Note:   Advance written questions by WTO Me mbers and the replies provided by Angola are 
reproduced in document WT/TPR/M/158/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. 
  WORLD TRADE  
ORGANIZATION  WT/TPR/M/158 
6 April 2006 
 (06-1628) 
Trade Policy Review Body 
14 and 16 February 2006  
 
 
 
TRADE POLICY REVIEW 
 
ANGOLA 
 
Minutes of Meeting  
 
Chairperson:  H.E. Ms Claudia Uribe (Colombia) 
 
 
    P a g e  
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF ANGOLA 4 
III. STATEMENT BY THE DISCUSSANT 6 IV. STATEMENTS BY MEMBERS 8 
V. REPLIES BY THE REPRESENTATIVE OF ANGOLA AND ADDITIONAL 
COMMENTS  11 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 15 
  WT/TPR/M/158 
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I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The first Trade Policy Review of Angola was held on 14 and 16 February 2006.  The 
Chairperson (H.E. Mrs. Claudia Uribe) welcomed th e very high level delegation from Luanda, headed 
by H.E. Mr Aguinaldo Jaime, Deputy Minister to the Prime Minister, and the discussant Mr. Jan-Meinte Postma (the Netherlands).  As usual, the discussant would speak in his personal capacity and, 
in accordance with established procedures, had made  available in advance a broad outline of the 
themes he intended to raise (document WT/TPR/D/134). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The Report by Angola was contained in documents WT/TPR/G/158 
and WT/TPR/G/158/Add.1 and that of the Secretariat in document WT/TPR/S/158.  Copies of 
advance written questions, submitted by:  Jap an, the European Communities, Canada, the 
United States, and Brazil had been transmitted to th e delegation of Angola.  These questions and the 
replies provided by the delegation of Ango la are reproduced in WT/TPR/M/158/Add.1. 
3. The Chairperson observed that Angola had ma de considerable progress in stabilizing its 
economy since the end of the civil war in 2002.  GDP  growth was robust and expected to remain so, 
and inflation had been reduced from hyper-levels to  more moderate rates.  However, the economy 
remained extremely dualistic, with sectors othe r than oil and diamonds as yet performing at low 
levels.  Angola was a resource-rich country but n onetheless a least developed country, with very poor 
social and economic indicators.  The challenge for Angola was to spread the benefits of resource 
income beyond the oil and diamonds sectors to prom ote wider development.  In its trade policy, 
Angola had moved a long way from being a heavily protected economy.  The tariff was the main 
instrument of protection, and rates had been redu ced considerably.  However, tariffs still escalated, 
and there were many tariff exemptions.  A large nu mber of new trade and investment laws had been 
passed, or were in the process, including a new Customs Code incorporating the WTO valuation 
provisions, and new fisheries and intellectual propert y legislation;  the qu estion was how far Angola 
had the capacity to implement such new laws effectivel y, and how they might be assisted to do so.  As 
with many other countries, Angola had to strike a balance between its partic ipation in the multilateral 
trading system, regional trade initiatives throug h Southern African Development Community 
(SADC), and its “Everything But Arms” (EBA) and “African Growth and Opportunity Act” (AGOA) 
links with the European Communities and the United  States respectively.  In addition, there were 
outstanding questions relating to governance and tr ansparency, particularly in the areas of state 
o
wnership and government procurement.  WT/TPR/M/158 
Page 4  
 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF ANGOLA 
4. The representative of Angola
 said that the high level of his delegation illustrated the 
importance attached by the Government to the mu ltilateral trading system and to the Trade Policy 
Review.  After a very long war, with high human costs and devastation of the infrastructure, which 
had created an unstable economic and social environment, Angola had finally reached peace on 
4 April 2002.  Since then, the Government had im plemented policies aiming to guarantee the process 
of economic reconstruction, the fight against povert y, national reconciliation, and the development of 
democracy.  Economic policy had sought to correct the major macroeconomic imbalances, such as the 
huge fiscal deficit, high inflation, and rapid depreciati on of the national currency.  It had also targeted 
some of the basic weaknesses of the economic and so cial tissue in order to create the conditions for a 
competitive private sector and improve living standard s of the population.  Although results had so far 
been encouraging, the Government was fully aware of the need to consolidate the process so that 
peace dividends could be enjoyed by the Angolan  population as a whole.  To this effect, in 
January 2004, it approved a strategy to fight pov erty identifying ten priority areas, including 
rehabilitation of physical and economic infrastructur e; diversification of the economy (especially the 
non-mineral sector) as a way to reduce unemployme nt; food security; and rural development.   
5. Structural reforms included privatization of state-owned enterprises and removal of price 
subsidies.  From 1989 to 2005, 324 enterprises had been privatized, yielding some US$124 million to 
the national treasury.  The Government was aware that a vibrant and modern financial sector was an important tool of economic developm ent and, to this end, measures had been taken to liberalize and 
diversify the financial system.  The policy of financia l controls, with interest and exchange rates fixed 
by the Central Bank, had been abandoned.  Ne w legislation on the non-banking financial system 
would encourage the growth of investment funds, risk capital companies, discount houses, etc., which, together with the banks, would pr ovide alternative capital sources fo r families and companies.  The 
legal framework for a stock exchange had been a pproved and the process of training Angolan brokers 
and the selection of Angolan companies to be listed on the exchange had started.  These changes, 
coupled with a new regulatory framework to make investment less cumbersome and bureaucratic, had 
led to a new wave of foreign investment;  fore ign investment applications had increased from 
US$295 million in 2003 to US$680 million in 2004. 
6.  Despite the inherent constraints due to the war,  Angola had pursued an open external policy, 
with the objective of greater integration in the wo rldwide economy.  The Government had taken steps 
to liberalize the commercial and investment sect ors and facilitate trade in goods and services.  
Modernization and improvement of  regulations governing commercial and financial systems were an 
integral part of its programme for 2005-06.  Su ch internal steps could be effective only if 
accompanied by external measures.  Angola would ma ke efforts to adapt its national legislation to 
relevant WTO rules, in order to guarantee greater  security to potential investors and suppliers of 
technology.  Competition and intellectual property po licies were currently being modernized.  Angola 
had negotiated some bilateral agre ements on reciprocal investment promotion and protection, and was 
an active member of the SADC and the Economic Community of Central African States (ECCAS).  
7. Angola had been a member of the WTO since 1996.  The Government believed that the 
process of multilateral negotiation under way in the Doha work programme must take the development dimension fully into account in all asp ects.  It was fundamental that the negotiations 
reach tangible results in the areas of market access an d the establishment of fair and equitable rules, as 
well as in all questions related to development, of  interest for African countries in general and for 
least developed countries in particular, including special and differential treatment and technical 
assistance. The increasing marginalization of developi ng countries in world trade confirmed a feeling 
that the benefits of globalization had not been equitably distributed among nations.  Angola believed 
that a fair multilateral trading system could help to overcome this feeling, so that countries like 
Angola might take full advantage of trade liberalization.  It would not be possible to reach the 
development objectives of the multilateral trading system without implementing specific operational  WT/TPR/M/158 
 Page 5 
 
