An Holistic Approach to Diversification

29 April 2020

UNCTAD’s Director for Africa, Paul Akiwumi, interviewed by Grace Goodrich, Field Editor, Africa Oil & Power. [Part 1]

In an exclusive two-part interview with Africa Oil & Power’s Field Editor, Grace Goodrich, UNCTAD’s Director for Africa, Paul Akiwumi, explains the holistic model of the ‘Train for Trade II’ program in Angola and the initiatives being taken to reduce vulnerability to external shocks in the face of COVID-19.

What are the primary objectives of the ‘Train for Trade II’ program, and what have been its key developments in the past twelve months?

In the past year, the Train for Trade II program in Angola has covered a wide arrange of interventions and made substantial achievements. The Program focuses on the provision of training for public and private sector officials with the objective of supporting them, enhancing as well as building new policy formulation skills and implementation capacities aimed at economic diversification. The Program provides support in seven thematic areas, namely commercial diplomacy; creative economy; entrepreneurship training; investment policy; national green export strategy for the identification of new potential products for sustainable diversification; trade facilitation and transport and logistics.

Paul Akiwumi

The Program has trained close to 1,000 beneficiaries to date, of which 55% are from the government and 45% are from the private sector. Thanks to those trainings, we have observed important changes in policy directions at the government level on one hand, and tangible success stories from the private sector on the other hand.

UNCTAD’s investment policy review for Angola, validated last year, contains key policy recommendations aiming to improve the investment climate in the country. Technical support activities have also been initiated to help Angola implement these recommendations. In addition, a roadmap for improving the delivery of the trade facilitation strategy in Angola is underway. This will be completed after the key institutions involved in moving goods across the borders have concluded UNCTAD’s four-module Empowerment Program on the implementation of the provisions included in the World Trade Organization Trade Facilitation Agreement.

Furthermore, a range of green products with export potential have been identified. To support their development, targeted training activities have been organized and technical support has been provided to undertake export market analysis, value chain mapping on specific products and the development of a business plan. The creation of important linkages has been facilitated between local producers, entrepreneurs and Angola’s Investment and Export Promotion Agency, government support services, as well as between the Angolan trade authorities or institutions and their peers from other countries. A number of entrepreneurs, trained through UNCTAD’s innovative Empretec methodology have already taken up successful businesses in some of the identified sectors and markets, creating employment and revenues.

The innovative nature of the ‘European Union-UNCTAD’s Program of Support for Angola: Train for Trade II’ lies in its holistic approach to contribute to the reduction of the country’s excessive dependence on extractive sectors. Such an approach is key to help the country become less vulnerable to external shocks, such as the fall in oil prices or the current COVID-19 crisis. With lessened dependence on only one commodity, Angola can rely on other sectors for its export earnings and food security during crisis times. This will not happen overnight as some sectors need to be reinvigorated and re-equipped for exports or built from scratch.

Lastly, the Program has also helped Angolan institutions to work closely through collaborative and coordinated engagements both in the design and implementation processes, further contributing to efforts to build capacities for national ownership of the development processes.

How has the Program evolved since its initial implementation in 2017?

The Program has been developed through consultative processes with the direct participation of Angolan institutions. While it has already reached its targets in terms of the overall number of people trained, initial targets for the private sector have been exceeded significantly. As such, a shift in demand and delivery towards the private sector is already noticeable. This shift has renewed the government’s attention to private sector development. Moreover, after the initial trainings in Luanda, the Program has expanded its scope and delivery to key provinces. Furthermore, adopting and applying the principle of train the trainers, Angolan participants are increasingly involved in the development and delivery of the training activities, gradually building a national capacity, which will be key for the Program’s future sustainability.

What specific initiatives is the Program implementing to mitigate the economic impact of COVID-19 in Angola?

Angola is a developing country that had significant trade and economic ties with China. The country is the second largest supplier of oil to China after Saudi Arabia. It follows that any shock that affects its largest import market will have direct bearings on its socioeconomic development. The current COVID-19 epidemic has become a threat for global security and economic wellbeing. The impact of the global health crises on Angola’s economy is likely to be significant, although it is too early to know the scale, scope and exact magnitude. Although at present, countries are grappling with the social impact of COVID-19, the economic implications are likely to be long lasting. It is precisely to help Angola deal with those economic effects that the Program’s strength lies. The Program contributes to the reduction of the country’s vulnerability to external shocks by supporting a sustainable diversification of the economy. Through this work, UNCTAD has already been able to stimulate advancements in various products, including honey, coffee, tropical fruits and timber.

In full consultations with the government of Angola and the EU delegation in Luanda, UNCTAD has suggested a few areas where activities can be urgently undertaken as mitigation mechanisms in light of COVID-19. We hope to move forward with the implementation phase in the next few weeks. In the area of investment facilitation and promotion, dedicated webinars will be delivered on how to respond to global crises, such as the COVID-19 pandemic. Targeted support to build responsiveness and resilience in view of COVID-19 and similar future crises will also be provided in the area of transport and logistics.

What have been the primary challenges for the UNCTAD in building economic resilience in the country?

Excluding oil, most sectors in Angola have a multitude of challenges and require comprehensive and robust development efforts. Angola’s productive capacities are often low with little or no structural economic transformation. Infrastructure is often outdated or designed to support the extractive sectors alone. Transport infrastructure and logistics services are not sufficient; procedures for import and export are long and costly, skills for managing businesses inadequate and challenges in attracting investment, significant.

UNCTAD has been able to train several government officials in several areas. This helps in deepening and consolidating technical knowledge. However, frequent changes in positions and functions resulting from frequent restructuring of institutions pose challenges in terms of retaining skills and continuing to build on the knowledge base developed. This also impacts continuity, sustainability and long-term impact on objectives of the Program.

Furthermore, the Program has ambitious targets in view of promoting the participation of women. As such, while aiming for gender balance, the target is to ensure that at least 40% of participants in trainings are women. This target has been achieved for the most part: in the last progress report, the level was at 37% of female participation. But it is particularly challenging to ensure the targeted level of female participation in activities organized with different private sector operators in provinces.