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GOVERNMENT OF ANGOLA
UNITED NATIONS DEVELOPMENT PROGRAMME
Project Document

ANG/03/011 – ANGOLA ENTERPRISE PROGRAMME – SUPPORT TO THE DEVELOPMENT OF THE MICRO ENTERPRISE SECTOR IN ANGOLA



Classificação Temática
Sector ACC 02

SAS 002
Inicio do Projecto: 01 de Janeiro de 2004



Fim do Projecto: 31 de Dezembro de 2006

1




Brief Description: The project seeks to promote the development of a diverse, robust, micro, small and medium enterprise sector in Angola. This will be achieved by supporting a process to build consensus around a common vision and a national strategy for micro and small business development. As a result of investments contributing to improve the enabling environment; expanding the supply of micro and small business credit, redirecting the offer of vocational training towards the market and introducing pilot models of business development service providers, employment will be generated and incomes raised, making an important contribution to the Government’s Interim Poverty Reduction Strategy. It will also contribute to the establishment of a knowledge base on informal, micro and small business sector in Angola.
The initial phase of this innovative Public-Private Partnership will be co-funded by UNDP (US$ 1 Million) and ChevronTexaco (US$ 3 Million) in the framework of the Angola Partnership Initiative formally launched by ChevronTexaco’s Sustainable Development Company in November 2002. During the implementation of the programme UNDP will mobilize additional donors to support the programme.


On behalf of:






Signature




Date

Name and Title

Government:


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UNDP:





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Date:


INDEX

Section Page

Index…………………………………………………………………………………..…02
Umbrella Project Document on Enabling Environment…………………………………03
Annex II – Results Framework – Enabling Environment…….....…………………..…...17
Annex III – Microfinance Component………...…………………………………..……..20
Annex IV – Results Framework Microfinance Component…...……………………..….31
Annex V – Vocational Training Component…..……………………………….…..……33
Annex VI – Results Framework Vocational Training Component…….……...………...41
Annex VII – Business Development Services & Business Incubators Component......…44
Annex VIII – Results Framework BDS & Business Incubators………………..…......…56
Annex IX – Budget…..…………………………………………………………………..59
Annex I – Memorandum of Understanding UNDP – ChevronTexaco……….………....60

PART I.A. SITUATION ANALYSIS

A.1 Overview of the Micro and Small Business Sector in Angola

Since the early 1990s, Angola has been struggling to achieve a complex double transition: from war to peace and from a state-controlled economy to a market oriented one with greater popular participation. The challenges are significant but progress is being made on both fronts.