 
measures to correct existing inequalities and give de veloping countries the flexibility and space to act.  
For Angola, the objectives of trade policies were to improve the living standard s of its citizens.  The 
Government was working in collaboration with its pa rtners in development, including international 
organizations such as the WTO, and would spare no effort to give its suffering people the dignity and 
well-being they deserved.  Angola was counting on Members’ full support in terms of technical 
assistance and policy advice in order to achieve this. 
8. The representative stated that answers to adva nce written questions would be supplied on the 
second meeting day.  He was ready to hear other questions. WT/TPR/M/158 
Page 6  
 
III. STATEMENT BY THE DISCUSSANT 
9. Welcoming the high-level delegation from Angola, the discussant
 noted that Angola’s 
economy was highly dualistic, with the prosperous  petroleum and diamonds sectors accounting for 
nearly 90% of computable GDP and of exports, while the agriculture and manufacturing sectors, and technical and social infrastructure, were beginni ng to rebuild from very low levels after the 
destruction due to the civil war.  He asked how Angola was facing the challenge of rebuilding its non-
oil economy, and what steps were being taken to spread the benefits of oil income throughout the 
economy.  Angola had also made considerable progr ess in accelerating GDP growth and stabilizing its 
macroeconomy since the end of the civil war.  He asked whether the target for 2005 was expected to 
have been met, what the Government’s inflation expectations were for 2006, and what growth rates 
the Government expected in the oil and non-oil sectors. 
10. In relation to so-called “Dutch disease”, the discussant asked the Angolan delegation how the 
rapid growth of oil income, combined with the “strong Kwanza” policy, which was aimed at reducing 
inflation, had affected the real exchange rate  and hence Angola’s competitiveness in the non-oil 
sectors.  He asked how windfall gains from the rising price of oil were being used, and to what extent 
they were being channelled into development-rela ted expenditure.  Concerning the current state of 
relations with the IMF, he asked what steps ha d been taken by the Government since the 2004 
consultations with the Fund to improve transpar ency in budgeting, fiscal  operations, and revenue 
management;  and what effects su ch measures had had on Angola’s b udgetary situation.  He sought 
updated information on the level and structure of ex ternal debt, and progress in reducing the level of 
arrears.  He also requested information on the terms of Angola’s bilateral assistance, including the 
recent bilateral aid-for-oil loan from China, and ask ed the delegation to clarify Angola’s status under 
the UN Convention against Corruption and the Ex tractive Industries Transparency Initiative. 
11. Relating to Angola’s trade and investment po licy regimes, he asked whether Angola was 
seeking to pursue an inward-looking policy of trade development, based on import substitution, or an 
outward looking policy, and the balance sought between  multilateral and regional trade liberalization.  
Angola had introduced much new legislation on trade and investment regulation for goods and 
services and he was interested to know what the visible effects had b een:  for example, whether it had 
simplified life for investors and traders.  He asked  what areas were currently receiving attention in 
developing new legislation, and whether the Government considered that Angola’s capacity to implement new trade-related legislation could keep pace with the very large volume of laws passed.  
He sought information on trade policy changes that  might result from Angola’s adoption of the SADC 
trade protocol;  Angola’s objectives, and those of  SADC, in establishing an Economic Partnership 
Agreement with the EC, and what advantages Angola had gained so far from “Everything But Arms”.  
He noted that Angola had a large number of othe r bilateral agreements, and asked how many were 
active and which ones were priorities for Angola.  
12. The discussant congratulated Angola on the progress made in Customs reform, and in 
particular the recent adoption of the new Customs Code.  He asked whether the new Code had passed 
into law, and whether Angola was now applying the WTO valuation system; how far the Angolan 
customs were able effectively to apply the six-st age valuation process; what technical assistance had 
been received, from which agencies; what problems of customs fraud or evasion were known to exist, 
and how they would be dealt with under the new provi sions.  He welcomed the fact that the customs 
tariff was Angola’s main trade policy instrument; that all duties were bound under GATT 1994;  that 
maximum tariffs had recently been reduced from 35%  to 30%;  and that Angola gave MFN treatment 
to imports from all sources.  Unlike in many ot her developing countries, tariffs were not a major 
source of revenue for Angola.  A considerable ga p existed between Angola’ s bound and applied tariff 
rates, and he asked whether Angola had used the tr ade policy flexibility provided by this gap and, if 
not, whether Angola would consider binding its tariffs  at applied rates in order to strengthen the 
business climate and enhance the confidence of traders and investors.  He called attention to the large 
number of tariff concessions and exemptions availa ble for investment and asked whether these were  WT/TPR/M/158 
 Page 7 
 
