IMPROVING ANGOLA'S INVESTMENT CLIMATE

C O N F I D E N T I A L LUANDA 000017 WASHINGTON: ALSO FOR USTR GABORONE: ALSO FOR TRADE HUB E.O. 12958: DECL: 01/09/2019 TAGS: ECON EFIN EINV ETRD AO SUBJECT: IMPROVING ANGOLA'S INVESTMENT CLIMATE Classified By: Ambassador Dan Mozena for Reason 1.4 (b) and (d). ¶1. (C) Summary: During a January 7 meeting with Ambassador Mozena, President Dos Santos's recently designated pointman for improving Angola's investment climate, Aguinaldo Jaime, acknowledged that corruption is a significant barrier to attracting investment to Angola. In his role as chairman of the GRA commission overseeing the restructuring of Angola's National Association of Private Investment (ANIP),Jaime is crafting a comprehensive strategy to make Angola more appealing to investors. The Ambassador offered suggestions on how Angola and ANIP could better meet the needs of American business looking for opportunities in Angola. Jaime said his commission hopes to present its recommendations to President Dos Santos in March. End Summary. ¶2. (SBU) The Ambassador's January 7 discussion was at the invitation of Aguinaldo Jaime, who was the head of Angola's economic team before assuming his current responsibilities late last year. Jaime solicited the Ambassador's views on how best to address the needs of foreign investors looking for opportunities in Angola. The conversation was frank and wide ranging. Jaime thanked the Ambassador for the Embassy's continuing engagement with the GRA on improving the investment climate, noting that Prime Minister Paulo Kassoma had passed to him a read-out of his (Kassoma's) earlier meeting with the Ambassador, when the two had discussed improving the investment climate to attract U.S. non-oil businesses to Angola. -------------- Ah yes, the facilitation fees -------------- ¶3. (C) When Ambassador Mozena raised concerns by U.S. investors over corruption, Jaime paused and said, "Ah yes, the facilitation fees." He told of his struggles with old guard thinking within the GRA by which individuals used their positions of power to frustrate investors until "facilitation fees" are paid. Jaime said the issue is difficult to tackle due to the vested interests of those who benefit from the status quo, but he, nonetheless, believed he was making progress in tackling the problem. Jaime said it will take time to change the environment in some ministries, adding, "You can be right, but only when it is the right time." While he did not identify any particular ministry on corruption, Jaime shared his frustration with the Ministry of the Interior and its continued excessive focus on national security over business facilitation. Jaime said a key goal of his revamped ANIP is the elimination of direct investor interaction with other ministries or offices, thus avoiding the places where corruption often takes place. -------------- Visas and the Airport -------------- ¶4. (SBU) The Ambassador raised visas as a major deterrent to potential investors, and suggested that Angola either exempt investors from needing visas, facilitate visa issuance for investors, or issue them at the airport upon arrival in country. He also suggested that ANIP staff a welcome desk in the airport's international arrival area to facilitate immigration, hotel arrangements and local transportation for businessmen. Jaime responded positively to the suggestions, and was especially interested in the idea ANIP's offering a fee for service package that could include visa facilitation, airport transfers, and the booking of hotel rooms. -------------- Improving the Doing Business Index -------------- ¶5. (SBU) The Ambassador also suggested that Angola engage immediately on improving significantly at least one of the World Bank's Doing Business Index indicators to demonstrate the GRA's commitment to reform. Jaime agreed that Angola must improve its investment climate and acknowledged that the international business community views the World Bank Index as a key indicator of commercial maturity. -------------- Comment -------------- ¶6. (C) Our meeting with Jaime was a great opportunity to talk brass tacks with an influential member of Angola's cadre of reformers. Jaime was frank and acknowledged that Angola confronts significant challenges as it seeks to diversify its economy by attracting foreign investment. He told the Ambassador that Angola's courtship of China is at best a short term solution to Angola's development needs and that U.S. and European investment is essential for the job creation and technology transfer that Angola needs for long-term development. Despite Jaime's commitment to the endeavor, reforming Angola's investment climate is a tough nut to crack, and we should not expect a total fix overnight. That said, we intend to keep the pressure on the GRA, as the country can in fact take some meaningful visible steps in the short term to improve the investment climate here if there is the political will to do so. MOZENA