The country has experienced decades of economic distortions, caused by the centrally planned economy adopted in the years following independence in 1975, together with the war which lasted over 30 years and severely limited movement of resources around the country. This has left its mark on the country in the form of high numbers of Internal Displaced Persons (current estimates vary between 2.3 and 4 million people), the destruction of much social and economic infrastructure, structural constraints related to land, demography, agriculture and human resources; and institutional weaknesses in the public and private sectors. However, since the signing of the peace treaty on April 4, 2002, even while facing continued high inflation, the Angolan economy has begun to show dramatic signs of recovery.
The population of Angola today is approximately 13 million, with 50-60% living in urban centres. The growth rate is high, with the fertility rate at an average of 7.2 children per woman one of the highest in the world. Over two thirds of the population live in poverty, while almost one in three Angolans are extremely poor. The last Household Budget Survey conducted in 2000 –2001 shows a further increase in inequality in the country with the proportion of population living in extreme poverty estimated at almost 24 %, a substantial increase from levels recorded in 1995. Angola currently ranks 164 out of 175 countries on UNDP’s Human Development Index for 2003, and the Millennium Development Goals seem distant to achieve.
Angola is rich in natural resources, particularly in terms of agricultural and mineral assets, however economic has activity collapsed in almost all sectors except oil and diamonds. Today the country is heavily dependent on imports and highly vulnerable. Angola experienced serious macroeconomic instability characterised by very high inflation (peaking at 12000% per annum in July 1996), persistent fiscal and monetary imbalances and under- investment in the social sectors. There are two key challenges confronting the Angolan economy today. The first involves making better use of oil and diamond revenues to reduce widespread poverty and the second involves expanding and diversifying economic production. These two challenges are very much linked, as it is only through the rebuilding of the production and service sector that Angola will be able to provide employment and raise incomes. Also as virtually all inputs in the production process with the exception of unqualified labour currently must be purchased abroad, the domestic cost of production is extremely high. If productive chains may be rebuilt within Angola, prices will fall, with corresponding benefits for all the population.
Angolan small and medium enterprises face tremendous difficulties as they fight to survive and grow in this volatile economy. The formally registered enterprises are being squeezed between the officially limited profit margins and high taxes: the economic police check that no more than a 25% mark-up is being charged to the customer while a combination of monthly and annual taxes produce an effective tax rate on profits of 47%, which leaves little to the owner of the business. There is a paucity of reliable data regarding the activity in this sector: for example official figures show that between 1994 and 2001 13,636 new companies were registered, but there is no further data regarding these new enterprises.
The informal sector has become the “sector of last resort” for survival of a large proportion of the population in the cities. Although economic data on this sector is also scarce, a recent study financed by the UNDP on Urban Micro-enterprises in Angola provides some interesting information on this sector. It is estimated that more than 50% of population survive from informal sector businesses. Around 82% of operators in the informal sector are self-employed, which indicates that the sector is in its early stages of development. Approximately 74% of the informal sector is involved in commerce while barely a tenth of informal sector operators are involved in traditional productive activities such as baking, carpentry, welding. Another significant feature is the predominance of women - 47% of women worked in the informal sector in comparison with 27 % of men1.
The UNDP study found that most productive micro-enterprises operate in dilapidated premises, and are hampered by poor infrastructure and public utilities. They are undercapitalised with very limited access to credit and business services. The micro-enterprise owners in the study were unable to pay their workers regular wages and had underdeveloped entrepreneurial skills. While in the service sector, the micro-entrepreneurs were found to be more successful, with good business sense, but lacking more conventional business skills. The main constraint to expansion of these businesses was the lack of financial resources.
There are very few support services available to the smaller businesses of the country. Credit is scarce as the banks demand guarantees and documentation that many of these entrepreneurs do not possess, while the courses which improve business skills are expensive when available, and of little relevance to those who face the challenges inherent in operating at the lower end of the market. Finding qualified labor is also difficult, as the limited number of Angolan training institutions depend upon government subsidies, and seldom provide the qualifications that the private sector needs.
However, optimism is growing in many places of the country, as people become convinced that the new peace will last, and the economy begins to show signs of recovery. Angolans are returning to their homes, from the cities and countries where they were forced to make their lives during the war and they are investing in new businesses. The government is beginning to appreciate the importance of these new ventures to economic recovery and is interested in implementing supportive measures. There is more understanding of the importance of supporting the informal sector, as it will continue to employ many Angolans in the coming years, although the government continues to emphases measures that would encourage the formalization of micro-enterprises.
In this context the Angolan Enterprise Program has a tremendous opportunity to stimulate the development of the micro, small and medium enterprise sector through investing in the increase of the supply of needed services, while supporting measures to create an environment more conducive to growth.

A.2 The Problem to be addressed

It is important to diversify the Angolan economy away from the oil and diamond sectors. This will be achieved through the development of the micro, small and medium enterprise sector, which will reduce the high cost of domestic production, offer employment to the growing population, and raise incomes. The sector currently faces serious challenges to growth due to macroeconomic instability and the fragmented Angolan economy. The prolonged conflict and limited investment in basic infrastructure has meant that access to electricity, water, roads, and communications is precarious, while the many rules and regulations, onerous and complex licensing procedures and high taxes stifle investment. Although there is currently a profusion of institutions that are working to support this sector, there is no coordinated strategy.