 
necessary in the oil and diamonds sectors, and whethe r they were effective means of attracting new 
investments in other areas.  He asked what progress had been made by Angola in building capacity in 
relation to standards and sanitary/phytosanitary regu lations.  He observed that no official information 
had been provided on procurement legislation and the procedures a pplied by Government and State 
corporations, and sought details on legislation and practices on government and parastatal purchasing 
policies.  As a related point, he asked what st eps the Government was taking to create a more 
competitive environment in state-owned industri es, including in oil and diamonds.  Noting the 
distorting effects of price controls and subsidies,  and that policy in this area was under review, he 
asked about the objectives of this review and m easures planned to bring controlled or subsidized 
prices closer to market levels.  
13. In relation to sectoral trade policies, the ma jor challenge for Angola was to restart and 
rehabilitate sectors other than oil and diamonds, a lthough there were also important questions about 
transparency in the oil and diamonds sectors.  Reconstruction of agriculture presented many 
challenges, including resettlement, de-mining and rest oration of transport infrastructure.  He asked 
what balance was to be struck between comme rcial and subsistence sectors in redeveloping 
agriculture, what incentives, including training faciliti es, could be provided for resettled families, and 
the role of trade policy in encouraging competitiv e agriculture; and what possibilities the authorities 
had to combat imports of low-cost, subsidized agricultural goods.  He asked how the new aquatic 
resources law balanced development of trade in fi sheries with sustainability, and how it was being 
implemented;  what provisions ex isted under bilateral agreements to  ensure sustainable development 
of fisheries, and how the negotiation of an economic  partnership agreement with the European Union 
by SADC members might affect Angola's policy in this respect.  
14. Regarding the oil sector, he asked what action the Government had taken to implement the 
recommendations made in the oil-diagnostic study,  and to improve transparency in relation to 
revenues, flows, and budgetary relationships;  whether there were any plans to change the structure of 
state ownership and control in the petroleum sector ; and what measures were being taken to spread 
oil-related benefits to the wider economy.  He we lcomed Angola's origin-certification system and its 
participation in the Kimberly process, and asked what  steps had been taken to ensure that all Angola's 
diamonds were legally exported, and to prevent smuggling from the Democratic Republic of Congo 
and other countries.  Regarding manufacturing, he asked how the four-pillar strategy, formulated in 
2002, distinguishing labour-intensive industries,  import-substitution industries, export-related 
industries, and high-technology sectors was to be  implemented, and what relationship was seen 
between the need for import-substitution, as a short-term measure, and the development of a 
competitive industrial sector.  The discussant welcom ed the important steps taken to open major 
service sectors to foreign participation and improve prudential controls.  He asked when the Basel II 
standards were expected to come into full operati on for Angolan banks and what legislation had been 
passed to improve prudential standards in the financia l sector.  He was interested to know what steps 
were being taken to promote openness and development of telecommunications.   WT/TPR/M/158 
Page 8  
 
