ANGOLA’S INFRASTRUCTURE: A CONTINENTAL PERSPECTIVE The operational inefficiencies of power and water utilities cost Angola a further $252 million a year, equivalent to 0.4 percent of GDP. The annual value of inefficiencies in the power sector (at $143 million) is higher than that in the water sector (at $109 million). Both power utilities, ENE and EDEL, and the water utility EPAL, can benefit from improving bill collection and reducing distributional losses. In 2009 ENE collected only 27 percent of its billings to EDEL and only 70 percent of its billing to end users. EDEL reported collecting 68 percent of its billings to consumers. EPAL managed to collect only 45 percent of its billings for water services. If all utilities were able to collect 100 percent of billings, they would receive an additional $131 million per year—$78 million in power and $53 million in the water sector. ENE lost 23 percent of power distributed to end users in 2009, while EDEL’s distributional losses stood at 36 percent. When compared to the best-practice benchmark of 10 percent, the overall distribution losses result in $65 million in annual potential savings. Nonrevenue water in the water sector stood at a high 61 percent of total water production in 2009, three times the best-practice benchmark of 20 percent. Nonrevenue water inefficiencies cost Angola about $57 million a year, equivalent to 0.08 percent of GDP. In the power sector, the burden of utility inefficiencies in terms of GDP in Angola is lower than for the benchmark countries, but in water, the burden is slightly higher (figure 26).

**Figure 26. The burden of inefficiency carried by Angola’s power and water utilities**

a. Uncollected bills and unaccounted losses in the power sector, as a percentage of GDP b. Uncollected bills and unaccounted losses in the water sector, as a percentage of GDP <!-- Start of picture text --> 0.500<br>0.400<br>0.300<br>0.200<br>0.100<br>0.000<br>Angola Resource-Rich<br>Collection inefficiencies Unaccounted losses<br>Percenatage of GDP<br><!-- End of picture text --> <!-- Start of picture text --> 0.20<br>0.15<br>0.10<br>0.05<br>0.00<br>Angola Resource-Rich<br>Collection inefficiencies Unaccounted losses<br>Percenatage of GDP<br><!-- End of picture text --> _Source_ : Derived from Briceño-Garmendia, Smits, and Foster (2009).

# Annual funding gap

Angola’s infrastructure funding gap amounts to $115 million per year, or about 0.4 percent of GDP, once efficiencies are captured. Most of the gap is found in the water and sanitation sector (table 20). Most of the other sectors do not face any funding gap once all inefficiencies are taken into account. But in the power, water, and ICT sectors there is some potential for redistributing spending between capital and operating expenditure. As noted above, transport spending substantially exceeds the benchmark level established here, due to a government preference for accelerating reconstruction of the national road network. The remaining funding gap is very small relative to the size of Angola’s economy, and could easily be filled by a modest reallocation of resources from the transport to the water and sanitation sector; particularly in view of the low budget execution in the transport sector. Furthermore, the funding gap for water and sanitation could be eliminated simply through a greater reliance on lower-cost technologies 41