Statement of the U.S. Representative,
as delivered by Deputy Chief of Mission, Christopher Wilson
September 22, 2015
A warm welcome to the Minister of Commerce, and the entire Angolan delegation.
The United States has a strong trade relationship with Angola, one that – like Angola’s economy – is dominated by energy and energy-related industrial products such as oil machinery and mining equipment. Overall, the United States is one of the largest markets for Angola’s exports as well as imports. In addition, the United States has several programs underway to assist in the sustainable development and diversification of Angola’s economy. Notably, Angola has been eligible for benefits under the African Growth and Opportunity Act since 2004 and the US Agency for International Development has several projects to support private sector growth, stimulate investment in export-oriented companies, and strengthen Angola’s commercial laws.
Angola is rapidly rebuilding after 27 years of civil conflict that ended in 2002; however, the development challenges facing the country remain daunting. While progress has been made towards implementing policies aimed at reducing poverty, living standards for the general population remain low and the challenges of reconstruction continue. We welcome, during the course of this review, an update on progress being made with respect to the government’s extremely important Poverty Reduction Strategy, especially the two dynamic engines of economic growth – education and good governance.
Angola has experienced rapid rates of growth, but the formal economy is overwhelmingly dominated by the oil sector, which accounts for more than 98 percent of Angola’s merchandise exports, yet only a small share of its employment. Therefore, even high rates of economic growth do not necessarily translate into higher living standards for the general population. Moreover, with the downturn in the global petroleum market, and the resulting significant downward impact on Angola’s budget, we are pleased that economic diversification is a strategy the Angolan government is pursuing with renewed vigor. The progress made in recent years to develop the non-oil economy has served Angola well; the difference in Angola’s ability to cope with the downturn in oil prices is markedly improved from what it was in 2008 thanks largely to this diversification. The next step in Angola’s growth will be to harness the revenues from oil production and mineral extraction to generate growth in other sectors of its economy. The challenge of diversification is a difficult one to manage, and when the energy sector is involved there is a premium to be placed on good governance. During this review, we would be interested in learning more about Angola’s plans for economic diversification, the policies for managing it, and on the sectors where there may be promising growth potential.
In January, Angola announced new protectionist import quotas on a limited set of products aimed at protecting domestic production. Such a policy is rarely successful, and we are pleased that Angola announced in April that it would not implement the quotas, effectively suspending them. During this review, we would like to learn more about Angola’s planned use of import substitution and the timeframe in which the government believes such measures may be necessary. Our objective, in part, is to ascertain if these intended measures are in compliance with Angola’s WTO obligations and commitments.
The Central Bank has also limited the availability of foreign exchange to firms that need to pay for imports and repatriate profits. We would like to learn more about Angola’s plans for normalizing the auction of foreign currency.
On another general issue, namely, the state’s participation in the economy, there have been some positive developments, although more will be needed to promote growth in new economic activities. Previous accomplishments include publication of a consultant’s report on ways to improve management of the oil sector, the creation of a special fund to absorb the windfall gains from high oil prices, and a new requirement that the parastatal oil company and the Central Bank be subject to annual external audits. We look forward to seeing more progress in the area of privatization, and in this review we would welcome an update from Angola on its current and future plans for promoting privatization in different sectors of its economy.
In closing, the United States looks forward to expanding its trade relationship with Angola, and we see many positive developments that – with time and persistence – may help to usher in a better future for the Angolan people. Our questions – with respect to Angola’s general policy directions and on specific issues such as customs procedures, intellectual property rights, and subsidies – all reflect a genuine interest in learning more about Angola’s reconstruction and its efforts to make its trade and economic regime more efficient, transparent, and consistent with WTO principles. In this regard, we would join other speakers in encouraging Angola to move forward with notification of its Category A commitments under the Trade Facilitation Agreement, and of course, with submission of its instrument of acceptance for the Trade Facilitation Agreement.
We thank you for your attention, and we wish Angola an informative and successful review.