August 31, 2007

Cabinet approves strategy for privatisations / Country attains high economic growth

Angola is planning to privatise many of its more than 250 state-owned firms, but there are fears that the process could be marked by cronyism and cement the oil-rich nation's reputation as one of Africa's most corrupt. Angola's secretary of state for public enterprises said there were too many state-owned companies and that some, especially those that were poorly run, should be sold to investors or liquidated. "We need to reduce the complexity of the public sector. We need a new privatisation policy, keeping only companies that are essential for the state - the sector needs to be more hygienic and easier to run," Augusto Tomas said.
Some areas of the economy have already been privatised, independent banks and insurance companies have emerged in recent years and a private mobile telecommunications company has taken a large share of the burgeoning cell phone market. Tomas noted that most state-firms were operating at a loss and that many were characterised by corruption, lack of transparency, bad management and loose accounting practices. "The situation isn't very good, but it is also quite delicate. We need to do a very profound, extensive job to try to restructure state companies," he said. "We want to eliminate the kinds of problems which exist. Angola must be a normal country."
Angola's cabinet has approved a strategy to restructure the state-run economy, with new laws governing state companies and privatisation expected to come into effect by the end of 2007. Public firms have been given 60 days from July 30 to provide accounting and other information from 2004 to 2006. Tomas said the government would tread carefully in the privatisation arena. "We don't plan to wash our hands with chaos but rather to implant a new order," he added. But observers said Angola, widely regarded as one of the least transparent economies in the world, had already demonstrated that it was not committed to an open privatisation process. "Only certain private investors are allowed in. The process is not an open process in any sector," said a Luanda-based foreign executive. "It is controlled by those wanting to expand the patronage system into a private format," he added.
Before, a report has been published which shows that Angolan the country’s economy has performed extremely well in 2006, recording 18.6% which is far more than most African countries. More than 308,000 new jobs were created in diverse sectors. This figure is expected to shoot up in 2007 when several new projects have been in full swing. Though agriculture proves to be the country’s biggest employer, yet it received less than 1% [0.82%] investment. The social and construction sectors became Angola’s second biggest employers. The non-oil economy grew by 25.70% compared to 14.7% in 2005. Transformation industry performed extremely well after grew by 44.7% while that of construction industry 30%. As a direct result of the country’s healthy economic growth rate, per capita GDP rose from US $1,985 in 2005 to US $ 2,565 in 2006.
Angolan authorities linked the majority of the healthy economic performance to a better management of the budget policy in 2006. This resulted to a surplus in the country’s gross domestic product from 8.5% in 2005 to 16.7% last year. The country also recorded a positive cash balance of 11.5%. With the creation of several new projects, including the US $80 million kitchen gas line, parking lot and fuel reservoirs by Sonangol invested this year, had provided security for Angolan economy. The project will install a gas facility in the fishing city of Porto Amboim and supply the municipalities of Sumbe, Gabela and other neighboring areas. It will have the capacity to store 100 metric tons and supply 3,000 bottles a day.
A new power and water supply network is being built by the government of the southern Huila Province in Jau Commune. The project, which began in early August, forms part of the public investments programme for the 2007/2008 period. The project will include the installation of a set of generators, with the capacity of 75 kva, which will benefit 17,500 people. (rts/afrolNews)

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