Angolan micro, small and medium enterprises lack services, which could support their development and growth. The services that are available are concentrated in Luanda, and focussed on larger clients. Access to business development services is limited and the design and structure of such services, when available, does not sufficiently take into account the needs and realities of doing business at the lower end of the market. Literacy rates are low, especially amongst women (82% of men and only 54% of women in 2001), and the large majority of entrepreneurs whether in the informal or formal sector have few vocational skills. There are a limited number of vocational training centres in Angola, mainly located in Luanda, and their courses are not considered relevant to smaller enterprises. It appears that the most successful vocational training at this level is undertaken informally through apprenticeship schemes.
The banking system remains highly concentrated in the nation’s capital, and focussed on the higher segments of the market, which leaves the majority of Angolan enterprises with limited or no access to financial services. In the last year, the growing optimism since the end of the war together with some prodding from the Central Bank has led some banks to open up new branches in the provinces, and even target smaller business clients, but there is still a large untapped market. There are some young Angolan micro-credit initiatives offering credit to enterprises in the informal sector, but the lack of experience with appropriate methodologies is causing a lot of mistakes to be made. As the focus of the majority of programs continues to be social, aimed as the most vulnerable in society, their growth is limited.
In order to assist the government in removing barriers for private sector development in Angola, the UNDP and Chevron-Texaco are forming a partnership for the purpose of supporting productive capacity building. Investments will be made in the expansion of access to finance and other business development services for micro and small enterprises throughout the country. The Strategy, objectives and activities described below will inform the implementation of the Memorandum of Understanding, which is attached as Annex I to this Project Document.

A.3 Past initiatives and lessons learnt

Traditionally, the government has not given high priority to the micro and small business sector. However, during the 1990s, the focus of the public sector moved from large State-owned industries to medium sized private enterprises, when various subsidized credit funds were created. Recently the Ministry of Commerce has taken steps to simplify the licensing procedures for commercial enterprises. For example, decree no. 7/00 authorized the setting up the One-stop Enterprise Window (Guichet Único da Empresa), which is intended to simplify licensing procedures in all sectors. The Guichet was only formally inaugurated in August 2003.


Pioneering research by the Peruvian economist Hernando de Soto has shown that the existence of a large parallel economy is often caused by an expensive, bureaucratic and complex regulatory environment. Attempts by governments to repress the informal sector, and force the register of small enterprises operating at the margin of the law always fail. Enterprises who do not formalise their existence, are rarely doing so simply to avoid taxes (as many claim), but are often taxed quite heavily in the form of rents for market spaces, as well as extra-legal charges paid to various low-level public officials to remain in business.
Practical initiatives in a number of countries as a result of Hernando de Soto’s work have demonstrated the importance of involving all stakeholders when reviewing regulatory measures, from the informal entrepreneurs to the government officials. The availability of documentation and titles, and the processes required to obtain them must be studied carefully. In post-conflict environments such as Angola a large part of the population may lack the basic legal evidence of their entitlements (identification, proof of address, deed to property etc). Without this basic documentation, the system of contracts upon which business, banking, and the legal system operate is severely restrained. What is needed are more flexible regulations that can accommodate (without excessive charges and requirements) the economic activity currently operating beyond the law. Once new more flexible regulations are in place, incentives rather than repressive measures should be employed to encourage, rather than coerce, small businesses to register themselves.
A.4. Development Objective (Relevant Outcome)
The vision that the program intends to promote is ‘a diverse, robust, micro, small and medium enterprise sector in Angola’. Initially it is important to build consensus around a common vision and a national strategy for the development of this sector. As a result of improving the enabling environment, expanding the supply of micro and small business credit, redirecting the offer of vocational training towards the market and introducing pilot models of business development service providers, employment will be generated, and incomes will rise, making an important contribution towards the reduction of poverty.

