24 Feb Interview with Mário João, Minister of Economy & Planning, Republic of Angola
BF: Congratulations on being awarded the Special Award of Public Service Excellency by the African Leadership Magazine in New York on the 21st of September. What is the importance of this award for you and for the country?
Mário João: Thank you very much. Indeed, the award is a big reward, and, above all, even before its importance for me, the name of Angola appeared in the headlines and in the world. Therefore, we have an opportunity to tell our story. Angola is in a transformation process, substantial transformation, and we want to tell our story as much as we can. Personally, it was a challenging year. We ended the process to make the elections in less than twelve months, and we started a program that has been forgotten for a long time, the program of recovery for the informal economy.
Moreover, with the effort of all my colleagues — of my institution, of other ministries´ departments, and even with the effort of the private sector — we had the opportunity to start a good program, and, with the combination of all that work, thus we were awarded, not keeping aside international partners like the EU, African Development Bank and the PNUD that helped us in the operationalization.
BF: What is your most important target for 2023?
Mário João: My biggest target for 2023 is to finish, at a convenient time, the National Development Plan. This plan will be the engine and the catalyst for everything that we are planning to achieve for the next five years. The sooner we end the better because we will achieve common targets for common problems. So, this is my aim target. Once I finish, I have other targets which also concern the execution of the National Development Plan. First, is the pursuit of the formalization of the informal economy, with a strong sustainable component. The end of this program may convert into tax enlargement and, contributively, to social security.
There are other targets about prudence and sustainability: we are creating a market. Regarding prudence, the focus will be on internationalization, which was something we did not accomplish as we would have liked to in the last year. It was not feasible; we did not have the experience. We want to create a demographic dividend strategy. Angola’s population is growing by 3% yearly; that is approximately one million Angolans per year. Therefore, we need a strategy for the demographic dividend that could tell us which actions, activities or initiatives the government should do to accommodate this demographic boom, because Angola has a low population density and this can end up being a problem.
BF: You are used to talking about decentralization. Can you explain a little about that?
Mário João: Decentralization has been happening for the past ten years, but much more intensively in the last five. In the last five years, we felt more the decentralization in the services. For example, we talked about PREI and PRODESI. These are activities that must be carried out by the provincial governments, and they are updating to the point they can keep track of those kinds of initiatives. All of this is going to culminate with the promise of making municipality elections in the country. Therefore, from the point of view of the government, everything is starting to culminate in getting ready for the municipalities’ elections and bringing the municipalities to the life of our citizens.
BF: How challenging is investing in Angola?
Mário João: Well, investing in Angola, has some challenges. Classic challenges are, naturally, normal in Africa, in terms of the bureaucracy of the public sector. We are keeping track of these measures so we can identify and eliminate the bureaucratic obstacles and the excessive governmental presence in the business. For that, our ministry of economy and planning is responsible for the agenda to improve the business environment in the country.
In the last five years, we decided to create an agreement with the World Bank to help us to eliminate the most obstacles possible, starting from the report “Doing Business.”
This report was not published after 2021 because of various reasons, but we did not stop working closely with the public sector for business environment improvement. It is not only the public sector with the executive power, but also the public sector with the judicial power; namely the courts, because we know that the courts are important for the execution of contracts or the domain of insolvencies.
We need to find synergies to create a more predictable and transparent environment. The judicial department has been working with us to elaborate fast measures and has been especially transparent through information technologies like websites. There are other domains that we are working on. For example, the implementation of the Bureau of Credit, which will implement every piece of information about the discipline, the financial maturity of the financial operators, strengthen the commercial banking system, and ensure the credit for the real sector.
On the other hand, we have a necessity to improve the institutional capacitation, the economic operators´ capacitation, and the labor capacitation in Angola. We know that American companies are very sophisticated and very demanding and have as their main concern the hiring of labor through the lens of productivity. Productivity is a result of know-how and capabilities to make certain tasks. We have been working on these topics, working closely with the National Institution of Micro, Small, and Medium Enterprises.
BF: Can you tell us about the relationship between the ministry and AIPEX?
