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AFRICAN DEVELOPMENT BANK
PROJECT : SCIENCE AND TECHNOLOGY DEVELOPMENT PROJECT (PDST)
PROJECT APPRAISAL REPORT
OSHD DEPARTMENT
October 2015
Translated Document
Table des matières
(Currency Equivalents, Fiscal year, Weights and measures, Acronyms and Abbreviations,
Project Information Sheet, Executive Summary, Results-based Logical Framework,
Implementation Schedule…………………………………………………………………(i-vii)
I. STRATEGIC THRUST AND RATIONALE............................................................................................ 1
1.1 PROJECT LINKAGES WITH COUNTRY STRATEGY AND OBJECTIVES ............................................................ 1
1.2 RATIONALE FOR BANK INTERVENTION ...................................................................................................... 2
1.3 AID COORDINATION .................................................................................................................................. 3
II. PROJECT DESCRIPTION ........................................................................................................................ 4
2.1 PROJECT COMPONENTS ............................................................................................................................. 4
2.2 TECHNICAL SOLUTIONS ADOPTED AND ALTERNATIVES EXPLORED .......................................................... 5
2.3 PROJECT TYPE ........................................................................................................................................... 6
2.4 PROJECT COST AND FINANCING ARRANGEMENTS ................................................................................ 6
2.5 PROJECT TARGET AREA AND BENEFICIARIES ............................................................................................ 1
2.6 PARTICIPATORY APPROACH FOR PROJECT IDENTIFICATION, DESIGN AND IMPLEMENTATION ................... 2
2.7 KEY PERFORMANCE INDICATORS .............................................................................................................. 3
2.8 BANK GROUP EXPERIENCE AND LESSONS REFLECTED IN PROJECT DESIGN .............................................. 3
III. PROJECT FEASIBILITY…………………………………………………………………………… 4
3.1 ECONOMIC AND FINANCIAL PERFORMANCE .............................................................................................. 4
3.2 ENVIRONMENTAL AND SOCIAL IMPACT ..................................................................................................... 5
IV. PROJECT IMPLEMENTATION ............................................................................................................ 8
4.1 IMPLEMENTATION ARRANGEMENTS .......................................................................................................... 8
4.2 PROJECT MONITORING AND EVALUATION ............................................................................................... 10
4.3 GOVERNANCE .......................................................................................................................................... 11
4.4 SUSTAINABILITY ...................................................................................................................................... 11
4.5 RISK MANAGEMENT ................................................................................................................................ 11
4.6 KNOWLEDGE BUILDING ........................................................................................................................... 12
V. LEGAL FRAMEWORK ......................................................................................................................... 12
5.1 LEGAL INSTRUMENT ................................................................................................................................ 12
5.2 CONDITIONS FOR BANK INTERVENTION .................................................................................................. 12
5.3 COMPLIANCE WITH BANK POLICIES ........................................................................................................ 13
VI. RECOMMENDATION............................................................................................................................. 13
ANNEX I : COUNTRY COMPARATIVE SOCIO-ECONOMIC INDICATORS
ANNEX II : PORTFOLIO OF ACTIVE NATIONAL PROJECTS AS AT 30 JUNE 2015
ANNEX III : MATRIX OF DEVELOPMENT PARTNERS’ ACTIVITIES IN ANGOLA
ANNEX IV : MAP OF THE PROJECT AREA
ANNEX V : BRIEF PRESENTATION OF PROCUREMENT ARRANGEMENTS
ANNEX VI : RATIONALE FOR FINANCING 90% OF PDST COST WITH ADB RESOURCES
LIST OF TABLES
TABLE 2.1 : PROJECT COMPONENTS
TABLE 2.2 : PROJECT ALTERNATIVES EXPLORED AND REASONS FOR REJECTION
TABLE 2.3 : PROJECT COST BY COMPONENT (IN USD THOUSAND)
TABLE 2.4 : SOURCES OF FINANCING (IN USD THOUSAND)
TABLE 2.5 : PROJECT COST BY EXPENDITURE CATEGORY (IN USD THOUSAND)
TABLE 2.6 : EXPENDITURE SCHEDULE BY COMPONENT (IN USD THOUSAND)
TABLE 2.7 : PROJECT COST BY EXPENDITURE CATEGORY AND BY SOURCE OF FINANCING
(IN USD THOUSAND)
TABLE 3.1 : KEY ECONOMIC AND FINANCIAL DATA
TABLE 4.1 : MONITORING PHASES AND FEEDBACK LOOP
LIST OF GRAPHS
GRAPH I : GENDER-BASED EDUCATIONAL PROFILE, 2009
Currency Equivalents
(July 2015)
Currency Unit = AON
UA 1 = AON 170.6809
UA 1 = USD 1.40639
UA 1 = EUR 1.25694
Fiscal Year
1 January – 31 December
Weights and Measures
1 metric tonne = 2 204 pounds
1 kilogramme (kg) = 2.200 pounds
1 metre (m) = 3.28 feet
1 millimetre (mm) = 0.03937 inch
1 kilometre (km) = 0.62 mile
1 hectare (ha) = 2.471 acres
ii
ACRONYMS AND ABBREVIATIONS
AFD : French Development Agency
ADB : African Development Bank
AIA : Angolan Industrial Association
CPIA : Country Policy and Institutional Assessment
CSP : Country Strategy Paper
DNPAIA : National Directorate of Environmental Impact Prevention and Assessment
ESMP : Environmental and Social Management Plan
EU : European Union
IAPI : Angolan Institute of Industrial Property
IFE : Instituto do Fomento Empresarial
IMF : International Monetary Fund
IPS : International Patent System
JAS : Joint Assistance Strategy
KSI : Key Sector Indicators
M & E : Monitoring and Evaluation
M/W : Men/Women
ME : Minister of the Environment
MINEDUC : Ministry of Education
MINESUP : Ministry of Higher Education
MININDUST : Ministry of Industry
MST : Minister of Science and Technology
MUSD : Million US dollars
NDP : National Development Plan
NGO : Non-Governmental Organization
OPSCOM : Operations Committee
OSHD : Human Development Department
OSVP : Vice-Presidency, Sector Operations
PDST : Science and Technology Development Project
PIP : Public Investment Programme
PMT : Project Management Team
RAS : Regional Assistance Strategy
TFP : Technical and Financial Partner
UA : Unit of Account
UNESCO : United Nations Educational, Scientific and Cultural Organization
USD : United States Dollar
WB : World Bank
WDI : World Development Indicators
iii
Project Information Sheet
Client Information Sheet
BORROWER : Republic of Angola
EXECUTING AGENCY : Ministry of Science and Technology
Financing Plan
Source of Financing
Amount
Instrument
ADB USD 90 M1 Loan
Government USD 10 M Counterpart Contribution
TOTAL COST USD 100 M
ADB Financing Information
Loan Currency : USD
Interest Rate Type : Floating base rate with a free rate-fixing option
Base Rate : 6-month Libor
Lending Margin : 60 basis points (bps)
Financing Margin : Calculated twice a year
Commitment Charge : N/A
Other Charges : N/A
Tenor : Up to 20 years
Grace Period : Up to 5 years
FRR, NPV (baseline scenario) : 33%, USD 142,865,951
ERR (baseline scenario) : 24.5%
Timeframe – Main Milestones (Expected)
Project Appraisal June 2015
Negotiations September 2015
Project Approval October 2015
Effectiveness January 2016
Mid-term Review July 2018
Completion December 2020
Last Disbursement March 2021
1 The rationale for financing 90% of project cost with ADB resources is presented in Annex VI.
iv
EXECUTIVE SUMMARY
Project Overview
The Science and Technology Development Project (PDST) will cover the entire national
territory. Its overall expected outcomes are: (i) constructing and equipping the Mabubas
Science and Technology Park; (ii) financing scholarships and research projects; (iii)
implementing promotional activities and strengthening women’s participation in scientific,
technological and innovative activities; (iv) skills development in secondary education; and
(v) intellectual property management support.
The project will mainly benefit 155 researchers (at least 55% of them women) who will
be trained, 40 teams whose research projects will be financed and 125 girls who will be
awarded scholarships for secondary education. The business incubator that will be
established in the technology park will enable young Angolans to conduct tests, develop
prototypes and start their businesses. Lastly, the project will benefit the entire private sector
through the support that will be provided to it by the technology park for its research and
development activities.
Needs Assessment
The PDST’s objective is to contribute to diversifying the Angolan economy by
promoting technological innovation and improving the productivity and competitiveness
of enterprises in non-oil priority sectors. Indeed, scientific and technological development
is one of the main thrusts of the 2013-2017 National Development Plan (NDP). However,
global comparative indicators show that the country’s performance in terms of innovation is
weak due to poor research infrastructure and equipment as well as lack of research skills.
Bank’s Value Added
The Bank has experience in the design and implementation of science and technology
development projects as well as in sector policy dialogue and strategic thinking. Thus, it
has approved many higher education, science and technology projects in various countries.
Over the last three years, it also organized two African fora on science, technology and
innovation which focused on the sharing of ideas and experience as well as the conduct of
many analytical works.
Knowledge Management
The main project objective is to build knowledge, given the sector targeted and the
nature of activities to be financed. The project will help to build knowledge through the
identification of technological solutions to business problems, transfer of technology and
innovations that will be supported by the business incubator. It will also support knowledge
building by training many engineers and researchers. Lastly, it will provide various forms of
technical assistance for building a science and technology park, appraising research projects,
strengthening the framework for training secondary school teachers, establishing an industrial
property database, etc.
v
Angola: Science and Technology Development Project
Results-Based Logical Framework
Country and Project Name: Angola - Science and Technology Development Project
Project Goal: Contribute to economic diversification through scientific and technological innovation
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATION
RISKS /
MITIGATION
MEASURES Indicators
(including ISC)
Baseline
Situation Target
IMP
AC
T
The weight of the
non-oil sector in the
economy is increased
The non-oil sector’s
share in GDP
59.4% in
2013(a) 74.5% in 2030(b)
IMF statistics
INE statistics
MINEC reports
OU
TC
OM
ES
Increased patent
application
Number of patent
applications under IPS 3 in 2013(c)
175 in 2023(d)
(160 in 2020)
IPS, MST, Ministry of
Industry
Risk: low private sector
involvement in the
activities of the
technology park
Mitigation measures:
legal autonomy of the
park and involvement of
the private sector in the
design and management
of the park
Increase in the
availability of
researchers
Number of full-time
equivalent researchers
per million inhabitants
57 in 2011,
32% of them
women(e)
75 in 2023, 40% of
them women(f)
(70 in 2020, 37.5%
of them women)
UNESCO, MST,
Ministry of Higher
Education (MINESUP)
OU
TP
UT
S
Component1: Support for Research Activities
The Mabubas
Technology Park is
constructed, equipped
and operationalized
Numbers of research
centres constructed,
equipped and
operationalized
0 in 2015 1 in 2018 MST reports
Risk: low rate of
retention of researchers
trained under the
project.
