Would you say that AIA has a strong role as one of the leading institutions in speaking for Angola's civil society?
AIA is a national association with members from all over the country. We are a democratic association with elections every 4 years and that has been able to give a positive image to Angola. We are finally fully accepted, not only by the government, but also by the civil society and the entrepreneurs. It was hard work but we feel happy that the role that we are developing is getting the feedback it should.
Angola is moving forward and changing, which is why one of our roles is to press the government, parliamentary people, and entrepreneurs themselves to change their way of thinking. We are currently living in a democracy with an open market, and those decision makers must work in consideration of this new change.
AIA was dissolved shortly after independence and then resumed its activities in 1993. Since then what has been the level of response that you have been getting from the government when you go and voice the concerns of Angola's industrialists? Has there been an improvement in the level of response over the last 8 years?
There is are two things: one is personal relationships, the other is the institutional relationships. Everyone has bee quite open-minded towards our participation in the country's industrial activities, but when it comes to the exchange of ideas its not quite that peaceful.
From 1994 to 1998 AIA went through some rough times, because of a number of misunderstandings, concerning opposed views on how a democracy works, what an open market is, and so on. Most of those in the institutions and government weren't well informed on open market policies, because they were educated by a centralized and socialist system. They used to fight for socialism. They used to receive aid from the East block, making it very difficult to break those historical ties and mindset. Being on the Presidents Board, however, we are able to press certain changes and share new ideas with the President himself.
The members of AIA, on the other hand, had no need to adapt to this new market place. After its dissolution we continued to lobby for an open market and for a change in government. I was even jailed because of my slant towards democracy and capitalism. But by 1993 we reorganized our organization and recovered our properties (on which we hosted fairs) after 3 years of negotiations with the government.
Change comes slowly, especially after such a long period of socialist rule, but the changes we have been able to achieve have had a strong impact on Angola's economy and strategy and has been felt by many Angolans.
As you said, it seemed like there were some misunderstanding on a open society. What changed in 1998 to prompt the improvement in communication?
In 1998 there was finally a consensus that we should follow the policies of the IMF and the WB, because there was no other way. So it was the President who took the decision upon him to change and follow the open market, and the restructuring route.
What specific reforms did AIA lobby for in the past?
First and above all else we lobbied for total transparency in all areas, to have closer ties between the government and the local producers, to change the banking system, to create more civil associations, and to decentralize the government to other provinces. All in all we basically lobbied to make Angola more efficient through an open market, increasing trade, and AIA is very proud of its contribution to some major changes that it has succeeded in.
What are the most pressing issues that AIA is lobbying for at the moment?
Mainly we are lobbying for an improvement in the inadequate financial and banking system. Right now we have a few local and Portuguese banks. We don't have enough capital for development. The government therefore should give more guarantees and open up so that more international banks come into Angola.
We are lobbying strongly for Oil and Diamond companies to use the Angolan banking system. Therefore, with the support of the various ambassadors the oil companies are slowly changing their banking procedures. They are trying to buy more in Angola, they are interested in seeing democracy develop in the country and with that the development private sector and hence the open market. This is just to show you that AIA isn't leaving the oil and mining sector out of our lobbying. It is quite the contrary, as we are really pressing them for changes.
Are you lobbying for a legal system where the oil and diamond companies would be obliged to use the Angolan banking system for their activities?
During the colonial era, we had a private sector led economy like that of Portugal. It was basically a Portuguese economy. Then we had 25 years of a socialist economy.
When we jumped from one economy to the other, the only thought that went through people's minds was to get rich, in order to recover from the 40 years that were lost. | This is something that many western countries don't understand, and some people here don't realize that they can become wealthy through a profitable legal business. They don't have the history. Angolans believe that it is through easy diamond money that they will become wealthy. There is no state. It is a change that takes time. So what happened is that people linked to the government and the government itself became the entrepreneur. And the private sector was feeling marginalized. That's why I started pushing for change. Fortunately the MPLA was and still is very understanding and realized that there was a need for reform, which is why they are working very hard and are meeting every Thursday in order to address these issues.
In the area of customs, what reforms are you lobbying for, to help industrialists exploit their comparative advantage in international trade?
Because of various problems, the government decided to call upon a Crown Agents in order to deal with customs and its reform.
Under the pressure of the war and the so-called petro-dollars, Angola has been importing all kinds of consumer goods, even though we may produce some of them (meat). Angola's agricultural sector needs to be protected in order to increase its comparative advantage, by increasing import taxes on certain goods. We don't want to restrict imports. We still need foreign products, but we have to get a time to start producing. From 1993 to today, the industrial tissue is only working at 15% of its real capacity. Most plants are closed. To give you an example, in the textile industry we lost 23 posts in Luanda, because of second hand cloths, that come into the country through the various NGO's which have no incurred taxes. Government, therefore, must follow an equilibrium policy that gives opportunity to the local industry, by increasing import taxes. We cannot compete with markets like those in Asia yet. We are a developing country!
You recently spoke about the fact that Angola needs to import technology and know how. An area where this transfer of technology has happened is the bottling industry. Could you tell us why this has happened in this particular area and if there are any other areas where this has started to happen?
Yes there are big investments in bottling companies. Coca-Cola now wants to set up another plant in Huila. Cuca-BGI, a French group, is building another plant in Benguela, and a Portuguese-Colombian group is preparing itself to build a plant in Huambo.
The manufacturing industry's share of Angola's GDP went from a low of 3.5% in 1996 to an estimated high of 6.3% in 1998. What is your outlook for the growth of manufacturing as a proportion of GDP?
In order for the industrial sector to make a difference, the industrial output must grow at least 25%. On average, in industrialized nations, 3 or 4% growth is sufficient, but in Angola even the growth figure of 6.3% means nothing, since it is 6.3$ of nothing. Everything is available in Angola in order to climb to a growth of 25%, as during the colonial times, with much less money.
Foreign investors play an important role in Angola. In the bottling industry, you have foreign investors come in, laws have been changed, import taxes have been raised in the bottling industry etc. So, there seems to be cooperation from the government when a foreign investor shows interest in a certain area. What Angola needs now is for more them to become interested in more and other industrial activities. Can you elaborate on this?
In terms of Diamonds, the government is responding very positively. Within the public works sector, as well, the government is inviting many international companies to rebuild the infrastructure, meaning roads, buildings, etc. In the latter sector we have a big problem regarding cement. There are two companies in Angola that produce cement, on which they must pay 40% taxes. By prohibiting the import of cheaper cement, Angola is now paying extortionate prices for a basic building material. So the government still has a long way to go in this area.
Do you have a final message for our readers, who are interested in investing in Angola?
Yes, we would like to make your readers aware about the fact that the war is nearly finished, that Angola is being rebuilt, is changing its policies, has become more open, is looking for increased cooperation with foreign companies, has an incredible potential in terms of agriculture, and finally that it's geographic location makes it a gateway to the SADC region, which is a market of over 50 million. It should also be noted that the IMF and the WB are giving their total support for the restructuring of the economy, because it is not only Angolans that believe that our country must be responsible for the development in Africa, because it has the conditions to be one of the most developed countries in Africa.
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ASOCIACION INDUSTRIAL DE ANGOLA