IV. STATEMENTS BY MEMBERS 
15. Members welcomed the Ministerial-level dele gation from Angola, as showing the importance 
accorded by the Government to th e TPR process.  They congratula ted the authorities on the progress 
made in macroeconomic stabilization and trade-re lated legal reforms.  They looked forward to 
receiving replies to written questions. 
16. The representative of Japan
 announced his Government’s new development initiative for 
trade, which would provide financial assistance for production, trade, and distribution infrastructure to 
developing countries, exchange of trainees and expe rts in the field, as well as duty-free access for 
essentially all products originating from least-dev eloped countries (LDCs).  Japan hoped that the 
initiative would help to reduce poverty in developing  countries, including Angola, and to achieve an 
ambitious and balanced result in the Doha Develo pment Initiative.  He welcomed Angola’s economic 
stabilization and growth, but saw great possibilities in  many non-mineral areas such as agriculture and 
fisheries.  He encouraged Angola to diversify its  economy by promoting the non-petroleum sector and 
minimize the informal economy, which he saw as a barrier to sound development.  With regard to 
trade and investment policies, he appreciated A ngola’s promotion of transparency and governance 
through the new investment laws, the revised tari ff, the Public Finance Management Programme and 
the Customs modernization programme.  He look ed forward to Angola’s implementation of the 
Extractive Industries Transparency Initiative a nd ratification of the United Nations Convention 
against Corruption.  He hoped that Angola woul d promote liberalization and competitiveness in 
infrastructure services such as telecommunications.  Referring to the advan ce questions submitted by 
Japan, he noted that the report by Angola had been  received just before the meeting and reserved his 
delegation’s right to submit further questions on that report.  
17. The representative of the European Communities  recognized that Angola was now enjoying 
economic growth, with an optimistic outlook, larg ely due to a positive external environment with 
favourable oil prices and increased production.  Me asures to stimulate growth and development, 
including reconstruction of infrastructure and a pr ivatization programme, ha d also shown good initial 
results.  She congratulated Angola for revising its tr ade and investment legislation and introducing a 
new tariff structure and customs code.  Angola’ s active participation in the WTO and the DDA 
negotiations should assist Angola by providing strong rules and market opportunities.  The EC recognized that Angola, as a least developed country, should only contribute to the Doha Development Agenda (DDA) according to its mean s.  Continuation and reinforcement of domestic 
reform in Angola, including competition policy, pr ivate sector reform, and in telecommunications, 
transport and finance, would help it reap be nefits from its WTO membership and trading 
opportunities.  These reforms should be supported by institutional capacity-building and the 
reinforcement of decentralized structures.  Angol a’s increased integration into the global trading 
system needed to be anchored in the regional context, through such provisions as the SADC Trade 
Protocol, as well as through the development of  interregional initiatives such as the Economic 
Partnership Agreement.  The EC was prepared to provide technical assistance for trade capacity 
building, but such aid had to be supported by a st rong national development strategy with trade as a 
main pillar.  She welcomed Angola’s commitment not to pursue import substitution except as a short-
term measure.  She asked how Angola would assess th e potential for ensuring strong synergy between 
trade and sustainable development, including economic, social, and environmental elements. 
18. The representative of Brazil
 congratulated Angola on the significant improvement of its 
economic performance, together w ith the consolidation of existi ng democratic institutions.  He 
encouraged Angola’s efforts to tran slate oil-based rapid economic grow th into concrete benefits for 
the population.  Angola and Brazil had excellent relations, including through the Community of 
Portuguese-Language Countries (CPLP) and Angola was th e main beneficiary of technical assistance 
from Brazil.  He welcomed the new legislation re defining Angola’s trade and investment framework, 
including the revised customs tariff, Customs Code , investment legislation and laws on the oil and 
diamonds sectors, and supported Angola’s requests fo r assistance.  He recognized that Angola viewed  WT/TPR/M/158 
 Page 9 
 