Mitigation measure:
signing of a ten-year
contract of employment
for scholarship
recipients
Researchers and
research engineers
are trained(g)
Number of master’s,
doctorate and post-
doctorate scholarships
awarded and
percentage of female
recipients
0 in 2015
155 in 2020 (80 in
2018), at least 55%
of them women
MST data
MINESUP data
Research projects are
financed(h)
Number of projects and
percentage of women
among team leaders
0 in 2015
40 in 2020 (20 in
2018), of which at
least 50% of teams
are headed by
women
MST data
MINESUP data
Component 2: Creation of an Environment Conducive to the Development of Science, Technology and Innovation
A system of training
in methodology is
established
Number of teaching
methodologists trained
and have assumed duty
0 in 2015 54 in 2018, at least
25 of them women
MINEDUC data
MINESUP reports
Secondary school
laboratories are
equipped
Number of laboratories
equipped 0 in 2015
18 laboratories, that
is 1 per province in
2019
MINEDUC reports
An equipment
maintenance system
is established
Number of databases
established and
inventories carried out
0 in 2015
One database is
established in 2017
and two inventories
carried out in 2020
MST report
MINEDUC report
MINESUP report
Technicians and
teachers are trained in
equipment
maintenance and use
Number of laboratory
technicians and teachers
trained
0 in 2015
18 laboratory
technicians trained
in 2016 and 108
teachers trained in
2018
MST report
MINEDUC report
MINESUP report
OU
TP
UT
S
Academic
counsellors are
trained
Number of academic
counsellors trained and
have assumed duty
0 in 2015 54 in 2018, at least
30 of them women
MINEDUC data
MINESUP reports
The industrial
property database is
established
Existence of an
industrial property
database
Non-existent in
2015
1 database
established in 2017
MININDUST and MST
reports
National Science, Number of awards given 0 in 2015 8 in 2020 (4 in 2018) MININDUST and MST
reports
vi
Technology and
Innovation awards
A national scientific
data management
policy is developed
Existence of a national
scientific data
management policy
Non-existent in
2015
1 policy developed
in 2017
MST, MINESUP and
MININDUST reports
Component 3: Project Management
Procurement
activities are carried
out
Update rate of the
Procurement Plan
Prepared in
2015
PP updated at least
once annually PP
Risks: procurement
delays and low
disbursement
Mitigation measures:
recruitment of PMT
members on a
competitive basis,
performance contracts,
procedures manual
Project activities are
physically
implemented
Percentage of activities
implemented 0 in 2015
20% annually, on
average MST reports
The project is
financially
implemented
Project disbursement
rate 0 in 2015
20% annually, on
average
Early warning system
(EWS)
Project financial
management is
ensured
Number of audit reports
validated
An audit firm
recruited in
2016
5 annual audit
reports validated Progress reports
Project monitoring
and evaluation is
carried out
Frequency of
preparation of
monitoring and
evaluation reports
Evaluation
system
established in
2016
Quarterly progress
reports, a medium-
term monitoring and
evaluation report
and a final report
prepared
Mission aide-memoire
KE
Y A
CT
IVIT
IES
COMPONENTS RESOURCES
Component 1: Support for Research Activities
Component 2: Creation of an Environment Conducive to the Development of Science,
Technology and Innovation
Component 3: Project Management
ADB: USD 90 million
Counterpart contribution: USD 10 million
Component 1: USD 74.552 million
Component 2: USD 19.934 million
Component 3: USD 5.514 million
Total: USD 100 million
(a): IMF data, (b): Estimate based on IMF data, (c): IPS data, (d): estimate based on IPS and World Bank data (e): UNESCO and MST data, (f) estimate
based on UNESCO and World Bank data.
(g) and (h): the sectors concerned by scholarships and research projects are the activities of the Science and Technology Park, namely agribusiness,
biotechnology and health, energy and environment, information and communication technologies, nanotechnology and mechatronics
vii
Implementation Schedule
1
REPORT AND RECOMMENDATION OF MANAGEMENT TO THE BOARD OF
DIRECTORS CONCERNING A PROPOSAL FOR AN ADB LOAN TO FINANCE
THE SCIENCE AND TECHNOLOGY DEVELOPMENT PROJECT IN THE
REPUBLIC OF ANGOLA
Management submits the following report and recommendation concerning a proposal to
grant a USD 90 million ADB loan to the Republic of Angola to finance the Science and
Technology Development Project (PDST).
I. STRATEGIC THRUST AND RATIONALE
1.1 Project Linkages with Country Strategy and Objectives
1.1.1 Despite the remarkable growth of the non-oil sector of the economy over the
last decade, Angola’s economy is still heavily dependent on the oil sector. In fact,
although non-oil GDP recorded an average annual growth of 12.8% between 2003 and 2013,
the oil sector still accounts for 40.6% of national GDP and more than 90% of exports2.
1.1.2 In addition, despite these genuine macro-economic achievements, the social
situation is by far worse than that of countries with a comparable level of income. The
under-five mortality rate is 167.4 deaths per 1,000 live births, as against 43.4 per 1,000 in
middle-income countries. Life expectancy at birth in Angola is 51.9 years, whereas it is 70
years on average in middle-income countries. In the area of education, the primary school
completion rate in Angola is 54.3%, as against 95.6% in middle-income countries.
Concerning workforce, the unemployment rate is only 5.2% in all middle-income countries,
whereas it is 26%3 in Angola.
1.1.3 Considering the need to reduce poverty, the country has prepared a National
Development Plan (NDP) covering the 2013-2017 period, which seeks to promote human
development and the well-being of Angolans, improve the quality of life and combat
hunger and extreme poverty. It comprises eight main thrusts for Angola’s development,
namely: (i) ensuring national unity and cohesion; (ii) building a democratic and participatory
society to guarantee fundamental freedoms and rights and civil society development; (iii)
promoting human development and the well-being of Angolans to improve the quality of life
and combat extreme poverty; (iv) fostering sustainable, competitive and equitable
development to guarantee the future of coming generations; (v) promoting the development
of science, technology and innovation; (vi) supporting entrepreneurship and private sector
development; (vii) ensuring the harmonious development of the national territory; and (viii)
promoting the competitive integration of the Angolan economy into the global and regional
contexts.
1.1.4 The PDST will contribute to developing science, technology and innovation in
Angola and its activities are in line with Thrusts 5 and 6 of the NDP. It will directly
contribute to Thrust 5 by supporting research and the development of scientific and
technological skills as well as promoting science, technology and innovation. It will also
contribute to Thrust 6, considering the impact of technological innovation on economic
diversification and growth through productivity and competitiveness gains.
1.1.5 The project is also aligned with the Republic of Angola’s Country Strategy Paper
(CSP) 2011-2015. It is in keeping with Pillar 1 of the 2011-2015 CSP, which seeks to boost the
competitiveness of the national economy. The Bank’s operations under this pillar are aimed
2 Estimate based on the World Development Indicators (WDI) and International Monetary Fund (IMF) data. 3 African Economic Outlook 2015.
2
at supporting the Government’s efforts to promote economic diversification and private
sector development, entrepreneurship and job creation. It is also in line with Pillar II whose
objective is to support economic infrastructure development by building technology park
infrastructure. Lastly, the PDST is included in the Lending Programme considered under the
2013 Mid-Term Review of the CSP.
1.1.6 Lastly, the project is consistent with the Bank’s 2013-2022 Strategy, the Human
Capital Strategy for Africa and the Gender Strategy. In fact, skills and technology
development are among the operational priorities of the Bank’s 2013-2022 Strategy. The
Bank’s Human Capital Strategy is the operational framework for achieving this priority. This
strategy specifies that the Bank will support high-impact investments in education, science and
technology in order to assist Regional Member Countries (RMCs) to move up the value chain
to efficiency- and innovation-driven economies. Investments in skills and technology
development in all RMCs will foster innovation, competitiveness and the creation of job
opportunities, especially in the areas of agri-business and agro-processing, biotechnology and
engineering, particularly industrial production and ICT.
1.1.7 Specifically, the Human Capital Strategy states that the Bank will step up its
support to science, technology and innovation (STI) by continuing to finance the
development and implementation of projects focusing on: (i) skills development in science,
technology and mathematics; (ii) research, innovation and connection to global knowledge
systems; and (iii) outreach to communities and the private sector. It will also finance
programmes for women scientists, particularly by granting graduate and postgraduate
fellowships. The project is also in line with the Bank’s Gender Strategy whose second pillar
concerning economic empowerment recommends the application of good practices by the Bank
within the framework of science and technology development activities, particularly through
scholarship programmes aimed at reducing gender inequalities in this domain, with emphasis
on higher education, science and technology.
1.2 Rationale for Bank Intervention
1.2.1 Innovation contributes to both growth and economic diversification. In fact, it
yields increasing returns which increase the knowledge stock. Firms are interdependent,
hence each firm’s innovation activities benefit all firms in the long run when the knowledge
related to such innovation is disseminated, thus steering the economy on the path of growth
by improving business productivity and competitiveness. In addition, innovation contributes
to the production of new goods and services or adoption of new production techniques, thus
fostering the emergence of new industries as well as new trades, and hence economic
diversification.
1.2.2 Overall, global comparative indicators show that the country’s research and
innovation performance is weak. Angola is on the bottom rung of countries in terms of key
indicators relating to the impact of science and technology on productive activities such as
innovation capacity (142nd out of 144 countries with a score of 2.7 on a scale of 1 to 7),
quality of scientific research institutions (a score of 1.9) and collaboration between academic
institutions and the industrial private sector in research and development (a score of 2). These
results are due to poor research infrastructure and equipment as well as inadequate science
and technology skills, as the level of education of nearly 50% of researchers and university
teachers is below the master’s degree.
1.2.3 The project will contribute to national efforts to develop and improve the
quality of scientific and technological research, as well as innovation capacity. Local
initiatives in this area include the adoption in 2011 of the National Science, Technology and
3
Innovation Policy as well as the Science and Technology Act which defines the legal
framework for STI. The National Science, Technology and Innovation Policy lays emphasis
on the procurement of equipment needed for quality research, the upgrading of human
resources, the promotion of a scientific culture, intellectual property, technology transfer,
cooperation in science and technology, and the strengthening of the regulatory framework.
1.2.4 The Bank has considerable experience in the design and implementation of
projects related to the development of science and technology as well as in sector policy
dialogue and strategic thinking. It has therefore approved many higher education, science
and technology projects in several East and Southern African countries (Kenya, Rwanda,
Uganda, Malawi, Ghana, etc.). Over the last three years, it also organized two African fora on
science, technology and innovation to promote the sharing of ideas and experience and
carried out many analytical works in this sector.
1.2.5 The lessons learned from these operations were reflected in the design of the
PDST. These lessons indicate, among other things: (i) the positive impact of the existence of
an integrated national science, technology and innovation policy with clearly defined
priorities; (ii) the need for greater coordination between government entities, training and
research institutions, the industrial sector and professional organizations; (iii) poor research
infrastructure and equipment; (iv) inadequate research skills; and (v) weak mechanisms for
the evaluation of sector plans and programmes.
1.2.6 Lastly, the project is in line with other operations already approved by the
Bank in Angola, notably the Project to Build Institutional Capacity for Private Sector
Development (aimed at diversifying the national economy by building the capacity of the
Ministry of Economy which supports private sector development) as well as the study on
costs, financing and private sector involvement in higher education and research.
1.3 Aid Coordination
1.3.1 Angola has no formal aid coordination mechanism, but informal meetings are
held occasionally and thematic working groups meet when necessary. The volume of
development assistance to the country represents less than 3% of the national budget. The
main development partners that are active in Angola are the European Union (EU), Norway,
the World Bank, UNICEF, ADB and bilateral creditors such as China, Brazil, Portugal,
Germany and Spain. Their activities mainly focus on agriculture, water and sanitation, private
sector development, health, and capacity building.