A.5 National Institutional and Legal Framework

A number of laws and regulations have been adopted recently, including the Law of Private Investment; law 84/02 of 31 December, 2002, which defines various types of NGOs (local, regional, national, international, etc), under the regulation of the Ministry of Assistance and Social Reinsertion, who regulates their operations. But the legal and institutional framework dealing with the micro and small business sector is still fragmented, and ad-hoc, involving various institutions without a coherent strategy nor means of effective coordination. At the central level the ministries involved are Finance, Public Administration, Employment and Social Security, Fisheries, Assistance and Social Reintegration, Industry, and Family and Promotion of Women. At the provincial level, the micro-enterprise sector was the specific focus of decree 27/00 (19 May 2000), which created the Department of Micro-Enterprises, within the Provincial Directorates of Industry, Commerce, Tourism and Hotels. At the municipal and community levels, the respective administrations limit themselves to matters concerning the regulation, taxation and control of micro-enterprises rather than providing services to support the development of this sector.


A.6. Intended Beneficiaries

The project has two sets of stakeholders: Direct beneficiaries, the micro, small and medium enterprises, the investors in these businesses, the owners, and also the employees, and indirect beneficiaries, the clients of these enterprises who will enjoy access to more, better quality goods and services, and it is hoped that all the citizens of Angola will benefit from a growing, more diversified economy.


PART I.B. STRATEGY

B.1 National Commitment to achieving the Outcome

The Government’s draft Interim Poverty Reduction Strategy Paper proposes actions that can be summarized along five broad themes:




  • Undertaking economic and institutional reform;

  • Expanding the human capital base;

  • Rehabilitating social and economic infrastructure;

  • Promoting growth in the lower segments of the private sector, directly benefiting the poor through rural development, artisanal fishing, and small and micro enterprises;

  • Strengthening public sector capacity and institutions, including at the provincial and local levels.

The Government has also agreed with the World Bank a Transitional Support Strategy encompassing three main pillars: (i) enhancement of transparency, efficiency and the credibility of public sector resource management;(ii) expansion of service delivery to war-affected and other vulnerable groups; and (iii) the preparation for pro-poor economic growth.



B. 2 Strategy for the use of AEP resources

The Angola Enterprise Program (AEP) is consistent with the UNDP mandate in so far as it helps countries in their efforts to promote sustainable human development, and will be aligned with efforts to support the achievement of Millennium Goal 1: Eradicate Extreme Poverty. The project is in line with the UNDP Country Cooperation Framework 2001-2003. The UNDP will provide support to the overall strategic direction of the program and will play a greater upstream role in the area of policy support, regulation, legal frameworks and institutional-building.