 
import substitution, at least in the short to medium term, as a necessary stage in the reconstruction 
process. 
19. The representative of Chinese Taipei  noted that Angola was Ch inese Taipei's second largest 
trading partner in Africa, with a considerable trad e surplus due to the scale of Angola’s oil exports.  
He hoped that bilateral trade would grow more balanced in the future.  He supported Angola’s 
determination to re-industrialize a nd expand and diversify its export base.  He welcomed the opening 
of the mobile telephony sector and encouraged Angola to reduce its import duties on telecommunications equipment, as well as continuing to liberalize key domestic services. 
20. The representative of the United States
 noted that Angola was capitalizing on its first real 
opportunity for peace and development in many year s.  He asked for update d information on Angola’s 
poverty reduction strategy, and encouraged Angola to pur sue the challenge of diversification, with an 
emphasis on good governance.  Import substitution polici es, even without recourse to protectionist 
measures, had rarely been successful in other econom ies and he asked for more information about the 
policy and its timeframe.  Noting positive developments  relating to the State’s role in the economy, he 
sought information on Angola’s plans for priva tization, and on the reform of government 
procurement.  The United States was Angola’s larg est export market and third-largest source of 
imports;  the relationship was dominated by ener gy and related products, and there were several 
programmes under way to assist in developing and diversifying the economy, including preferential 
access under AGOA and projects administered through USAID.  The U.S. comments and questions, 
including those sent in advance, re flected a genuine interest in learning about Angola’s reconstruction 
and how the United States could be an effective partner.  
21. The representative of Canada  stated that his delegation was impressed by the efforts made 
since the end of the civil war in terms of reform , although there was still much work to be done.  
22. The representative of Benin  expressed appreciation for the courageous reforms being 
undertaken to improve and strengthen the economic s ituation, notably through tariff reform, the new 
Customs Code, improvements in the investment  framework and conditions, management of 
petroleum-related resources, adaptation of trade legislation to WTO rules, intellectual property 
reform, and so on.  He welcomed the measures ta ken in agriculture, fisheries, energy, banking, 
insurance, communications, and tourism promotion.  He encouraged bilateral and multilateral trading 
partners to pursue and strengthen their support for the Government, so that these efforts could 
translate into greater participation in internati onal trade by Angola, promotion of its economic and 
social development, and elimination of poverty. 
23. The representative of Hong Kong, China  noted its smooth bilateral trading relations with 
Angola and welcomed the progress made in foster ing growth and stabilizing the economy.  He 
emphasized that trade liberalization policies could be  a means of securing foundations for sustainable 
economic growth and poverty reducti on, he welcomed Angola’s tariff liberalization, and encouraged 
it to further reduce tariff escalation, particularly in textiles and clothing, and reducing the gap between 
bound and applied tariff rates so as to enhance the predictability of its tariff regime. He urged Angola 
to eliminate other duties and taxes, which had discrim inatory effects against imports.  He encouraged 
the Government to move towards a more open an d competitive procurement regime and to provide 
more information on its procedures, practices, and pr ojects to potential bidders:  this would facilitate 
the bidding process and help to achieve value fo r money.  He welcomed work in progress on 
standards and accreditation, and hoped that Angola would notify its national inquiry point.  Angola 
had undertaken liberalization in services sectors such as banking, finance and telecommunications, 
and he hoped that the adoption of the modalities for special treatment of  LDC Members in the 
services trade negotiations and the Hong Kong Ministerial mandate for full and effective 
implementation of these modalities would enable Angol a to participate more actively in the services 
negotiations, improve its services commitments , and table its offer when available. WT/TPR/M/158 
Page 10  
 
24. The representative of Colombia
 recognized Angola’s intentions to pursue a healthy fiscal and 
budgetary policy based on an efficient public sector, an  enlarged tax base and reduction of the fiscal 
burden;  he also welcomed the authorities’ efforts to  cut inflation.  Angola had established an efficient 
payments system, undertaken privatization of non-strategic State industries, created an agency for private investment, a development bank and various ot her institutions, and simplified its external trade 
procedures through the creation of a “single win dow”.  Angola, as a least developed country, 
benefited from much technical cooperation as well as duty-free access to U.S. and European markets.  
The best support for development would come from the functioning of a State based on the rule of law, with policies that would generate resources to be invested in education, health, and physical 
infrastructure.  
25. The representative of Côte d’Ivoire
 noted that this review, lik e others, aimed to reinforce 
Members’ trade policies.  He congratulated Angola on its efforts in the political, economic and social 
fields since the end of the civil war.  He hoped that a formal bilateral trade agreement might be 
concluded between his country and Angola.  Teams from both countries would be taking part in their 
first World Cup in 2006;  he hoped that this would be the occasion to re-launch both sport and 
associated economic development in Angola.  Like  Angola, Côte d’Ivoire was emerging from civil 
conflict;  his delegation was present in solidarity as well as from curiosity, to see how Angola was treating the areas presented in the Review.  He wish ed Angola all success in its post-war development 
policies.  
26. The representative of Nigeria
 commended Angola’s active participation in the WTO and 
noted the excellent trade and economic relations be tween the two countries.  Nigeria had a lot in 
common with the economic circumstances of Angola, wh ere, in spite of agricultural, fishery, and 
manufacturing potential, poverty and inequality we re prevalent, together with problems of 
competitiveness and governance He urged trading pa rtners to assist Angola.  He welcomed the 
positive developments in macroeconomic performan ce, spurred by increasing oil prices, and the 
significantly reduced inflation.  The major challe nge facing the authorities was to translate these 
positive developments into sustainable and meani ngful development benefiting the entire population. 
The macroeconomic outlook remained volatile, b ecause of the instability of oil prices, and 
diversification of production and trade and rest oration of domestic infrastructure were major 
challenges.  Angola, as an LDC and a net food importer, should therefore be supported through 
increased technical assistance in specific areas, as identified in the Integrated Framework.  
27. The representative of Zambia , speaking also as coordinator for the least developed countries 
in the WTO, congratulated Angola on its economi c achievements to date and emphasized that all 
possible support and encouragement should be give n to Angola to take it through its next phase of 
economic growth and development.   Macroeconomic indicators and inflation had been positive and 
Angola was working to rehabilitate its infrastructur e, including in the transport, telecommunications, 
and energy sectors.  Members needed to fully suppor t the national efforts to enable Angola effectively 
to integrate into the multilateral trading system. 
28. The observer from the United Nations Food and Agriculture Organization  acknowledged 
Angola's efforts, and stressed that the FAO would continue to support it as much as possible.  He 
asked what percentage of the working population was engaged in agriculture.    WT/TPR/M/158 
 Page 11 
 