1.3.2 Angola recently received support from the European Union, the French
Cooperation Agency and the Japanese Cooperation Agency in the specific area of
science, technology and innovation to train secondary school teachers in the teaching of
science. The country also receives technical assistance from UNESCO and the World
Intellectual Property Organization (WIPO). The outcomes of such interventions include the
establishment of the Malanje Higher Institute of Food Technology (it offers short courses in
higher education and some beneficiaries could win scholarships under this project to further
their studies at the master’s or doctorate degree level), the training of 15 master’s and
doctorate degree students, the training of teaching methodologists, etc.
1.3.3 The PDST complements the operations of other partners involved in the
development of science, technology and innovation. Thus, while UNESCO and WIPO
provide technical support to Angola respectively in higher education (master’s and doctorate
degrees) and intellectual property management, the project will provide financial support in
each of these two areas and coordinate activities. Similarly, while support provided by the
4
French Cooperation Agency and the European Union for research mainly targets agriculture,
the project will focus on biotechnology and health, energy and environment, information and
communication technologies, nanotechnology and mechatronics as well as agribusiness.
Lastly, considering that Angola has received support from the Japanese Cooperation Agency
for the short-term training, in Kenya, of teaching methodologists in science subjects, this
project will contribute to establishing a sustainable system for long-term courses in the
methodology of teaching science.
Sector or Sub-sector*
Science, technology and innovation
Stakeholders - Public Expenditure
Government (2012) Donors Amount Duration
0.7% of GDP European Union 4 EUR million 2014 - 2020
French Cooperation EUR 1.7 million 2009 - 2014
Level of Aid Coordination
Existence of thematic working groups No
Existence of a comprehensive sector programme Yes
Role of ADB in aid coordination Informal coordination
1.3.4 The identification of PDST activities took advantage of the outcomes of
consultations with the Japanese Cooperation Agency, the French Cooperation Agency,
the European Union and the World Bank. The discussions held with these partners during
project preparation helped to ensure project complementarity with other operations relating to
the development of science, technology and innovation in Angola.
II. PROJECT DESCRIPTION
2.1 Project Components
2.1.1 The project’s goal is to contribute to economic diversification through scientific
and technological innovation. Specifically, this involves: (i) supporting the implementation
of scientific and technological research activities in priority areas to diversify the economy
(agribusiness, biotechnology and health, energy, information and communication
technologies, etc.); and (ii) creating an environment conducive to the development of science,
technology and innovation.
2.1.2 The project will be implemented over a five-year period. Its components and
activities are summarized in the table below.
5
Table 2.1
Project Components Component Cost Description
1. Support
for Research
Activities
USD
74.552
million
This component will: (i) build and equip Mabubas Technology Park; (ii) grant 155
scholarships (at least 55% of them for women) at the master’s, doctoral and post-
doctoral levels for the training of researchers (and research engineers) selected on a
competitive basis in the following sectors: agribusiness, biotechnology and health,
energy and environment, information and communication technologies,
nanotechnology and mechatronics; (iii) finance 40 research projects (50% of whose
teams are headed by a woman) selected on a competitive basis in the following areas:
agribusiness, biotechnology and health, energy and environment, information and
communication technologies, nanotechnology and mechatronics; and (iv) finance 125
scholarships for girls in secondary education.
2. Creation of
an Environment
Conducive to the
Development of
Science, Technology
and Innovation
USD
19.934
million
This component will: (i) establish a national system for training teaching
methodologists in science and technology; (ii) equip 18 laboratories in secondary
schools located in provincial capitals; (iii) establish a laboratory-equipment-
maintenance system; (iv) train 18 laboratory technicians and 108 teachers in
laboratory equipment maintenance and use; (v) train 54 academic counsellors (at least
30 of them women); (vi) establish an industrial property database; (vii) design a
national scientific data management policy; (viii) institute national science,
technology and innovation awards; (ix) carry out science, technology and innovation
promotional activities; and (x) support intellectual property management.
3. Project
Management and
Evaluation
USD
5.514
million
This component will establish a system for assessing the impact of science,
technology and innovation development programmes that mainstream the gender
dimension. It will also establish a suitable mechanism for the overall coordination and
monitoring of project implementation. This mechanism is described in §4.1.1 below
and in Annex V. The main activities will be: providing equipment, technical
assistance, monitoring and evaluation, auditing, and project operation.
2.2 Technical Solutions Adopted and Alternatives Explored
2.2.1 During project preparation, several options concerning project objectives and
scope of activities, design and implementation arrangements were considered.
2.2.2 Regarding project objectives, the Government’s request concerned only the
construction of the technology park. However, project design was based on the fact that
besides infrastructure, the technology park and the research sector as a whole will also need
human resources. In addition, the development of science and technology requires many
other elements (industrial property management, promotion of science, technology and
innovation, improvement of the regulatory framework, private sector involvement, etc.).
These different elements were discussed with the Government and their consideration helped
to define the project components retained.
2.2.3 Concerning project design, the idea of extending and equipping an existing
research centre instead of building new infrastructure was considered. However, visits to
several existing research institutions located mainly in urban areas revealed major constraints
in terms of availability of space and the impracticality of extending them, hence the option to
build new infrastructure for a science and technology park.
2.2.4 Regarding project implementation arrangements, the alternative of recruiting a
consulting firm for fiduciary management of the project was explored but rejected
because past experiences produced negative results and also because it requires national
capacity building.
6
2.2.5 Table 2.2 below presents the alternatives explored and reasons for rejection.
Table 2.2
Project Alternatives Explored and Reasons for Rejection Alternative Brief Description Reasons for Rejection
Limiting the project to the
construction of the
infrastructure of the
technology and industrial
park
The Government’s request to
limit the project to the
construction and equipping of a
technology park
The human resource needs of the
technology park have to be taken into
account
Need to consider other crucial
dimensions in the development of
science, technology and innovation:
industrial property management,
regulatory framework, promotion of
science, technology and innovation,
etc.
Expand and equip an
existing research centre
Construct other buildings on a
site that already hosts a
research centre
Spatial constraints in an urban centre
limit the possibility of expansion
Recruitment of a consulting
firm for fiduciary
management of the project
Recruitment of a consulting
firm to carry out project
procurement and financial
management given the weak
capacity of MST
The use of this approach in the past
produced negative results
Need to build the capacity of MST
2.3 Project Type
The PDST is an investment project financed with ADB loan resources. It seeks to support
the Government’s efforts to develop science and technology and promote innovation. The
investment envisaged will particularly help to strengthen and improve the framework of
scientific and technological research and create a more favourable national framework for the
development of science, technology and innovation.
2.4 Project Cost and Financing Arrangements
The total project cost, net of taxes and customs duties, is estimated at USD 100 million,
of which USD 65 million in foreign exchange (65%) and USD 35 million in local
currency (35%). This cost is shared between the ADB and the country at 90% and 10%,
respectively. The rationale for this cost sharing is presented in Annex VI. The cost includes a
5% provision for physical contingencies and a provision for price escalation representing
14.32% of the base cost for expenditure in foreign exchange and in local currency.
Table 2.3: Project Cost by Component (in Thousand USD)
Components Foreign
Exchange
Local
Currency Total
% Foreign
Exchange
1. Support for Research Activities 45 370 18 000 63 370 72%
2. Creation of an Environment Conducive to
the Development of Science, Technology and
Innovation 6 660 9 353 16 013
42%
3. Project Management and Evaluation 3 360 1 065 4 425 76%
Base Cost 55 390 28 418 83 808 65%
Provision for Physical Contingencies (5%) 2 770 1 421 4 190
Provision for Price Escalation (14.32%) 6 832 5 169 12 001
Total Project Cost 64 992 35 008 100 000
1
Table 2.4: Sources of Financing (in Thousand USD)
Sources of Financing Foreign
Exchange
Local
Currency Total % Total
ADB 62 888 27 112 90 000 90%
Government of Angola 2 104 7 896 10 000 10%
Total Project Cost 64 992 35 008 100 000
Table 2.5: Project Cost by Expenditure Category (in Thousand USD)
Expenditure Categories Foreign Exchange Local Currency Total % Foreign Exchange
Works 26 250 9 250 35 500 74%
Goods 5 400 1 038 6 438 84%
Services 13 940 745 14 685 95%
Operating Costs 0 828 828 0%
Miscellaneous 9 800 16 558 26 358 37%
Base Cost 55 390 28 418 83 808 65%
Provision for
Implementation
Contingencies (5%)
2 770 1 421 4 190
Provision for Price
Escalation (14.32%) 6 832 5 169 12 001
Total Project Cost 64 992 35 008 100 000
Table 2.6: Expenditure Schedule by Component (in Thousand USD)
Components 2016 2017 2018 2019 2020 Total
1. Support for Research Activities 21 610 16 920 16 440 4 200 4 200 63 370
2. Creation of an Environment Conducive to the
Development of Science, Technology and
Innovation
3 632 5 041 3 511 2 190 1 640 16 013
3. Project Management and Evaluation 1 228 1 141 866 626 566 4 425
Base Cost 26 470 23 102 20 816 7 016 6 406 83 808
Provision for Implementation Contingencies (5%) 2 523 555 441 351 320 4 190
Provision for Price Escalation (14.32%) 3 710 1 652 1 988 2 146 2 506 12 001
Total Project Cost 29 739 27 694 23 823 9 512 9 232 100 000
Table 2.7: Project Cost by Expenditure Category and by Source of Financing (in Thousand USD)
ADB Government of Angola Total
Foreign
Exchange
Local
Currency Total
Foreign
Exchange
Local
Currency Total
Foreign
Exchange
Local
Currency Total
Works 29 492 10 392 39 884 0 0 0 29 492 10 392 39 884
Goods 6 205 1 143 7 347 0 124 124 6 205 1 266 7 471
Services 14 354 346 14 701 2 104 537 2 640 16 458 883 17 341
Operating Costs 0 614 614 0 444 444 0 1 058 1 058
Miscellaneous 12 837 14 617 27 454 0 6 792 6 792 12 837 21 408 34 245
Total 62 888 27 112 90 000 2 104 7 896 10 000 64 992 35 008 100 000
2.5 Project Target Area and Beneficiaries
2.5.1 Although the project covers the entire national territory, the science and
technology park will be constructed in the municipality of Bara do Dande. This
municipality, which is located in Bengo Province, has many advantages in terms of the
location of the science and technology park. From the academic standpoint, the province is
home to the second campus (currently being completed) of the Agostinho Neto University,
which is the country’s main State university, and the park will be constructed near the
campus, in the Mabubas municipality. From the Economic point of view, Angolan authorities
plan to construct a new port in the municipality of Barra do Dande to decongest the existing
port of Luanda whose limited capacity cannot handle the ever-growing demand. Lastly, it
should be noted that the Angolan Government has established a special economic zone (SEZ)
2
between the provinces of Luanda and Bengo, whose infrastructure seems to be a factor of
competitiveness, innovation and job creation.