Through the partnership signed in November 2002 with UNDP in the framework of the Angola Partnership Initiative (API), ChevronTexaco’s Sustainable Development Company (see Annex II) will assist Angola in its reconstruction and development efforts.
The guiding elements of the program strategy are:
Build consensus around a medium term vision, through frequent dialog between all stakeholders especially public and private sector representatives, part of a national strategy and an action plan.
Promote the development of the micro, small, and medium enterprises in all the regions of Angola, based on pilot experiences in one or two provinces.
Develop local capacity, as part of a strategy to promote sustainable institutions, which through competition, and working towards cost recovery, will continue to provide services to the micro, small and medium enterprise sector long after the Angolan Enterprise Program has ended.
Prioritise women due to their importance in the development of the family, and their prevalence in the micro enterprise sector.
Make market oriented investments which encourage the most effective use of resources, and through the strengthening of market mechanisms ensure that future resources will be invested in an efficient manner.
Work with a venture capital approach based upon pilot projects that will use a variety of diverse mechanisms and institutions to deliver services. Positive results should mobilize resources to expand the successes of the program over time.
The program strategy will include the following components:
► Working Towards an Enabling Environment.
A research unit will be established in an Angolan University, or other appropriate institution, which in partnership with international organizations and experienced researchers will work towards building a broad knowledge base on micro, small and medium enterprises, and issues pertaining to the informal sector. Through the dissemination of information and analysis, the research unit will contribute to informed public policy design.
The program will also invest in setting up a microfinance development unit, in partnership with the Central Bank (Banco Nacional de Angola). The staff of this unit will advise policy makers and regulators, centralise information regarding the supply of microfinance, and determine standards in transparency and benchmarks for the industry. Investments will be made in building the capacity of stakeholders, and the coordination of frequent dialog among different groups (public and private sectors). In this way, the Angola Enterprise Program will work towards building a consensus around a medium term vision for the development of the micro, small and medium enterprise sector. Through the implementation of a national strategy, involving all stakeholders, the Angolan economic environment will be made more conducive to investment and growth.
► Strengthen the Supply of Vocational Training and Re-direct Towards the Market.
An in-depth, national market study will be conducted to review the quality and capacity of vocational training providers, the population’s training preferences, and the demand for qualified workers from Angolan enterprises. Based upon the results of this study, a business plan for the strengthening of the vocational training market will be prepared.
The strategy will focus on diversifying the supply of training (both geographically and in types of courses), strengthening the service providers, and stimulating the flow of information between the supply and demand for vocational training. A number of pilot projects will be financed to evaluate different strategies: A variety of delivery mechanisms such as mobile training centres, on-the job training and apprenticeships will be tested, selected service providers will receive financial support to improve their infrastructure and quality of their course content and. an information service will be set up in employment centres which will offer orientation regarding available courses and the demand for qualified workers. Data regarding the preferences of visitors to the centres will be passed on to training providers, to help them provide appropriate services. Successful pilots will be replicated around the country, according to the availability of resources. Through a strategy of cost recovery and competition, leading service providers will become sustainable over time. The increased information flow between the supply and demand for training will encourage more informed investment decisions by both service providers and clients, over time leading to improvements in the quality of vocational training in Angola.

► Expand the Supply of Micro and Small Business Credit

The supply of credit will be increased through the development of the national microfinance industry and downscaling of the commercial banks. The strategy of this component will be coordinated in partnership with the microfinance development unit, located in the National Bank of Angola, which will also receive financial support, and technical assistance from the program
The Angolan microfinance industry will be strengthened through a number of capacity building initiatives and incentives for new entrants. Stakeholders will have the opportunity to visit leading international microfinance institutions and learn from their business models. Experienced microfinance specialists will be contracted to help Angolan microfinance institutions identify the investments necessary to support growth.
The best international practices in the development of microfinance will be disseminated in Angola through regular seminars and workshops. The program, together with the microfinance development unit, will coordinate a dialog among stakeholders to promote the building of a consensus around a medium term vision for the development of the sector. The program will finance market studies, and seek local investors who could partner with experienced microfinance practitioners in the founding of new Angolan microfinance institutions. Market studies will also be commissioned to examine opportunities for the commercial banks to explore regional markets, and develop new products for small and medium enterprises. The program will invest, together with interested banks, in pilots to explore these opportunities. In this way the supply of credit to the micro, small and medium enterprise sector will expand

► Introduce Pilot Models of Business Development Service Providers

A comprehensive market study will be commissioned to evaluate the demand for business development services from different segments of the market, and the capacity of current service providers and potential local partners to meet this demand. Based upon the results of this market study, four pilot service providers will be financed: An incubator will be founded in an Angolan university or other appropriate institution, initially based in Luanda, to support young graduate enterprises, a Business Center based upon an experienced partnership between SEBRAE and UNCTAD will be launched in Luanda and one other province, to identify and nurture champions among the small and medium enterprise sector, and an Angolan NGO will be selected to pioneer downscaling business services to micro-entrepreneurs, based upon a recognized methodology (e.g. CEFE which has a successful track-record teaching business skills to illiterate groups in a number of countries). The successes of these pilots will be multiplied around the country in accordance with available resources. Cost recovery of services will be prioritized with a view to promoting sustainable institutions over time.

Strategy Phased Approach

The strategy of the Angolan Enterprise Program is based upon a venture capital approach, which envisages a number of different phases of development.