 
V. REPLIES BY THE REPRESENTATIVE OF ANGOLA AND ADDITIONAL 
COMMENTS 
29. Introducing the second session, the Chairperson in vited the Angolan delegation to reply to 
questions raised by Members.  These would be divided into three themes:  (i) economic environment;  (ii) trade policies and measures;  and (iii) sectoral policies. 
30. The representative of Angola
 thanked delegations for their interest, questions, and positive 
statements about Angola’s economic and trade polic ies.  Written answers had been provided to most 
of the questions asked;  questions not yet answer ed would receive responses within 30 days.  He 
would make additional comments on some of the issues raised by delegates. 
(i) Economic environment 
31. Angola had achieved greater macroeconomic stability through improved fiscal, monetary, and 
revenue policies internally and the good fortune of  high oil prices externally.  The Government had 
followed prudent fiscal, restrictive monetary, a nd responsible revenue policies, including non-
inflationary public financing thr ough the issue of Treasury bonds.  The resultant declining trend in 
inflation and fall in nominal interest rates had gi ven new impetus to the financial system and a new 
wave of foreign investment.  While the enclave oil economy, dollar-based and mainly offshore, had 
been able to flourish, macroeconomic stability was a precondition for development in the non-oil 
economy.  The new investment had been in agricultu re, livestock and poultry, civil construction, agri-
industry, and in the full occupation of flights to  and hotel rooms in Luanda.  The “strong kwanza” 
policy was part of the economic stabilization effo rt;  while, in the long run, it might harm 
competitiveness, in the short run, stability of the economy and currency was preferable to a degree of 
currency over-valuation.  Other factors, such as lack of infrastructure affected Angola's 
competitiveness, and rebuilding the infrastructure was essential to restoring viable economic activity.  
Depreciation of the currency was not a viable option,  as it would lead to higher inflation and greater 
economic imbalances; there could be no compet itive economy if supply-side factors remained 
unresolved.  The objective was to reduce inflationary  expectations and nominal interest rates, and 
invest in rebuilding basic infrastructure.  As the internal economy picked up, the Government would 
reconsider its use of macroeconomic instruments. 
32. The IMF and the World Bank had both recognized the progress made by Angola in the area of 
transparency.  In relation to tracing of payments, an on-line system had been established linking the 
Treasury, the National Bank, the Banco Poupança de Credito, and all budgetary units at national and 
provincial levels.  Through this, a ll payments by the State could be  monitored in real time.  The 
National Bank accounts were regularly audited by exte rnal auditors selected in consultation with the 
World Bank, and copies of Annual Reports and a uditors’ accompanying letters and recommendations 
were sent to the Bretton Woods institutions.  Simi larly, the accounts of SONANGOL were regularly 
audited by reputed external auditors;  the i ssue of upgrading SONANGOL's accounts to meet 
international accounting standards was under discussion.   A unified budget had been established, and 
all extra-budgetary expenditures had been elim inated.  Former quasi-fiscal operations by 
SONANGOL were now fully reflected in the nationa l budget, under a protoc ol concluded between 
SONANGOL and the Treasury.  Monetary, fiscal, balance-of-payments and external debt statistics were being strengthened with assistance from the Br etton Woods institutions;  in addition, with 
support from UNCTAD, the Central Bank had recently been able to set up a special unit monitoring 
all of Angola's external debt.  Referring to the so-c alled “missing billions” story, he stated that the 
IMF and Angola had looked into this issue and found that discrepancies in accounting systems, 
together with Angola’s volatile exchange rate at th e time, were to blame for the apparent problem.  
Following this investigation, the IMF had stated  that there were no “missing billions” in Angola's 
budget.  The results of a World Bank-financed study on Angola’s procurement system were expected 
by the end of this six-month period;  following the Oil Diagnostic Study prepared by KPMG, the 
Ministry of Finance was updating the software in which oil sector revenues are reflected;  when the WT/TPR/M/158 
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process was over, Angola was expected to be in a better position to know and monitor all 
developments related to the oil sector.  An Account s Tribunal had been established, controlling from a 
judicial point of view all payments made by the State, any state-owned company or any company in 
which the State held a majority of the shares.  A lot had been done to set the basis for a transparent 
and efficient payments system in Angola;  thus, An gola should be able to seriously consider joining 
the Extractive Industries’ Transpar ency Initiative, although some questions relating to the form of 
civil society participation remained. 
33. Bilateral credit lines had been negotiated with Br azil, Portugal, Germany, China, and Israel 
among others.  These were a step forward compared  to earlier “oil-backed” loans.  Concerning the 
Chinese credit line, oil proceeds were deposited in an escrow account held and managed jointly by 
Angola and China, which covered down-payments  and repayments for approved infrastructure 
projects.  The loans had interesting financial conditio ns, with grace periods of 3 to 5 years, repayment 
periods of up to 15 years and interest rates of LIBOR + 1 to 1.5%;  30% of the credit line with China was to be allocated to Angolan companies.  The te rms of the loan were not as interesting as those 
from multilateral institutions (MLIs);  however, MLIs had made their assistance conditional on a 
formal agreement with the IMF, which had not ye t been achieved.  Angola had no choice and could 
not wait.  Naturally, procurement under bilateral cr edits was tied, with th ree companies from each 
side invited to bid for projects. 
34. The discussant welcomed the comments by th e Angolan delegation, which showed that 
Angola was creating the basis for a healthy take-o ff of its economy.  He recalled the difficulties 
caused in the 1970s for the Netherlands economy (" Dutch disease") by the large inflow of revenues 
from natural gas, and the export-oriented assistance measures introduced at the time. 
(ii) Trade policies and measures 
35. The representative of Angola
 noted that very detailed answers to trade policy questions had 
been supplied.   
36. The discussant  asked about import substitution or more  outward-looking policies in Angola. 
37. The representative of the United States  appreciated the very high level and quality of the 
Angolan delegation, and the written and oral responses provided.  He asked for further information on 
Angola’s import substitution policy. 
38. The representative of the European Communities  welcomed the Minister’s comprehensive 
replies and the commitment to supply additional in formation within 30 days.  She recognized the 
steps already taken towards trade liberalization and policy reform, a nd encouraged Angola to continue 
its commitment to rebuilding its infrastructure and diversifying exports.  
39. The representative of Japan  appreciated the written and oral answers given.  He looked 
forward to receiving further information, and reserve d the right to put further questions, if requested 
by his capital. 
40. In reply, the representative of Angola  emphasized that in many areas of policy strategy, 
discussions were ongoing in Angola with a view to reaching national consensus and ownership.  The 
Government believed that some protection of the national economy would be n eeded.  This would be 
applied through the tariff;  it would not be perman ent, but would be aimed at creating a competitive 
national economy.  Protection would allow a tran sitional period for Angola to build a strong and 
competitive economy. 
41. The representative of Zimbabwe  was impressed by Angola’s post-conflict progress.  He 
hoped Angola would benefit from all the flexibility available to developing countries within and  WT/TPR/M/158 
 Page 13 
 