2.5.2 The main project beneficiaries are the 155 researchers (at least 55% of them
women) who will be trained under the project, the 40 research teams whose research
projects will be financed and the 125 girls who will be awarded scholarships for
secondary education. Young Angolans will take advantage of the workshop and business
incubator activities envisaged in the technology park (one enterprise per sector will be
incubated year) to conduct tests, develop prototypes and start their businesses. In addition, the
project will be beneficial to the private sector as a whole through the support that the science
and technology park will provide for their research and development activities. The project
will also contribute to skills development by reinforcing the science, technology and
industrial innovation teacher-training system through its support to the intellectual property
management system.
2.6 Participatory Approach for Project Identification, Design and Implementation
2.6.1 The project preparation mission fielded in March 2015 held several working
sessions with all project beneficiary entities and stakeholders. This approach, which was
renewed during the appraisal phase in June 2015, helped to deepen, retain and validate the
main project thrusts. The various beneficiary entities presented their capacity building needs
in the form of quantified targeted actions.
2.6.2 Given its objectives, the PDST’s success necessitates the fostering of strong
public-private partnership on the objectives of the technology park during project design
and implementation and particularly during the operation of the technology park so as to
ensure its smooth management, the identification of the most relevant research projects to be
financed, etc.
2.6.3 Since the objective of the technology park is to contribute to private sector
development, discussions were held with the Angolan Industrial Association on the
project’s relevance. Consultations were also held with research institutions, the ministries
involved in the project, other technical and financial partners and local civil society
organizations during which project activities were defined in light of national priorities and
ongoing initiatives. The various stakeholders consulted recognized the relevance of the PDST
objectives, especially skills training and the creation of an environment conducive to the
development of science, technology and innovation. These consultations helped to prioritize
the mobilization of technical assistance for the establishment of the technology park as well
as the strengthening of mechanisms for training secondary school teachers in science and
technology, and support for academic-counselling activities. Specific discussions held on
gender issues resulted in the inclusion in project activities of the financing of scholarships for
girls in secondary schools and a cohort study on gender-based disparities in science and
technology in secondary schools.
2.6.4 The participatory approach adopted during project preparation will be
maintained during its implementation and in the operation of the science and
technology park. Accordingly, the representatives of the private sector will be involved in
the management of the technology park which will be autonomous from the legal viewpoint,
the selection of research projects to be financed and the definition of the technology park’s
work programme.
3
2.7 Key Performance Indicators
2.7.1 The performance indicators identified and expected outcomes at project
completion are those presented in the results-based logical framework. They will be
assessed by the monitoring and evaluation specialist to be recruited from within the project
management team. The monitoring and evaluation system will be informed by project
beneficiary entities. Key project performance indicators are presented in the box below.
Box: Key Performance Indicators Impact Indicators The share of the non-oil sector in GDP rises from 59.4% in 2013 to 74.5% in 2030.
Outcome Indicators The number of patent applications filed under IPS increases from 3 in 2013 to 175 in 2023;
The number of full-time equivalent researchers per million inhabitants, 40% of them women, increases
from 57 in 2011 to 75 in 2023.
Output Indicators The technology park is built, equipped and operationalized in 2018;
155 researchers (and research engineers), at least 55% of them women, are trained in 2020 in agribusiness,
biotechnology and health, energy and environment, information and communication technologies,
nanotechnology and mechatronics;
40 research projects, of which at least 50% of the teams are headed by women, are financed in 2020;
54 teaching methodologists, at least 25 of them women, are trained in 2018;
18 laboratories in secondary schools in provincial capitals are equipped by 2019;
A research equipment database is established in 2017 and two inventories are carried out in 2020;
18 laboratory technicians and 108 teachers are trained in laboratory equipment maintenance and use in
2018;
54 academic counsellors, at least 30 of them women, are trained in 2018;
An intellectual property database is established in 2017;
8 national science, technology and innovation awards are given by 2020;
A national scientific data management policy is developed in 2017.
2.8 Bank Group Experience and Lessons Reflected in Project Design
2.8.1 The operations portfolio in Angola is characterized by persistent project
implementation challenges due to delays related to the use of relevant national
procedures. The average age of projects is 5.3 years. Portfolio performance is considered
fairly satisfactory with an average score of 2.31 for ongoing projects. The active portfolio has
a problematic project and a potentially problematic project. The proportion of projects at risk
in the portfolio is 10.5%. The country portfolio review conducted in December 2014
identified challenges concerning the Government and the Bank. Special emphasis should be
laid on actions to build the capacity of project management teams in procurement and
financial management. In addition, it is necessary to conclude performance contracts in order
to improve project implementation. The country portfolio performance review helped to
prepare an action plan with specific measures to be implemented within a specified period by
the Government and the Bank.
2.8.2 The lessons learned from these operations underscore the need to recruit
permanent staff who are familiar with Bank procurement, financial management and
monitoring and evaluation procedures and have a good command of Portuguese, in addition
to the Bank’s working languages. In this respect, there are plans to recruit three technical
assistants who are familiar with Bank procurement, financial management and monitoring
and evaluation procedures. Besides providing support for project implementation, they will
train MST staff in these different areas in order to create a pool of experts and sustain project
achievements. In addition, it will be necessary to regularly supervise and monitor the
implementation of their recommendations.
4
III. PROJECT FEASIBILITY
3.1 Economic and Financial Performance
Economic Performance
3.1.1 The project will have a significant impact on the diversification of the national
economy by promoting inclusive growth. It will contribute to identifying innovative
solutions for enterprises in the agribusiness, biotechnology and health, energy and
environment, information and communication technologies, nanotechnology and
mechatronics sectors through the research and development activities of the technology park.
Given the employment potential in these sectors, the project will contribute to reducing
unemployment and increasing productivity. Overall, it will help to enhance the
competitiveness of local enterprises.
3.1.2 The project will support the development of scientific skills and
entrepreneurship, private sector development and job creation. The project will
contribute to developing skills in science and technology by financing scholarships in higher
and secondary education (for girls), supporting the system for training secondary school
teachers in science and technology, equipping laboratories in secondary schools, and
supporting counselling services. Economically, the project will support the establishment and
development of innovative enterprises, the development of entrepreneurship as well as job
creation through technology and industrial enterprise incubation and support of
entrepreneurial activities. The economic rate of return of the project is estimated at 24.5%,
which is higher than the capital opportunity cost (20%). Consequently, the project is
economically viable.
Financial Performance
3.1.3 The PDST is financially profitable with a net present value (NPV) which,
although underestimated, is more than the project investment cost. The analysis focuses
exclusively on the cost of constructing the science and technology park, training researchers
and financing research projects, which represents 66% of total project cost. Concerning
investment, the analysis also takes into account the cost of operating the technology park. The
income stream comprises: (i) salaries paid by the enterprises that will be set up within the
framework of park incubation activities through other research and development projects
implemented in the park; and (ii) income derived from rental of the offices, workshops and
laboratories of the science and technology park. The assumptions retained in terms of
employment are 25 jobs created annually thanks to the park for a salary level corresponding
to the average salary paid to public sector employees. The park’s service life is 25 years. In
light of the assumptions retained, the Net Present Value stands at USD 142.9 million. Details
of the FRR and the ERR are presented in Annex B7
5
Table 3.1
Key Economic and Financial Data Variables / Assumptions Values
Number of direct jobs created annually 25
Activity time (years) 30
Average annual salary (USD) 39 560
Service life of the technology park (year) 25
Office, workshop and laboratory occupancy rate 80%
Discount rate (%) 20 %4
Technology park construction, depreciation and operating cost (I, USD) 107 266 479
NPV (USD) 142 865 951
FRR 33%
ERR 24.5 %
3.2 Environmental and Social Impact
3.2.1 The PDST has been classified under Environmental Category 2 according to
the Bank’s environmental and social procedures on account of its limited negative
environmental impacts mainly linked to the construction of the science and technology
park, which is the subject of Component 1 of the project "Support for Research Activities".
Given the nature of technology park construction activities and the environment concerned,
the Operational Safeguards applicable to the PDST are: OS-1 “Environmental Assessment”;
OS-3 “Biodiversity and Ecosystem Services”; OS-5 “Working Conditions, Health and
Safety”. However, not all of them are applied systematically. The ESMP presents mitigation
measures to ensure project compliance with the operational safeguards and Angola’s
regulations. Additional projects will be conducted during project implementation.
Environment
3.2.2 Conducted on the basis of project documents and the visit to the site of the
future Science and Technology Park, the assessment shows that project activities will
have limited negative biophysical and social impacts. In fact, the site identified for the
construction of the Science and Technology Park is found on the location reserved for the
expansion of the existing academic zone in Mabubas Council, Dande Municipality. The
negative environmental impacts will be those from site and access road construction works.
They will include dust particles during construction, noises and vibrations from construction
works, loss of biophysical and ecological resources, water and soil pollution, impacts on the
health and safety of workers and communities, etc. The negative impacts are linked to: (i) the
risk of displacement, destruction of property and disruption of socio-economic activities; (ii)
the risk of social conflict resulting from the non-employment of the local labour force; and
(iii) pollution and nuisances from the movement of vehicles carrying supplies to the
construction site. The potential negative impacts during the operation phase include: the
production of solid wastes and waste water, reduced drinking water and energy supply and
lower safety levels. As indicated in the ESMP, these few negative impacts could easily be
mitigated or minimized through the application of site management rules. The summary of
the ESMP has been approved by ORQR and will be published on the Bank’s web site.
Climate Change
3.2.3 The project has no high climate change risk. In fact, the project will not entail
large-scale deforestation or disturbance of river beds, which could have affected overall
project climate risk assessment. The only activity with a climate risk is the deforestation of
4 By way of comparison, the discount rate of the National Bank of Angola (Central Bank) stood at 9.92% at the end of 2014 (United Nations
Statistics Division) and the interest rate on bank loans amounted to 16.4% in 2014 (World Bank).
6
the site needed for the construction of the science and technology park. It is not a large-scale
activity and its impact will be minimized through measures aimed at reducing the
deforestation zone and the reforestation of the developed site. Furthermore, the project will
support the enhancement of environmental education in the academic zone within which the
science and technology park is found. Moreover, environment, energy and climate change
will be among the research sectors covered by the activities of the science and technology
park. Education could play an important role in reducing the negative impacts of extreme
climatic events.
Social Issues
3.2.4 During the period following the restoration of peace in 2002, Angola’s economy was
very dynamic, recording a growth rate above the regional average. However, this macro-
economic performance has produced very little impact on the income and well-being of poor
people. Unemployment is also a major concern as most of the unemployed are youths and
least skilled persons. The Government believes that these problems can be solved within the
framework of a comprehensive policy comprising investment in human resources through
support for scientific research and technology development, which are required to foster
sustained economic growth and social development. The project’s positive impacts concern
its three phases and are mainly: entrepreneurship development, job creation and
unemployment reduction (the science and technology park could contribute to incubating an
enterprise per year and per sector of activity, which, given the size of an SME, could
represent at least 50 direct jobs per year), stimulation of the local and regional economy,
increased income, improved living conditions and poverty reduction; greater access to
drinking water, electricity and healthcare services by the local communities; improved quality
of education in schools in the academic zone; opening up of the area and improved
movement of the local people, and better gender mainstreaming in the science, technology
and innovation sector. Many of the project’s negative social impacts are linked to: (i) the risk
of displacement, destruction of property and disruption of socio-economic activities; (ii) the
risk of social conflict resulting from the non-employment of the local labour force; and (iii)
pollution and nuisances from the movement of vehicles carrying supplies to the construction
site.