The initial preparatory stage is expected to take approximately 6 months to one year, during which time the program will focus on selected investments necessary to prepare for the implementation of the individual components.
This will be followed quickly by the launch of pilot projects in each of the component areas, to evaluate the potential of a number of alternate methodologies, delivery mechanisms and partners to create an impact in the Angolan context. While some pilots will require adjustments over time to arrive at an adequate model for Angola, it is expected that a number will begin to produce positive results within 6 months to one year. Based upon reaching certain targets in the preparatory stage which include the preparation of a detailed business plan for each component and demonstrated successes with some pilot projects, a resource mobilization campaign will be undertaken to expand the program investments.
While the vocational training, business development services, and credit components are relatively independent from each other in terms of investments, goals and development paths, they each very much depend upon the enabling environment component for their eventual success. It is clear therefore that in the first stage of the implementation of the program, the focus of the investments will be in the enabling environment component. As the strategies for vocational training and BDS require a deeper understanding of the needs of different segments of the population, and the capacity of the existing providers, investments will also be made in detailed market studies. Due diligence of identified partners is also a necessary precondition to initiating program investments.
The phases of the Angola Enterprise Program are the following:


  1. Start-up

  2. Pilots

  3. 18 month Review

  4. Resources Mobilization

  5. Expansion

  6. Impact Assessment

► Start-up


In this phase the program staff must be hired, and trained. Systems will be installed, and/or adapted to produce the management reports, and provide the information necessary to direct the program, and demonstrate the transparent, effective use of resources.
Key stakeholders will be identified, and a program of raising awareness among this group will begin involving national seminars, courses, international visits and twinning arrangements. The most appropriate host institute for the micro and small business sector research centre will be selected, based upon demonstrated capacity and commitment to the goals of the program. A cost-sharing agreement will be negotiated with this institute, and international expertise contracted to support the launch of research activities (initially with a focus on the informal economy).
Expertise will be subcontracted to begin the in-depth market studies for the vocational training, BDS and credit components. As part of the market studies, potential partner institutions (government institutions, NGOs and private sector firms/banks) will be evaluated in terms of their capacity to contribute to the program.
Negotiations will begin to co-finance, together with the National Bank of Angola, a microfinance development unit. Support from international microfinance specialists will be important to support the Central Bank staff in the initial stages of this unit’s development.
The program steering committee will be formed, and early meetings will focus on coordinating the activities of the program with other Angolan development programs (FAS, FDES etc).
► Pilots
Pilot projects will be launched to assess the appropriateness of partner institutions, methodologies and delivery mechanisms. In the area of BDS, 2 business centre pilots, based upon the SEBRAE/UNCTAD methodology will initiate activities, one in Luanda, and the other in a province recommended by the market study. An Angolan NGO will begin training in the application of a methodology for raising business skills in populations which have limited education and literacy (ex: CEFE, Competency based Economies through Formation of Enterprises). A pilot incubator will be launched in an Angolan University.

Vocational training pilots will be launched, working with public sector, private sector and NGO training providers. A variety of delivery mechanisms such as ´on-the job´, mobile units, apprentice-ships, as well as traditional facilities in a number of geographical locations will be financed.