 
beyond the Doha Round.  He s upported Angola's import substitution po licies.  In agriculture, Angola 
was potentially very rich and he hoped it would recei ve large investments that would assist growth 
and diversification in this sector.  The region w ould join Angola in opposing unfair trading practices 
by certain rich countries. 
42. The representative of Korea  welcomed the streamlining of Angola’s customs procedures, and 
asked when the abolition of pre- shipment inspection, announced  in September 2003, would be 
achieved.   
43. In reply, the representative of Angola  stated that PSI would be abolished very soon.  The 
present contract with BIVAC would end on 31 March 200 6;  thereafter, a more liberal system would 
be put in place, in which PSI would be mainta ined only for certain sensitive goods and import 
procedures would be further liberalized.  
(iii) Sectoral policies 
44. The representative of Angola  referred Members to the written replies provided on industry, 
telecommunications, and finance.  In relation to financ ial supervision, he stated that, as part of the 
modernization of the payments system, a network of automatic teller machines (ATMs) and plastic 
optical fibres (POFs ) had been established for electronic payments in retail banking.  Once 
weaknesses in the telephone system had been overcom e, the system had worked very well.  Wholesale 
banking settlements were also now covered by a system  of real time gross settlement.  This had been 
hailed by the World Bank as a major step forward.  The next step would be to link Angola’s domestic 
payments system with international payments, unde r World Bank supervision.  Software for data 
transfer and information had been approved in the SADC region, and a World Bank mission would 
soon be testing the system in Angola;  if approved,  the system could be fully implemented before the 
end of 2006.  All these measures would enable A ngola to apply Basle II supervisory rules in the 
financial sector. 
45. The discussant  expressed appreciation for Angola's economic performance since the end of 
the civil war, and the progress made in introducin g new legislation.  He reiterated that while an 
import-substitution strategy might be useful in the short run in redeveloping Angola’s economy, 
experience of other developing countri es had shown that it was not a viable long-term option.  Despite 
its harrowing experiences in the civil war, Angola ha d two major advantages:  its oil revenue, and the 
fact that revenue from trade-rela ted taxes was a very minor part of the Government budget.  He 
suggested that Angola should consider the option of becoming an open, low-duty economy with fewer 
distorting measures as a longer-term strategy.  He we lcomed the authorities' aim to continue to pursue 
full transparency in government procurement operations  and those of the major state companies.  He 
stressed the need to make trade policy a central pillar of government policy, with equal importance to 
other areas such as finance, industry, and agriculture.  Welcoming the proposal to create a National Secretariat for the WTO, he suggested that An gola should go further and establish a central 
coordinating inter-ministerial body that could oversee all aspects of trade policy, with the authority to 
speak with sufficient weight in discussions with  other Ministries and in the Economic Cabinet. 
46. The representative of Canada
 thanked the Angolan delegation for the detailed answers 
provided and looked forward to receiving information on the draft law on authors' rights and on measures taken in the telecommunications sector. 
47. The representative of Zimbabwe
 expressed astonishment at the ra te of tariff reduction that had 
been achieved, which he thought had the potentia l to cripple any meaningful import substitution 
policy.  He hoped that Angola would get credit for this liberalization already undertaken, in the 
current negotiations.  WT/TPR/M/158 
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48. The representative of Angola
 thanked all participants, and re iterated that answers that were 
outstanding would be provided in a very short time.  His presence at the Review, as authorized by the 
President, illustrated the great importance Angola attached to the multilateral trading system.  Angola’s objective was to rebuild and make a mode rn, competitive economy and play a role in the 
global economic arena.  It was grateful for the support being given by the WTO, UNCTAD, and other 
institutions;  the conclusions of a recent seminar on services, with UNCTAD participation, were being 
carefully studied and reviewed.  WT/TPR/M/158 
 Page 15 
 