Gender Issues
3.2.5 Available data show that men and women represent 68% and 32%,
respectively, of researchers in the country. This situation illustrates the wide gender-based
disparities in research activities which the project is expected to contribute to reducing with
time. It could be considered that gender-based disparities in science, technology and
innovation mainly, or even exclusively, concern higher education and research institutions.
However, it is worthwhile bearing in mind that the participation of individuals in research
activities is contingent on their past experience which significantly influences the probability
of their being involved or not in science, technology and innovation at the higher level. In this
respect, the low representation of women in scientific and technological research has two
main causes: (i) it is probably due to overall gender disparities in terms of the level of
educational attainment (for example, if few women reach the higher education level, they will
necessarily be insufficiently represented in research irrespective of their training); or (ii) it is
more probably linked to women’s low propensity for scientific and technological training,
even where they have a high level of education. However, available statistical data allow for
the analysis of only the issue of gender-based levels of education.
7
Graph 1
Gender-Based Educational Profile, 2009
Girls Boys
Access to primaryEducation
Completoin of primaryEducation
Access to secondaryEducation 1
Completion of secondaryEducation 1
%
Level of Education
Source: Data from the UNESCO Institute of Statistics
3.2.6 Graph 1 shows wide gender-based disparities in primary school enrolment in
Angola, with contrasting trends in the first cycle of secondary education. In fact, the girl-
boy parity index regarding access to primary education is 0.854, showing that an average of
854 girls go to school for 1,000 boys. This disparity level increases slightly between the
beginning and the end of primary education, with the parity index dropping to 0.805 at
primary school completion. However, given the low transition between the end of primary
education and the beginning of secondary education for boys, the rate of access by girls to
secondary education is higher than that of boys, standing at 22 %, as against 16 %.
3.2.7 Available fragmented information helps to learn useful lessons for project
design. In fact, it shows that actions limited to higher education would only have limited
impact on gender disparities in research, given that such disparities are the result, at least
partly, of a process which begins from primary education.
3.2.8 The envisaged project will contribute to reducing gender-based disparities in
science, technology and innovation by financing scholarships and research projects. These activities to be carried out under Component 1 of the project will lead to the training of
80 women in fields related to project-targeted economic sectors as well as the financing of
125 scholarships for girls in scientific and technological fields in secondary education. The
project will also help to finance 20 research projects selected on a competitive basis, but
whose teams will be headed by women, in order to contribute to women’s leadership in the
research sector and the development of research teams led by women. Lastly, to fill the
knowledge gap identified in this section, the project will finance the conduct of a survey on
gender-based disparities in science and technology. The total cost of gender-based disparity
reduction activities is USD 8.542 million.
Involuntary Resettlement
3.2.9 Given that land has been provided to the Ministry of Science and Technology
by the Dande Municipality for the construction of the science and technology park, the
project will not entail the displacement of persons. Project-financed activities will be
carried out on public land already allocated for that purpose. However, resettlement issues
must be taken into account when temporary or permanent roads and temporary areas for
storage of materials will be defined. All physical or economic displacements should be
avoided.
8
IV. PROJECT IMPLEMENTATION
4.1 Implementation Arrangements
Project Coordination and Management
4.1.1 The Directorate of Planning of the Ministry of Science and Technology (MST) will
be responsible for project implementation. To facilitate smooth project implementation, the
MST will appoint a project coordinator, a financial management officer, a procurement officer
and a monitoring and evaluation officer. The terms of reference and CVs for these various
positions will be submitted for Bank approval. Moreover, given that the MST has never
implemented a project financed by a multilateral development bank, its services do not have
the required capacity for project implementation. The project team will, therefore, be backed
by technical assistants to be recruited on a competitive basis following an invitation for bids.
This technical assistance will be financed with Bank resources and will comprise three
specialists in the following areas: procurement, financial management, and monitoring and
evaluation. The institutional framework is described in detail in Technical Annex B3.
4.1.2 Given the number of institutions involved in project implementation, a Project
Steering Committee will be established. It will be chaired by the Ministry of Science and
Technology, and comprise the various institutions concerned. Besides the Ministry of
Science and Technology, the Steering Committee will comprise notably the Ministry of
Higher Education, the Ministry of Education, the Ministry of Industry and the Ministry of
Environment. The committee will be responsible for overall project orientation and its role
will be to facilitate consultations. It will validate the annual work plan and its budget, and
approve the annual technical and financial implementation report. The project team will
provide secretarial services for the committee which will meet once every six months.
Procurement Arrangements
4.1.3 All procurements of goods and services financed with ADB resources will be
done in accordance with Bank Rules of Procedure for the Procurement of Goods and
Works (May 2008 Edition, revised in July 2012) or, as appropriate, Bank Rules of Procedure
for the Use of Consultants (May 2008 Edition, revised in July 2012), using Bank standard
bidding documents. Only suppliers, entrepreneurs and consultants from Bank member
countries as well as goods manufactured in and works and services supplied from these
countries will be eligible for ADB financing.
4.1.4 The procurement specialist appointed by the Ministry of Science and
Technology must take several training courses in Bank Procurement Rules of
Procedure (especially during Bank fiduciary clinics and missions), and be supported by a
technical assistant. Technology park construction works as well as park and laboratory
equipment will be procured through international competitive bidding (ICB). A procurement
plan will be prepared and submitted for Bank approval. The procurement plan will cover an
initial period of 18 months and updated every year or, as appropriate, throughout the project
duration. The summary of procurement terms and conditions are outlined in Annex V and the
detailed procurement methods presented in Technical Annex B5.
Financial Management
4.1.5 The financial management (FM) of the Ministry of Science and Technology (MST)
under the Science and Technology Development Project (PDST) was evaluated by the Bank’s
Procurement and Fiduciary Services Department (ORPF.2), in accordance with the Financial
9
Management Policies for Operations Financed by the African Development Bank Group
(2014), the Financial Management Manual for Public Sector Operations financed by the
African Development Bank Group (2014) and the Guidelines for Financial Management and
Financial Analysis of Bank Group Operations (2014).
The findings of the evaluation of the financial management system (which comprised a
review of the budget system, accounting, internal control, flow of funds, financial reports and
audit of financial statements) revealed that the existing arrangements do not meet Bank
minimum requirements for ensuring that project funds are efficiently and economically used
for the purpose for which they are intended. On the whole, the residual risk level of financial
management is deemed moderate. The financial management arrangements for mitigating
risks are summarized below.
Budget System: the annual project budget will be prepared on the basis of Government’s
policy guidelines and the applicable national regulations. The applicable procedures for
annual project budget preparation will be taken from the administrative, accounting and
financial procedures manual to be prepared and completed within the six (6) months
following project launching. The annual project work plans and budgets will be prepared by
the Project Executing Agency with the support of all beneficiaries of project resources, and
then submitted to the Project Steering Committee and the Bank for approval.
Accounting System: the accounting system to be established for the PDST could be cash
accounting and the accounting principles could be those in force in Angola, which are similar
to international public sector accounting standards (IPSAS). This accounting system will
have to be automated. Hence, the project will acquire an automated accounting package
which will be used to record all transactions and report, in due course, on the management of
project funds. An administrative, accounting and financial procedures manual for the project
will be prepared by a consultant and will contain, in the form of clear and precise
instructions, all routine project operations and financial information disclosure obligations.
Internal Control and Administrative and Accounting Management (AAM): for the
purposes of this project, the Bank will carry out regular supervision in the form of reviews of
documents and procedures, and regular field visits to ensure that the Project Executing
Agency administers the appropriate internal control systems and complies with the main
procedures. The administrative, accounting and financial procedures to be followed by the
Project Executing Agency will be documented in the Administrative, Accounting and
Financial Procedures Manual that will be prepared for this project.
4.1.6 Disbursements under this project will be in accordance with the rules and
procedures set out in the Bank’s disbursement manual. The payment methods adopted
under this project for expenditure to be financed with loan resources are the direct payment
method, the reimbursement method and the special account method. The special project
account will be opened in a commercial bank under terms and conditions acceptable to the
Bank. The Bank will issue a disbursement letter describing the project disbursement process
in detail.
4.1.7 The Project Executing Agency will be required to submit consolidated
quarterly progress reports comprising all the sources of financing and project
expenditure during the quarter. This report must be submitted to the Bank within 45 days
following the end of each quarter. In addition, at the end of each financial year, the Project
Executing Agency must produce annual financial statements in accordance with international
public sector accounting standards (IPSAS) relating to financial information using the cash
accounting method. These statements will comprise at least: (i) a statement of resources
received and payments made under the project during the year; (ii) a statement of certified
expenditure for the period; (iii) a comparative statement of the project budget and effective
10
expenditure; (iv) a statement of commitments for the period; (v) the accounting principles
adopted and related explanatory notes; and (vi) a declaration by the official of the Project
Executing Agency stipulating that project funds have been used for the intended purposes
specified in the project financing agreement.
4.1.8 The annual project financial statements will be audited by an independent
private external auditor recruited on a competitive basis. The external auditor will be
recruited nine months after project launching. The project financial statements will be audited
in accordance with Bank-approved audit terms of reference, and the audits will be conducted
in accordance with international standards of auditing (ISA) as promulgated by the
International Federation of Accountants (IFAC), and the audit report, including the letter to
Management, will be submitted to the Bank no later than 6 (six) months after the end of the
financial year under review, in accordance with the financial clauses of the legal agreements.
Audit costs will be paid with ADB loan resources.
4.2 Project Monitoring and Evaluation
4.2.1 The MST and the Bank will jointly ensure project monitoring and evaluation.
To that end, the Country Office will play a crucial role. The Country Office’s role
primarily concerns dialogue with the national party, this role being more important in this
case given the linguistic context. It also concerns support to the project management team
through regular training in Bank procurement, financial management and disbursement
procedures.
4.2.2 A monitoring and evaluation specialist will ensure the internal monitoring and
evaluation of project activities and project logical framework indicators. Under the
supervision of the Project Coordinator, the management team will prepare quarterly and
annual progress reports which will be submitted to the Bank. All reports must comply with
Bank formats. Gender-disaggregated data will be provided in the reports. Supplementary
basic data will be collected, as appropriate, in accordance with the performance indicators
adopted for the project.
4.2.3 The external monitoring and evaluation system will be designed on the basis of
the outcome and output indicators defined in the logical framework. In addition, the
Bank will undertake at least two (2) supervision missions yearly. The Bank Country Office in
Angola (AOFO) will coordinate all monitoring missions and also ensure close project
implementation monitoring. At the end of thirty (30) months of implementation, the project
will undergo a mid-term review which will examine the progress made in relation to the
logical framework indicators and the annual activity plans. The borrower and the Bank will
jointly prepare the project completion report. The implementation schedule of the main
activities is summarized as follows:
Table 4.1: Monitoring Phases and Feedback Loop Duration Phase Monitoring Activities/Feedback Loop
October 2015 Loan Approval by the
Board of Directors
Answers to Questions by Executive Directors, Notification to
Government
January 2016 Launching Mission Project Launching Mission, Training of Project Team Members
2016-2020 Implementation of
Activities Supervision Missions, Disbursements, Audits
July 2018 Mid-term Review Update on Project Progress, Project Modifications.
