Republic of Angola- European Community Country Strategy Paper and National Indicative Programme for the period 2008 - 2013 The Government of Republic of Angola and the European Commission hereby agree as follows: 1. The Government of the Republic of Angola, represented by Her Excellency Ana Alfonso Dias Lourens:o, Minister of Planning and National Authorising Officer, and the European Commission, represented by Mr Joao Gabriel Ferreira, Head of Delegation to Angola, hereinafter referred to as "the Parties", held discussions in Luanda from February 2006 to January 2008 in order to establish the general guidelines for cooperation in 2008-2013. During these discussions, the Country Strategy Paper and an Indicative Programme of Community aid for Angola were drawn up in accordance with Articles 2 and 4 of Annex IV to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000, as revised in Luxemburg on 25 June 2005. These discussions completed the programming for Angola. The Country Strategy Paper and the N ationa! Indicative Programme are annexed to this document. 2. Of the indicative programmable financial resources which the Community plans to make available to Angola for the period 2008-2013, there is €214 million for the allocation referred to in Article 3(2)(a) of Annex IV to the ACP-EC Partnership Agreement (A allocation) and €13.9 million for the allocation referred to in Article 3(2)(b) (B allocation). These allocations are not entitlements and may be revised by the Community in the light of the conclusions of the mid-term and end-of-term reviews, in accordance with Article 5(7) of Annex IV to the ACP-EC Partnership Agreement. 3. The A allocation covers macroeconomic support, sectoral policies, and programmes and projects in the focal or non-focal areas of Community aid. The National Indicative Programme (Part 2) draws on the resources of the A allocation. It also takes into account financing which Angola receives or may receive from other Community resources, which does not pre-empt the decisions taken by the Commission. 4. The B allocation covers unforeseen needs, such as emergency assistance, where such support cannot be financed from the EU budget, contributions to internationally agreed debt relief initiatives and support to mitigate the adverse effects of instability in export earnings. The B allocation is triggered by specific mechanisms and procedures and therefore not part of the Indicative Programme as such. 5. Resources may be committed under this Country Strategy Paper and Indicative Programme on the entry into force of the I Oth EDF multiannual financial framework for the period 2008-2013 under the revised ACP-EC Partnership, but not before 1 January 2008. Financing decisions for projects and programmes may be taken by the Commission at the request of the Government of Angola within the limits of the A and B allocations referred to in this document. Financing decisions can also be taken on the basis of Article 15(4) in conjunction with Article 4(1)(d)) of Annex IV to the ACP-EC Partnership Agreement for support to non-State actors or on the basis of Article 72(6) of the ACP-EC Partnership Agreement for humanitarian and emergency assistance funded from the B allocation. Financial decisions shall be taken and 2 implemented in accordance with the rules and procedures laid down in the Council Regulations for the implementation of the 1Oth EDF, the Financial Regulation applicable to the 1Oth EDF and Annex IV to the ACP-EC Partnership Agreement. 6. The European Investment Bank may contribute to the implementation of this Country Strategy Paper by operations financed from the Investment Facility and/or from its own resources, in accordance with Articles 2(c) and 3 of Annex Ib of the ACP-EC Partnership Agreement regarding the 1Oth EDF Multiannual Financial Framework for the period 2008-2013. 7. In accordance with Article 5 of Annex IV to the ACP-EC Partnership Agreement, the National Authorising Officer and the Head of Delegation shall annually undertake an operational review of the Indicative Programme and undertake a mid-term review and an end-of-term review of the Country Strategy Paper and the Indicative Progranune in the light of needs and performance at the time. The mid-term review shall be undertaken in 2010 and the end-of-term review in 2012. Following the completion of the mid- and end-of-term reviews, the Community may revise the resource allocation in the light of needs and performance at the time. Without prejudice to Article 5(7) of Annex IV concerning reviews, the allocations may be increased according to Article 3(5) of Annex IV in order to take account of special needs or exceptional performance. 