 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
49. I should like to thank all participants in this very informative first Trade Policy Review of 
Angola.  The high level of the delegation from Lu anda, led by the Deputy Minister to the Prime 
Minister, was an important sign of the seriousness wi th which Angola has treated the review process.  
The reports by Angola and the Secretariat, a nd the responses of the Angolan delegation to the 
searching questions by Members and our discussant, Mr Postma, have made a significant contribution 
to knowledge of Angola's economy and of its trade and development policies.       
50. Members recognized that, following the end of th e civil war in 2002, Angola has made great 
strides in stabilizing its economy and promoting gr owth of GDP.  However, the economy is still 
highly dualistic, and many challenges remain in redeveloping the non-mineral sectors and ensuring 
that the benefits of growth a nd development are spread throughou t the economy.  Members welcomed 
the extensive and ongoing updating and liberalization of Angola's trade and investment legislation.  
However, they raised issues relating to transparen cy in various areas of law and economic policies, 
including the use of oil revenue;  to the Governme nt's capacity to implement the large volume of new 
legislation;  and to technical assistance required and made available.   
51. Members appreciated Angola's growing particip ation in the WTO system, including the Doha 
Development Agenda.  They encouraged Angola to  participate more actively in the goods and 
services negotiations, including binding of tariffs at applied rates and presenting offers in the field of 
services.  Members also noted that, while currently Angola applied MFN treatment to all suppliers, it 
is increasingly involved in regiona l and inter-regional trade agreements.  They discussed the effects of 
such agreements on Angola's trade policies and pr actices, and encouraged Angola to consider the 
balance that may be struck between regional,  bilateral and multilateral trading links.   
52. Members recognized that, as part of its recons truction process, Angola is currently applying 
an import-substitution model of trade policies, and stressed that this would not necessarily be a viable model in the longer term.  At the same time, th ey congratulated Angola for progress in its Customs 
reform, including the forthcoming adoption of WTO customs valuation methods.  They welcomed the 
new tariff structure and the reductions recently made , while recalling that there is still considerable 
tariff escalation and that significant gaps between bound and applied rates and a wide range of tariff-
distorting exemptions remain.  They encouraged Angola to bring other duties and charges into line 
with its WTO binding commitments, and emphasized the need for greater transparency and openness 
in some areas, notably government and parastat al procurement, as incentives for greater foreign 
investment and trade.     
53. Members welcomed Angola's efforts to rev italize the non-mineral-based sectors of its 
economy, through programmes for agricultural an d manufacturing development and the increasing 
liberalization of many services sectors, including finance and telecommunications.  
54. Members sought clarification on a number of issues, including:  sustainable development 
strategies and the role of trade; environmental is sues; phasing out of preshipment inspection; penalty 
tariffs; development of standards and technical regulations; elimination of subsidies and price 
controls; new legislation regarding intellectual prope rty rights; policy regarding genetically modified 
organisms (GMOs); prudential regul ation in the financial sector; and policies relating to energy-
related, postal and courier,  and transport services.  
55. Members expressed their appreciation for the r esponses to their questions as provided by the 
Angolan delegation and looked forw ard to further clarifications promised by the delegation. 
56. In conclusion, Members welcome the significant progress made by Angola in economic and 
trade policy reforms, and at the same time r ecognize the many challenges faced by Angola in 
reconstructing  its economy.  They encourage Angola to give trade a central role in its development WT/TPR/M/158 
Page 16  
 
strategy, particularly in revitalizing the non-oil sectors of the economy, and to avoid inward-looking 
trade policies as a long term solution.   
57. Members also welcome the requests made by Angola for technical assistance on a bilateral 
basis, from the WTO, and in the context of the Integrated Framework for Trade-related Technical 
Assistance, and urge the agencies concerne d to respond urgently to these requests. 
 
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