December 2020 Completion Report Review of Project Achievements, Analysis of Disparities Between
Objectives and Achievements, Lessons to be Learned
March 2021 Project Closure Closing of Accounts, Cancellation of Balances, Repayment to the Bank
of Special Account Balances, Where Applicable
11
4.2.4 Impact assessment will be part and parcel of monitoring and evaluation. To that
end, the project will support the establishment of an intellectual property database, as well as
a business development database relating to the activities of the science and technology park
and research centres in general. These information systems will thus help to assess long-term
project impacts, notably through the establishment of start-ups, their development and
lifespan, the number of jobs created, the income they will generate, etc.
4.3 Governance
4.3.1 The Bank’s experience in Angola shows serious difficulties in project
implementation. Moreover, the Ministry of Science and Technology, which will be
responsible for project implementation, is a newly created ministry with no experience in the
implementation of projects financed by multilateral development banks.
4.3.2 The procurement, financial management, disbursement procedure and
monitoring and evaluation technical capacity of the services of the Ministry of Science
and Technology will be built. In PDST implementation, the Bank’s usual internal accounts
control and audit system will be used throughout project implementation. In this connection,
measures will be taken under the PDST to mitigate the risk related to the project fiduciary
framework, especially through Bank control of the procurement process by issuing no
objection opinions on competitive bidding documents, proposals for contract award,
contracting and contracts, disbursement procedures, as well as supervision missions and
annual external project audits.
4.3.3 Concerning project financial governance, the Ministry of Science and
Technology will keep separate project accounts using software acquired with ADB loan
resources for cost accounting and the production of reports showing expenditure by
component, by category and by source of financing. Project accounts will be audited annually
by an external auditing firm recruited for that purpose. Financial and audit reports will be
submitted to the Bank within the six months following closure of the accounting year.
4.4 Sustainability
4.4.1 Project sustainability will be ensured by the park’s administrative and financial
autonomy, the implementation of income-generating activities, as well as the policy and
financial priority given to the development of science and technology. In fact, the legal
status provided for the operation of the science and technology park is that of a private non-
profit association which enables it to enjoy administrative and financial autonomy and, thus,
be able to adapt to changes in the economic context in which its activities are to be
implemented. This autonomy will also enable it to generate own resources as provided for in
its objectives. Own resource-generating activities will include: implementation of research
projects financed by enterprises, conduct of tests and certification, training activities, hiring
of technology park halls, etc.
4.5 Risk Management
4.5.1 The project implementation risks identified are linked to the capacity of the
Ministry of Science and Technology and to project design elements. The risks include: (i)
low private sector involvement in technology park activities; (ii) weak institutional capacity
and lack of skilled human resources for project implementation and monitoring and
evaluation; and (iii) low retention of researchers trained under the project. The table below
presents measures to mitigate the risks identified.
12
Risk Level Mitigation Measure
Low private sector involvement in
technology park activities Moderate
Granting legal and financial autonomy to the science and
technology park
Industrial private sector involvement in technology park
design and project implementation
Weak institutional capacity and
lack of skilled human resources
for project implementation and
monitoring and evaluation
High
Establishment of an appropriate implementation
mechanism and recruitment of qualified specialists to back
MST in project implementation
Low retention of researchers
trained under the project High
Provision of sufficient incentives to retain trained
researchers, including a ten-year contract of employment
4.6 Knowledge Building
Knowledge building is the main project objective, given the sector and nature of the
activities financed. The project will contribute to knowledge building through the
identification of technological solutions to the problems of enterprises, technology transfer
and innovations which will be backed by the industrial incubator. It will also support
knowledge building by training many engineers and researchers in the targeted economic
sectors. Lastly, the project will provide various forms of technical assistance for research
project assessment, strengthening the framework for the training of secondary school
teachers, establishing the industrial property database, etc.
V. LEGAL FRAMEWORK
5.1 Legal Instrument
The financing instrument proposed to the Republic of Angola is a USD 90 million ADB loan.
5.2 Conditions for Bank Intervention
5.2.1 Conditions Precedent to Loan Effectiveness: ADB loan effectiveness shall be
subject to fulfilment by the Borrower of the conditions set forth in Section 12.01 of Bank Group
General Conditions Applicable to Loan Agreements and Guarantee Agreements.
5.2.2 Conditions Precedent to First Disbursement of Loan Resources: in addition to loan
agreement effectiveness, the first disbursement of loan resources shall be subject to fulfilment by
the Borrower, to the Bank’s satisfaction, of the following conditions: (i) appointment of a
project coordinator, whose qualifications and experience would have been considered
acceptable by the Bank; (ii) recruitment, on a competitive basis, of a financial management
specialist and a procurement specialist, with the requisite qualifications and experience; (iii)
opening of a special account, in a bank acceptable to the ADB, to receive project resources;
and (iv) forwarding to the Bank, evidence that the project site has been put at the disposal of
MST and that it is authorized to use and build on the said site set aside for the Science and
Technology Park..
5.2.3 Other Conditions: the other conditions are: (i) preparation and adoption of the
Administrative and Financial Procedures Manual no later than twelve months following
effectiveness of the project; (ii) purchase and installation of the accounting software no later
than twelve months after effectiveness of the project; and (iii) appointment of Bank-approved
private external auditors within nine months following effectiveness of the project; and (iv)
forwarding to the Bank, no later than twenty four months after effectiveness of the project,
the title deeds indicating that the MST is the legal owner of the site earmarked for
construction of the Science and Technology Park..
13
5.3 Compliance with Bank Policies
This project is consistent with applicable Bank policies. It will be implemented within the
framework of the Bank’s intervention strategy in Angola contained in the 2011-2015 CSP as
well as the Bank’s 2013-2022 Strategy.
VI. RECOMMENDATION
Management recommends that the Board of Directors approve the proposal to grant a USD
90 million ADB loan to the Republic of Angola for the purpose and under the conditions set
forth in this report.
I
Annex
Country Comparative Socio-economic Indicators
Year Angola Africa
Develo-
ping
Countries
Develo-
ped
Countries
Basic Indicators
Area ( '000 Km²) 2014 1 247 30 067 80 386 53 939Total Population (millions) 2014 22,1 1 136,9 6,0 1,3Urban Population (% of Total) 2014 61,5 39,9 47,6 78,7Population Density (per Km²) 2014 17,8 37,8 73,3 24,3GNI per Capita (US $) 2013 5 170 2 310 4 168 39 812Labor Force Participation - Total (%) 2014 70,0 66,1 67,7 72,3Labor Force Participation - Female (%) 2014 46,2 42,8 52,9 65,1Gender -Related Dev elopment Index Value 2007-2013 ... 0,801 0,506 0,792Human Dev elop. Index (Rank among 187 countries) 2013 149 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2008-2013 43,4 39,6 17,0 ...
Demographic Indicators
Population Grow th Rate - Total (%) 2014 3,1 2,5 1,3 0,4Population Grow th Rate - Urban (%) 2014 4,3 3,4 2,5 0,7Population < 15 y ears (%) 2014 47,3 40,8 28,2 17,0Population >= 65 y ears (%) 2014 2,4 3,5 6,3 16,3Dependency Ratio (%) 2014 91,0 62,4 54,3 50,4Sex Ratio (per 100 female) 2014 98,4 100,4 107,7 105,4Female Population 15-49 y ears (% of total population) 2014 22,4 24,0 26,0 23,0Life Ex pectancy at Birth - Total (y ears) 2014 52,3 59,6 69,2 79,3Life Ex pectancy at Birth - Female (y ears) 2014 53,8 60,7 71,2 82,3Crude Birth Rate (per 1,000) 2014 43,5 34,4 20,9 11,4Crude Death Rate (per 1,000) 2014 13,6 10,2 7,7 9,2Infant Mortality Rate (per 1,000) 2013 101,6 56,7 36,8 5,1Child Mortality Rate (per 1,000) 2013 167,4 84,0 50,2 6,1Total Fertility Rate (per w oman) 2014 5,8 4,6 2,6 1,7Maternal Mortality Rate (per 100,000) 2013 460,0 411,5 230,0 17,0Women Using Contraception (%) 2014 17,7 34,9 62,0 ...
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2004-2012 16,6 46,9 118,1 308,0Nurses (per 100,000 people)* 2004-2012 166,0 133,4 202,9 857,4Births attended by Trained Health Personnel (%) 2009-2012 47,3 50,6 67,7 ...Access to Safe Water (% of Population) 2012 54,3 67,2 87,2 99,2Healthy life ex pectancy at birth (y ears) 2012 44,0 51,3 57 69Access to Sanitation (% of Population) 2012 60,1 38,8 56,9 96,2Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2013 2,4 3,7 1,2 ...Incidence of Tuberculosis (per 100,000) 2013 320,0 246,0 149,0 22,0Child Immunization Against Tuberculosis (%) 2013 85,0 84,3 90,0 ...Child Immunization Against Measles (%) 2013 91,0 76,0 82,7 93,9Underw eight Children (% of children under 5 y ears) 2005-2013 15,6 20,9 17,0 0,9Daily Calorie Supply per Capita 2011 2 400 2 618 2 335 3 503Public Ex penditure on Health (as % of GDP) 2013 2,5 2,7 3,1 7,3
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2011-2014 140,5 106,3 109,4 101,3 Primary School - Female 2011-2014 109,6 102,6 107,6 101,1 Secondary School - Total 2011-2014 31,5 54,3 69,0 100,2 Secondary School - Female 2011-2014 24,8 51,4 67,7 99,9Primary School Female Teaching Staff (% of Total) 2012-2014 36,8 45,1 58,1 81,6Adult literacy Rate - Total (%) 2006-2012 70,6 61,9 80,4 99,2Adult literacy Rate - Male (%) 2006-2012 82,5 70,2 85,9 99,3Adult literacy Rate - Female (%) 2006-2012 59,1 53,5 75,2 99,0Percentage of GDP Spent on Education 2009-2012 3,5 5,3 4,3 5,5
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2012 3,9 8,8 11,8 9,2Agricultural Land (as % of land area) 2012 0,5 43,4 43,4 28,9Forest (As % of Land Area) 2012 46,7 22,1 28,3 34,9Per Capita CO2 Emissions (metric tons) 2012 1,5 1,1 3,0 11,6
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update :
UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports.
Note : n.a. : Not Applicable ; … : Data Not Available.