8. The agreement of the two parties on this Country Strategy Paper and the National Indicative Programme, subject to the ratification and entry into force of the revised ACP-EC Partnership Agreement and the lOth EDF Multiannual Financial Framework for the period 2008-2013, will be regarded as definitive within eight weeks of the date of the signing, unless either party communicates the contrary before the end of this period. Done at Luanda on 20 November 2008 For the Government of For the European Commission the Re ;;t,lic of Angola -- ~-----~--------' Ana Afonso Dias Louren~o Joiio Gabriel Ferreira ~J \\.:;National Authorising Officer Head of Delegation of the \ Minister of Planning European Commission to Angola 3 SUMMARY Since the end of the war in 2002 and the arrival of peace, Angola has advanced at great speed in all sectors, and the political and economic situation has improved considerably. The country is in full reconstruction after the destruction of much economic and social infrastructure in the long conflict. Considering this, social indicators have improved and should show positive results in the coming years and bring about a real reduction of poverty throughout the country. The country is going through a period of political stabilisation. The process of demobilisation and reintegration should finish in 2007 with the reintegration of former UNITA fighters and their dependents. Progress in the democratic process can be noted. The electoral package was adopted in August 2005. The electoral register started up in November 2006 and should reach a total of 7.5 million registered voters by the end of 2007. A political commitment was adopted at the end of 2006 to hold parliamentary elections during the first half of 2008 and presidential elections during the first half of2009. Progress in the economic sector is impressive, with the highest rate of GDP growth in Africa in 2006 (around 20%), and a firm grip on inflation (down to approximately 12.2% in 2006). Oil income is a driving force of the economy, also making it possible to increase public spending, which in turn contributes to the accelerating pace of reconstruction. Oil revenues also have a positive effect on the development of the non-oil sectors. The external public debt has been reduced considerably and monetary reserves are high. The government is, however, conscious of the need to promote the diversification of the economy, especially in the agricultural sector, where Angola shows great potential, and in sectors capable of generating employment. In the social sector much progress is needed given the size of vulnerable groups (displaced people and refugees in the process of social reintegration, sections of the population living in precarious conditions, and the young). Social indicators are weak, especially in the health sector (mortality rate for children under 5 years of age is 25%, maternal mortality is 14 per 1000). The epidemiological situation is alarming, especially the cholera epidemic. In this context, access to drinking water becomes an indisputable priority. In the education sector, despite the efforts by the authorities to build school infrastructure and train and contract teachers, quality continues to be a challenge. The problem of capacity building and human resources is the main constraint on the country's sustainable development and directly affects the public sector. The State has difficulties with planning and managing public affairs because of a shortage of sufficiently qualified staff. This analysis is shared by national authorities and international development partners alike. In 2004, the Government adopted a strategy of "Combate a Pobreza" which identifies the priority sectors for development as reconstruction and rehabilitation of social infrastructure, improvement of the social situation and health and education, and capacity-building for the improvement of public-service delivery. The total amount of the National Indicative Programme for Angola 2008-2013 is EUR 214 million (A Envelope) and EUR 13.9 million (B envelope). The proposed response strategy takes the needs and priorities established by the country into account. 4 The focal areas are: I. governance and support to economic and institutional reform (20% of the financial package); 2. human and social development (32% of the financial package); 3. rural development, agriculture and food security (32% of the financial package). The non-focal sectors will account for 16% of the financial package, which will provide support for regional integration, the private sector, non-state actors and biodiversity. The main objective is to contribute to the sustainable development of the country, through institutional support and capacity building, supporting the government's strategy to combat poverty and to achieve the Millennium Development Goals. The preferred approach will be projects and programmes, bearing in mind that this approach can be reviewed at mid term. This strategy has been drawn up in association with the Member States of the European Union, and non-state actors have been consulted in order to ensure consistency. It will be implemented in coordination and in complementarity with all actors involved, especially the Member States (EU Road Map).