Mário João: AIPEX is our operational organ designed to attract foreign direct investors, but especially to encourage the private sector to invest nationally. AIPEX is one of those institutions that is present in a lot of countries, that are attracting not only direct foreign investment but also promoting the export of Angolan products. This is for the final consumption or intermediate consumption in the value chains regionally and internationally. Because of AIPEX, we have been promoting international events where Angola can tell its story.
Indeed, Angola is in the process of changing its paradigm to being a direct state, to help stop corruption in the country, making everyone equal in the eyes of the law. As well, there is a change in the paradigm as we promote national productivity. Angola is looking to embrace its comparative advantages and make products that are consumed at home as well as abroad. For example, in two days we are organizing the first Expo in Angola, between the 7 and 11 of December. There we will show our work in creating a market for national production not only for final consumption but also for intermediate consumption. Therefore, we encourage foreign investors that might have an interest in investing in Angola to come. We have institutions to shelter every initiative, starting with AIPEX. AIPEX is concerned about the operational impact, while the Ministry of Economy and Planning is concerned about the strategic impact. In 2021, the ministry, for example, changed the private investment law. The ministry works with AIPEX in a close relationship. Of course, American investors are encouraged to come. The country has some target sectors which would like to see American investment take over, but the investors are free to invest in every domain they would like because investing in Angola is not necessary to invest in the national market. Angola is part of the Regional Economic Integration Process, and they can use Angola to produce products to be consumed by neighboring countries.
BF: In your opinion, which industries would you like to see American investment in, and what are the expectations for the next years?
Mário João: Well, the main sector where the government would like to see more foreign investment, or even national investment, is agribusiness. We believe agribusiness has been the main engine of that changed paradigm and is the principal engine for the economy’s national diversification. When we talk about agribusiness, we include agriculture, livestock, fishing and regional commerce.
This commerce comprises of the removal of the rural domain to the urban domain, and we also include the transformation of all these products. After agribusiness, we would like to see investment in industry, transforming raw materials, like the derivates of petroleum and mining exploration. Some mining explorations are essential for agribusiness, for example the extraction of limestone helps us to correct the soil for agriculture to improve productivity. We cannot leave aside economic digitalization. We know that disruptive technologies came to stay, these being known as the fourth industrial revolution.
Other industrial revolutions came to accelerate development. We had the industrial revolution because of electricity, then steam power, and lastly digitalization. Today, with the disruptive technologies, we can have a start-up that can become a millionaire enterprise within twelve months. The fourth industrial revolution will make more youth create their own companies and have an impact on the market.
Another sector important for us is healthcare, namely the production of medicine. The production of generic medicines is not only for human consumption but also for animal consumption. And of course, when we talk about medicines, we also refer to vaccines. All of this is a focus for the government to make the country self-sufficient in medicine production. We cannot forget about the potential for renewable energies: between 60% and 70% of the entire electric energy produced is from renewable energies, solar, hydric, and natural gas. Therefore, we will continue with that tendency, looking to change the electric energy from thermal sources to solar sources in places where we cannot produce energy through hydric sources.
These are the important topics that can be achieved through American investment in Angola. Agribusiness can be also a source of energy, for example, in the production of sugar cane. When burning the sugar cane residue, we can produce energy. We can use agribusiness for producing renewable energies. Without a doubt, Angola owns approximately 5% of the hydric resources in the world. And we have a low population density, especially in the east, with almost 30 people per square meter. There, we also have frequent rainfall, and the plains have fertile soils conducive to mass agriculture exploration. Moreover, without putting aside the security inside the country, security is very important. There may exist countries with better technological potential, but with more crime and less security.
BF: What about the wide coast and fishing potential: could you explain the industry targets?
Mário João: There is a domain that I did not mention which is the touristic domain with a focus on the blue economy. It is a world where Angola has enormous potential, and everything could result in a business opportunity. We have 1,600 kilometers of coast; one-third of our economic area is in the sea. Therefore, this area is explored basically for the fishing, transport and oil sector. There are a few sectors, from 15 to 20, that you can explore in the sea. Angola has a certain self-sufficiency.