AngolaCOMPARATIVE SOCIO-ECONOMIC INDICATORS
septembre 2015
0
20
40
60
80
100
120
140
2000
2005
2008
2009
2010
2011
2012
2013
Infant Mortality Rate( Per 1000 )
Angola Africa
0
1000
2000
3000
4000
5000
6000
2000
2005
2007
2008
2009
2010
2011
2012
2013
GNI Per Capita US $
Angola Africa
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
2000
2005
2008
2009
2010
2011
2012
2013
2014
Population Growth Rate (%)
Angola Africa
01020304050607080
2000
2005
2008
2009
2010
2011
2012
2013
2014
Life Expectancy at Birth (years)
Angola Africa
II
Annex II
Portfolio of Active National Projects as at 30 June 2015
Operation Approval Date Amount
Approved
Amount
Disbursed
Disbursement
Rate
Closing
Date Age Status
Agricultural Sector
BOM JESUS Rural Development Project 24/11/2005 17 200 000 9457040.3 54.98 30/06/2016 9.60 NON PP / NON PPP
Study on Agricultural Development in Cabinda Province 22/12/2014 420 045 0 0.00 30/06/2016 0.52
Fisheries Sector Support Project 15/05/2013 20 000 000 0 0.00 30/06/2019 2.12
Water and Sanitation Sector
Sumbe Water Supply, Sanitation and Institutional Support
Project 28/11/2007 12 000 000 4207222.42 35.06 31/12/2016 7.59 NOT PP / NOT PPP
Institutional Support for Sustainable Urban Water Supply
and Sanitation Service Delivery 01/04/2015 100 120 370 0 0.00 31/12/2020 0.24
Energy Sector
Electricity Sector Reform Support Programme 13/05/2014 711 045 379 426627227.4 60.00 20/12/2016 1.13 NOT PP / NOT PPP
Environment Sector
Environment Sector Support Project 11/03/2009 12 000 000 5175900.07 43.13 31/12/2015 6.30 NOT PP / NOT PPP
Social Sector
Poverty Reduction Institutional Capacity Building 23/02/2011 4 920 000 2097193.61 42.63 31/12/2015 4.35 NOT PP / NOT PPP
Study on Higher Education Financing and Private Sector
Involvement 14/02/2014 398 478 0 0.00 31/12/2014 1.37
Transport Sector
Study to Update the National Transport Sector Master Plan 17/09/2013 2 900 000 0 0.00 31/12/2016 1.78 PP
Multi-sector
Financial Management Support Project 14/11/2007 5 900 000 861198.08 14.60 31/12/2016 7.63 NOT PP / NOT PPP
Private Sector Development Institutional Capacity Building
Project 17/09/2014 17 670 900 0 0.00 31/12/2019 0.78 NOT PP / NOT PPP
Total
904 575 171 448 425 782 49.57
3.62
* SAP: PP (Problematic Project); PPP (Potentially Problematic Project); ARP (At-Risk Project = Project Classified as PP or PPP) ; S (Satisfactory Project)
III
Annex III
Matrix of Development Partners’ Activities in Angola
Thrust Areas
Bilateral Partners Multilateral Partners
Ger
man
y
Bel
giu
m
Sp
ain
Fra
nce
Ital
y
Isra
ël
Net
her
lan
ds
Po
lan
d
Po
rtu
gal
Un
ited
Kin
gd
om
Sw
eden
Jap
an
Un
ited
Sta
tes
No
rway
Den
mar
k
Bra
zil
Ind
ia
Ch
ina
AD
B
Eu
rop
ean
Un
ion
UN
DP
UN
ICE
F
ILO
Wo
rld
Ban
k T
O
T
A
L
Agriculture X X X X X X X X X X X 11
Capacity Building X X X X X X X X X X X X X X 14
Civil Society Reinforcement X X X X X X X X X X X 11
Decentralization X X X X X X X X X X 10
Economic Growth X X X 3
Economic Management Policies X X X X X 5
Education, Science and Technology X X X X 4
Energy X X X X X 5
Environment X X X X X X X 7
Fisheries X X 2
Food Security X X X X X 5
Health and HIV/AIDS X X X X X X X X X X X X 12
Human Rights and Democracy X X X X X X X X 8
Justice X X X X X 5
Oil Sector X X X 3
Governance X X 2
Private Sector Development X X X X X X X X 8
Public Administration X X X X X X 6
Public Finance Management X X X X 4
Regional Integration and Trade X X X X 4
Roads and Transport X X X 3
Telecommunications and Information Technologies X 1
Water and Sanitation X X X X X X X X X X 10
Other Areas
Demining X X X 3
Gender X X 2
Urban Development X 1
Youth Employment and Sport X X 2
IV
Annex IV
Map of the Project Area
Warning: This map has been provided by the staff of the African Development Bank exclusively for the use of the readers of
the report to which it is attached. The names used and the borders shown do not imply on the part of the ADB Group and its
members any judgment concerning the legal status of a territory or any approval or acceptance of these borders.
V
Annex V
Brief Presentation of Procurement Arrangements
USD Million
Use of
NPP or
NPS
Use of Bank
Rules of
Procedure
Contracts
not Financed
by the Bank
Total
1. Works
1.1 Construction of Technology Park 39.323 39.323
1.2 Development Works (Water, Electricity, etc.) 0.562 562
2. Goods
2.1 Procurement of Furniture (Technology Park) 1.124 1.685
2.2 Laboratory Equipment 3.932 3.932
2.3 Research Equipment (Small Capital Goods and
Sundry Equipment) 0.639 0.639
2.4 Secondary School Laboratory Equipment,
including Training in their Use 1.383 1.383
2.5 Reinforcement of Intellectual Property
Management: Establishment of an Intellectual
Property Database (Equipment)
0.240 0.240
2.6 IAPI Equipment 0.112 0.112
2.7 Computer Hardware (Project) 0.056 0.056
2.8 Vehicles (Project) 0.067 0.067
2.9 Procurement of 3 Computer Stations for
Computerized Accounting and Management System 0.013 0.013
2.10 Database on Business Development and Job
Creation (Equipment) 0.115 0.115
3. Consultancy Services
3.1 Studies and Works Supervision by Engineering
Firms 3.932 3.932
3.2 Technical Assistance for Construction of
Technology Park 1.142 1.142
3.3 Cohort Study on Gender-based Disparities in
Science and Technology 0.432 0.432
3.4 Establishment of a National System for Training
in Methodology (Preparation of Modules and
Training) 2.995 2.995
3.5 Training of Laboratory Technicians: Consultants 0.404 0.404
3.6 Establishment of an Equipment Maintenance
System (Technology Park, Existing Research Centres
and Secondary Schools): Consultant (Including
Database and Inventory of Existing Equipment)
0.288 0.288
3.7 Support to Counselling Services: Preparation of
Modules and Trainer (Consultants and Training of
Trainees)
1.939 1.939
3.8 Creation of the Technology Park Website 0.432 0.432
3.9 Production of a Cartoon on Science and
Technology 0.270 0.270
3.10 Reinforcement of Intellectual Property
Management: Establishment of an Intellectual
Property Database (Design - Consultant) 0.404 0.404
3.11 Training of IAPI Senior Officers 0.112 0.112
3.12 Analyses of National Intellectual Property
Systems and Proposal for Improvement 0.288 0.288
3.13 Development of a National Scientific Data
Management Policy 0.288 0.288
3.14 Procurement Specialist (TA) 0.888 0.888
3.15 Financial Management Specialist (TA) 0.888 0.888
3.16 Accounting and Financial Management 0.066 0.066
VI
Software (formatting, Licencing, Training)
3.17 Preparation of a Project Administrative and
Financial Procedures Manual 0.067 0.067
3.18 Monitoring and Evaluation Specialist (TA) 0.888 0.888
3.19 Database on Business Development and Job
Creation (Consultant) 0.441 0.441
3.20 Project Mid-term Review 0.153 0.153
3.21 Final Project Evaluation 0.173 0.173
3.22 Project Auditing 0.639 0.639
4. Miscellaneous
4.1 Environmental and Social Impacts 1.124 1.124
4.2 Reinforcement of Research Teams (MA,
Engineering, Doctorate and Post-doctorate
Scholarships) and Research Project Financing 14.233 14.233
4.3 Scholarships and Research Project Financing
(Gender) 8.110 8.110
4.4 Trainee Scholarships (National System for
Training in Methodology) 1.603 1.603
4.5 Training of Laboratory Technicians: Trainee
Scholarships 0.081 0.081
4.6 Support to Counselling Services: Organization of
Regional Counselling Seminars 2.932 2.932
4.7 National Science and Innovation Awards 1.054 1.054
4.8 Organization of Inventors’ Fair 0.616 2.581 3.197
4.9 Science and Technology Promotion (Debates,
Feature Articles, Conferences, Drama, etc.) 0.639 0.639
4.10 Organization of a National Science and
Technology Conference 0.639 0.639
4.11 Reinforcement of Intellectual Property
Management: Dissemination of National and
International Regulations and Procedures (Seminar) 0.633 0.633
4.12 Functioning of PMT (Office Equipment and
Consumables, Communication, Vehicle
Maintenance, Upkeep, Fuel, Insurance, Daily
Subsistence Allowance)
0.291 0.291
4.13 Project Coordinator 0.153 0.153
4.14 Financial Management Specialist (Civil
Servant) 0.115 0.115
4.15 Monitoring and Evaluation Specialist (Civil
Servant) 0.115 0.115
4.16 Procurement Specialist (Civil Servant) 0.115 0.115
4.17 PMT Secretary 0.115 0.115
4.18 PMT Driver 0.153 0.153
Grand TOTAL : 0.614 89.386 10.000 100.000
VII
Annex VI
Rationale for Financing 90% of PDST Cost with ADB Resources
After 27 years of civil war, Angola has overcome many handicaps to become the third
economic power in Africa, behind Nigeria and South Africa. According to data contained in
the National Science, Technology and Innovation Policy (PNCTI, Política Nacional de
Ciência, Tecnologia e Inovação), at independence in 1975, there were only three university
graduates in Angola, against 5 000 in 2002 when peace was restored. However, much effort is
still required for Angola to acquire the capacity needed to implement and take advantage of
the National Science, Technology and Innovation Policy. A number of studies conducted by
international organizations on innovation issues, systematically rank Angola at the bottom of
the innovation classification list. So, according to data from the Global Competitiveness
Report 2014-2015 (published by the World Economic Forum), Angola is ranked at the bottom
of the list of countries with respect to key indicators of the impact of science and technology
on productive activities, notably: innovation capacity (142nd out of 144 countries surveyed,
with an average score of 2.7 on a scale of 1 to 7); quality of scientific research institutions
(142nd out of 144 countries, with an average score of 1.9); and collaboration between
university institutions and the industrial private sector in research and development (142nd out
of 144 countries surveyed, with an average score of 2).
The project will contribute to Government’s efforts to reduce poverty through industrial
development and economic diversification. This project mainly seeks to create the necessary
conditions for science, technology and innovation to have a greater impact on the national
economy. In so doing, the Bank intends to establish appropriate entities to foster the
development of a knowledge-based society and ensure the transfer of its benefits to the entire
economy. The project was prepared in a context of a sharp drop in oil prices which recently
compelled the Government to reduce the price of oil in the 2015 State Budget, adopting a
price assumption of USD 40 per barrel, against USD 80 initially projected. Given such
adjustment of major macro-economic impacts, the Government was forced to significantly
reduce its expenditure. With a projected average price of USD 55 per barrel in 2015, the
country should record a huge budget deficit of about USD 14 billion (that is 7.6% of GDP),
which reduces the leeway for expenditure in general, and investment in particular.
In light of the foregoing, it is proposed that 90% of total project cost be financed with an
African Development Bank loan, and 10% with national counterpart contribution instead of
the 50% required in the case of the Republic of Angola. This request is the result of the sharp
decrease in total public revenue (a shortfall of about 35.7% compared with revenue for 2014)
owing to falling oil prices. In fact, the share of the State budget allocated for science,
technology and innovation dropped from 0.54% in 2014 to 0.3% in 2015. Nevertheless, the
Government attaches special importance to the promotion of science, technology and
innovation as attested to by the National Development Plan (NDP) 2013-2017 and the
National Skills Development Plan (Plano Nacional de Formação de Quadros - PNFQ). As
underscored in the policy on expenditure eligible for Bank Group financing, the country’s
commitment should not only be measured by the Government’s counterpart contribution, but
also by its strategic commitment to the project’s development goal.
