ANGOLA’S INFRASTRUCTURE: A CONTINENTAL PERSPECTIVE Angola already spends a sizable $4.3 billion per year to meet its infrastructure needs (table 18). Around 57 percent of the total is allocated to operations and maintenance, while the remaining 43 percent is capital expenditure. Operating expenditure is entirely covered from budgetary and state-owned enterprise (SOE) resources, and payments by infrastructure users. Seventy-four percent of capital expenditure is funded by the public sector, though significant shares of capital investments are provided by the private sector (7 percent) and financiers other than member countries in the Organisation for Economic Co-operation and Development (OECD) (18 percent). Official development assistance (ODA) for infrastructure is negligible (2 percent).

**Table 18. Financial flows to Angola’s infrastructure**

<u>$ million per year</u>

||O&M<br>Public sector|Public<br>sector|Ca<br>ODA|pital expenditure<br>Non-OECD<br>financiers|<br>PPI|Total<br>CAPEX|Total<br>spending|
|---|---|---|---|---|---|---|---|
|ICT|97|102|2|40|110|253|350|
|Irrigation|2|5|0|0|0|5|7|
|Power|295|184|6|81|9|280|575|
|Transport|1,815|1,026|10|127|3|1,166|2,981|
|WSS|233|22|16|70|0|109|341|
|Total|2,442|1,339|34|318|121|1,813|4,255|

_Source:_ Derived from Foster and Briceño-Garmendia (2009). _Note:_ O&M = operations and maintenance; ODA = official development assistance; PPI = private participation in infrastructure; CAPEX = capital expenditure; OECD = Organisation for Economic Co-operation and Development; WSS = water supply and sanitation; ICT = information and communication technology. The public sector figures are averages of actual spending for 2007–09 in the case of government data. In the case of state-owned enterprises (SOEs), the average spans over 2004–08 and in some cases 2004–09. Funding from external financiers is averaged over the 2002–07 period.

Angola’s existing spending amounts to almost 14 percent of its 2005 GDP (figure 22). This represents quite a high level of effort, well above the averages for the country’s regional peer groups. While total spending is high, the balance between investment and operating expenditure is unusual. While Angola’s capital spending of 6 percent of GDP is almost on par with its resource-rich peers, its operating expenditure at 8 percent of GDP is several times the level found in other resource-rich countries.

Angola’s pattern of capital investment in infrastructure differs from that of comparator countries. It is heavily skewed toward transport (taking 70 percent), leaving much smaller shares for power (14 percent), ICT (8 percent), and water supply and sanitation (8 percent). Relative to its peer group, Angola is much more reliant on public funding for capital investments for the transport, power, and ICT sectors. The level of recent public investment in the transport sector is particularly high. Non-OECD financing is important across the board in Angola. Private sector investment has been limited to the ICT sector, while other resource-rich countries have received private flows also to other infrastructure sectors. Angola’s investment efforts in ICT, power, and water supply and sanitation are lower than the respective average for resource-rich countries. By contrast, investment in transport is substantially higher (figure 23).

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