billion, and state-owned enterprises continue to dominate the business sector. In December 1995, the International Monetary Fund (IMF) suspended its staff-monitored "shadow" program for Angola due to the failure of the GOA to implement agreed-upon structural adjustment measures. The shadow program was designed to permit the GOA to establish a track record of macro-stabilization efforts convincing enough to allow the IMF to negotiate a multi-year Enhanced Structural Adjustment Facility funding program in early 1996. As a result of the suspension of the IMF monitored program, USAID technical assistance to the GOA to address the chronic macro-economic difficulties of the country is more critical than ever.
The success of a technical assistance program for macro-economic reform will depend on a lasting peace in Angola, and the political will of the GOA to follow through with the necessary economic reforms. The success of a private sector development program depends in large part on the creation of an economic environment that is conducive to economic recovery and growth, as well as the access to capital by entrepreneurs of small and medium enterprises. USAID contends that a jump-start is all that Angola needs to stabilize its macro-economic conditions, if sufficient political will exists to follow through. Angola has the resource base for strong economic growth and increased trade and investment, but first it must dramatically improve the economic environment.
USAID Role and Achievements to Date: There are currently no USAID-funded economic reform or private sector development activities in Angola.
Description: Beginning in FY 1996, planned activities include training and economic technical advisory support for key ministries, and development of a credible economic data base, which will promote more transparent and sound GOA economic policy and reform decisions. Training for small and medium enterprise entrepreneurs, and business or trade associations, will be part of the initiatives undertaken in support of private sector development in Angola. In addition, studies for the feasibility of franchise development, and access for small and medium enterprises to capital, will be conducted.
Host Country and Other Donors: This activity will be coordinated with the International Monetary Fund, World Bank, and United Nation Development Program. Since 1993, the UNDP has been providing assistance to the GOA, implemented through the World Bank, to address the country's macro-economic problems.
Beneficiaries: GOA economic policymakers, small and medium enterprise entrepreneurs, trade and business associations, foreign traders and investors in Angola.
Principal Contractors, Grantees, or Agencies: Funding for projects has not yet been awarded.
Major Results Indicators:
Baseline3/ Target 1
The establishment of a research unit TBD TBD
to collect economic and financial data
Number of participants in training programs TBD TBD
for small and medium enterprise entrepreneurs
Number of business and trade associations TBD TBD
which receive training
Completion of the private sector TBD TBD
development studies
The placement of economic technical advisors TBD TBD
Formalization of a privatization plan of TBD TBD
state-owned enterprises