VIII
1. Country’s Commitment to Implementing its Comprehensive Development
Programme
Despite real macro-economic progress (12.8% non-oil GDP annual growth between 2003 and
2013), Angola’s social situation is by far worse than in countries with a comparable level of
income. There are great income inequalities, with the wealthiest 10% possessing one third of
total national income. The incidence of poverty is estimated at 37% of the total population,
60% of whom live in rural areas. The under-five mortality rate is 167.4 deaths per 1000 live
births, against 43.4 per 1000 in middle–income countries. Thus, life expectancy at birth in
Angola is 51.9 years, whereas it is 70 years on average in middle-income countries. In the
area of education, the primary school completion rate in Angola is 54.3 %, against 95.6% in
middle-income countries. Concerning employment, the unemployment rate is only 5.2% in all
middle-income countries, whereas it is 26 %5 in Angola.
To achieve human development and reduce poverty, the country has prepared a National
Development Plan (NDP) 2013-2017 which seeks to promote human development and the
well-being of Angolans, improve the quality of life and combat hunger and extreme poverty.
It comprises eight main thrusts for Angola’s development, namely: (i) ensuring national unity
and cohesion; (ii) building a democratic and participatory society to guarantee fundamental
freedoms and rights, and civil society development; (iii) promoting human development and
the well-being of Angolans to improve the quality of life and combat extreme poverty; (iv)
fostering sustainable, competitive and equitable development to guarantee the future of
coming generations; (v) promoting the development of science, technology and innovation;
(vi) supporting entrepreneurship and private sector development; (vii) ensuring the
harmonious development of the national territory; and (viii) promoting the competitive
integration of the Angolan economy into the global and regional contexts.
Summary of National Development Plan 2013-2017 Implementation: Angola’s National
Development Plan 2013-2017 provides for the implementation of 390 structuring projects for
an estimated total cost of USD 63 billion (of which 84.5% of public financing and 15.5% of
private financing). Priority projects concern energy (67.3%), the water sector (11.2%) and
programmes for the reconstruction of secondary, higher and vocational training centres
(7.8%). NDP 2013-2017 implementation has been impeded by the drop in tax revenue owing
to falling oil prices. Nonetheless, the Government has already made progress in the energy
sector and committed about USD 12 billion for the period 2011-2018 in the construction of
new hydroelectric dams and the rehabilitation of small hydroelectric systems and thermal
power plants. The total amount of investments required in the energy sector stands at USD 23
billion for the entire NDP implementation cycle. The Government also invested about USD
2.2 billion in the water sector over the 2011-2014 period. Other projects costing USD 3.7
billion are awaiting financing with the support of development partners. Angola has also
made considerable progress towards financing infrastructure reconstruction and expansion,
especially roads, ports, railways and telecommunications. Although the country currently
spends close to USD 4.3 billion in infrastructure annually, there is need to improve
management and maintenance. The Government has realized the need for economic
diversification and has embarked on a number of infrastructure projects to link urban and
rural areas and promote the development of agriculture and entrepreneurship in order to foster
job creation. A total of 39 projects with the potential to foster structural transformation have
been identified. On the whole, NDP 2013-2017 implementation has fallen short of
expectations and the goal of increasing the average GDP growth rate to 7% may be
5 African Economic Outlook 2015
IX
jeopardized by the currently unfavourable macro-economic environment. For example, in
2015, the Government has already been forced to reduce total expenditure by about USD 14
billion, after halving its oil price assumptions to USD 40 per barrel. This adjustment is
expected to increase the budget deficit to 7% of GDP in 2015, against 3.1% in 2014, and
reduce the capacity to invest in structural transformation projects, particularly in the
construction, energy, water, education and health sectors.
The science, technology and innovation sector in particular has been given pride of place in
the industrialization and economic diversification strategy. The sector has also been given
prominence in the National Skills Development Plan (PNFQ). The plan thus comprises an
action plan for training and building the capacity of higher education teachers and researchers.
According to PNFQ, Angola should produce 130 doctorate and 480 master’s degree holders
by 2017. In addition, the National Science, Technology and Innovation Policy provides for
the preparation of an Annual Science, Technology and Innovation Plan (PLANCTI, Plano
Annual de Ciência, Tecnologia e Inovação) comprising concrete short-term projects. Hence,
the National Technology Centre and the National Centre for Information Technologies were
established or rehabilitated in 2011.
Mechanisms being prepared could contribute to better incorporating science, technology and
innovation initiatives into the economy. They include the law on scientific research and
technology, as well as the National Science and Technology Development Fund. In addition,
private investments in science, technology and innovation should be stimulated following the
recent approval of two important measures. Firstly, there is the establishment of FACRA,
Angola’s pioneer venture capital fund, with USD 250 million to invest in innovative
technologies and, secondly, the law on sponsorship (Lei do Mecenato) which allows for the
deduction of expenses from its taxes to support science, technology and innovation.
2. Financing Allocated by the Country to the Sector Targeted by Bank Assistance
The achievement of these objectives will require investments in physical infrastructure as well
as policy and sector reform measures to ensure the long-term viability and contribution of the
sector to the entire economy. In that connection, for the period 2013-2017, the National
Development Plan allocates an indicative amount of USD 80 million for the implementation
of the National Science, Technology and Innovation Policy, which represents 0.13% of total
NDP disbursement. The PNFQ provides for an additional allocation of USD 230 million to
science, technology and innovation. According to PLANCTI 2013, nearly USD 680 million
has been allocated to STI projects, of which USD 420 million to ongoing projects. The PNFQ
is mainly financed by each Ministry, while coordination activities are the responsibility of the
Presidency which allocated USD 250 million for 2015.
3. Country’s Budget Situation and Debt Level
According to African Economic Outlook (AEO) 2015, the current low oil prices should lead
to a significant public expenditure reduction in Angola and a resulting slowdown in GDP
growth to 3.8% in 2015, recording a decline compared with the 4.5% growth rate in 2014.
The overall budget balance, which showed a surplus over the last four years, recorded a
deficit of about 2.8% of GDP in 2014 which is expected to worsen to 7.6% of GDP in 2015.
The country’s international reserves, which stood at USD 26 billion at end-December 2013 (6
months of import cover), have already declined to USD 3 billion since June 2014. Falling oil
prices will also lead to a 28.4% reduction in foreign exchange reserves compared with 2014.
They are expected to stand at USD 19.2 billion in 2015 on average (about 5.6 months of
import cover). This decline in foreign exchange reserves will have a negative impact on the
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nominal exchange rate of the local currency which is expected to depreciate by 11% to 114
AON/USD at end-2015, and further depreciate by 6% in 2016 owing to the drop in oil
revenue.
In such a context, the country’s current capacity to mobilize resources for financing project
national counterpart contributions is limited. In fact, the drop in oil prices should worsen the
country’s current account deficit from 2.7% in 2014 to 5.9%, according to AEO estimates.
The resulting decrease in revenue has already reduced Government’s capacity to mobilize
resources to finance major infrastructure projects and capacity building initiatives. Some
infrastructure development programmes being implemented in the road, energy and
telecommunications sectors, including social (health, education, water and sanitation)
infrastructure, have thus been postponed due to lack of resources. The proposed project could
make an essential contribution to enable the Government to continue its economic
diversification and poverty reduction efforts. This project should help to build the foundation
for science, technology and innovation to have a greater impact on economic activities
through the contribution of new technologies to the economy, skills development and job
creation for inclusive growth.
Despite the prospect of budgetary constraints and a difficult external position, Angola’s
external debt appears to be sustainable, although it is expected to increase from 22.1% of
GDP in 2013 to 29.2% of GDP in 2016. Moreover, the total public debt is also expected to
increase from 34.6% of GDP in 2014 to 40.3 % of GDP in 2016, as shown in Table A1
below.
Table A1
Angola’s Debt Sustainability Indicators
Description 2010 2011 2012 2013 2014 2015 (p) 2016 (p)
External Debt* 17.9 21.1 22.7 27.4 32.9 38.3 44.3
Internal Debt* 15.0 12.5 11.4 15.5 15.3 16.7 17.0
PV of Debt as % of GDP 39.8 32.2 29.6 34.6 36.6 38.8 40.3
PV of Debt as % of Exports 35.3 31.0 31.8 39.6 48.6 47.2 49.1
Debt Servicing as % of Exports 9.6 2. 4 8.5 4.4 6.5 6.9 7.5
Source: IMF Estimates, PV: Present Value, *: USD Billion, (p): Projections
Debt Management Capacity: the Government recently introduced significant debt
management improvements. In August 2014, the authorities started formulating a medium-
term debt strategy. This strategy is in keeping with Angola’s macro-economic framework and
defines medium-term objectives of currency mix and debt maturity structure, an element
which is currently lacking. The debt strategy is also expected to play an important role in
continuing the de-dollarization process. Meanwhile, Angola’s total stock of public debt
continues to increase and should reach USD 45.1 billion (about 44% of GDP) by the end of
2015, against USD 36.6 billion in 2014 (26.9% of GDP). This stock of debt comprises USD
21 billion (20.5% of GDP) of internal debt and USD 24 billion (23.4% of GDP) of external
debt. The increase in the stock of debt is due to domestic and foreign loans recently contracted
to finance various development projects, given the reduction in oil revenue. On the whole,
Angola currently does not run any risk of debt overhang, and it is considered, based on recent
debt sustainability analyses (by the Government and the International Monetary Fund), that
the country’s debt will remain within sustainable limits in the medium term.
Scope of Project Financing by External Partners: Official Development Assistance (ODA)
to Angola is insignificant, representing less than 2.1% of GDP. After many years of emphasis
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on social development projects, some major multilateral development partners have pooled
their efforts to improve joint financing of public investment expenditure management
programmes and, especially, infrastructure programme reforms. For example, the Japanese
Agency for International Development (JICA) recently approved a development policy loan
of USD 200 million following Bank approval of USD one billion to support the energy sector
reform. The World Bank has also approved a USD 450 million budget support programme
based on the operational framework of Angola’s Bank-prepared Country Strategy Paper
(CSP). Other development partners such as the European Investment Bank (EIB) and the
French Development Agency (AFD) are also exploring the possibility of investing in the
energy sector, especially in renewable energy, and have expressed interest in building on the
Bank’s experience through its CSP in order to jointly design future operations in the sector.
Conclusion
The Government of Angola has demonstrated its commitment to science, technology and
innovation through its development programme and the resources allocated to the sector.
Ninety per cent of the PDST cost will be financed with African Development Bank resources,
while the remaining 10% will be defrayed by the Government of Angola, instead of 50% as
provided for in Directive ADB/BD/WP/2007/106/Rev.2 - ADF/BD/WP/2007/72/Rev.2 of 2
May 2008 on the policy relating to expenditure eligible for Bank Group financing. This
financing breakdown takes into account: (i) the size of the project, the current commitment
levels, national budgetary constraints and the unfavourable macro-economic prospects; and
(ii) Angola’s 2005 financial parameters which allow the Bank to finance up to 100% of
project costs in the country.