In the credit component, commercial banks who wish to explore the potential of downscaling will partner with the fund to co-finance pilots. Technical assistance by microfinance specialists will be provided to selected micro-credit providers to resolve identified constraints to growth.
► 18 month Review
After approximately 18 months, an interim review will be conducted to evaluate the program and assess its progress against the established benchmarks. Particular attention will be paid to an evaluation of the pilot projects initiated in the credit, vocational training, and BDS components. Adjustments will be made to pilot design in accordance with the results of this review. Successful pilots will be identified for future replication and expansion.
► Resource Mobilization
It is expected that within 18 months to 2 years from the beginning of the Angolan Enterprise Program, the conditions will be in place for the program to seek further funding to expand the investments, and continue coverage beyond the three-year initial phase.
The program should be able to demonstrate clear progress in the following areas: the micro and small business research centre and microfinance development unit functioning inside Angolan institutions, on-going capacity building initiatives with stakeholders, dialog between government, private sector and representatives of civil society regarding issues pertaining to the development of the micro, small and medium enterprise sector, positive results from some pilot projects, transparent program operating procedures.
Data regarding these activities together with the business plans for each component will be utilized in a campaign to mobilize resources for the expansion of the program.
► Expansion
Based upon the availability of resources, investments will be made to replicate and increase the successful pilot projects in each component throughout Angola. In this way the supply of services to the micro, small and medium enterprise sector will grow in all the regions of the country. The program, and the institutions financed will be monitored, according to predefined targets. Institutions which perform well will be rewarded with further access to funding to allow them to continue to grow rapidly.
The most successful service providers will grow, and begin to generate revenues sufficient to cover their costs. Eventually they will not depend upon the financial support of the Angola Enterprise Program, which may direct its investments towards the development of other institutions.
Less successful service providers may receive support from the program to identify institutional difficulties, and implement measures to overcome them. Prolonged failure to meet targets will lead to exclusion of the program. Institutional evaluations will be contracted on a regular basis to monitor the development of participating institutions. Cost-recovery strategies will be prioritized to discourage the dependence of participating institutions on program funding.
The program staff will be increased according to the level of activity of the program, and available resources. The time frame of the program may be extended beyond the three years determined in the original program design, according to the commitment of the partners, and available resources.
►Impact Assessment
Frequent impact assessments will be conducted to evaluate the success of the investments of the program in different regions. The use of control groups will help to isolate the benefits of the services provided by institutions financed by the program from general improvements in the economy. The results of the assessments will be utilized to adjust the strategy of the program. Positive results may be incorporated into resource mobilization efforts.


PART II. RESULTS FRAMEWORK (Attached as Annex II)

PART III. MANAGEMENT ARRANGEMENTS




A.1. Institutional and Execution Arrangements

The successful implementation of this Program requires a strong institutional setting tailored to the specific characteristics of Angola. It should aim at mobilizing and coordinating the various institutions dealing with micro and small enterprises, private sector and civil society organizations.


The implementation shall be based on the following arrangements:

The Steering Committee will include appointed representatives from the Ministry of Planning (MINPLAN), Ministry of Public Administration, Employment and Social Security (MAPESS), Ministry of Family and Promotion of Women (MINFAMU), Ministry of Commerce (MINCOM), Ministry of Finance (MINFIN), Ministry of Industry, Ministry of Fisheries, Central Bank (BNA), Network of Micro-finance Institutions (RASM), Chamber of Commerce and Industry, Angolan Women’s Entrepreneurs Federation (FMEA), Chevron-Texaco, UNDP and other entities to be identified by the promoters of the Programme.

The Steering Committee will oversee program implementation according to the agreed program objectives. It will ensure coordination among stakeholders. It will approve annual work plans and review performance and progress reports and audits. It will guide overall program monitoring and evaluation.

It will meet semi-annually or more frequently as needed.

The responsibilities of the Program Co-ordinator will include:

► Coordinating and following-up the implementation of component activities, preparing work-plans and guiding their implementation, and the supervision of contracts financed by the program.

► Ensuring technical guidance for the work, overall coherence of component activities and the circulation of information between the various stakeholders;

► Ensuring the financial management and control of the resources allocated to the program, to guarantee transparency and accountability.

► Monitoring and evaluation of overall program performance. Presentation of annual Progress Reports to the Steering Committee, partners and contributors to the Program.

► Serve as a key advocator for the program in the support of resource mobilization and communication of the program’s strategies and findings.



Execution Arrangements


The Program will be executed through the Direct Execution modality (DEX). Individual Components of the Programme will be backstopped by UN Technical Agencies, who will serve as cooperating agencies of the program: Microfinance – UNCDF; Business Development Services – UNCTAD, and ILO may provide inputs and advice for the Vocational Training component. The program will utilize a variety of delivery mechanisms from the public sector, NGOs, Universities, Church associations, private sector and banking institutions.

A.2 Monitoring, Measurement and Evaluation

The following targets have been established for the program:




  1. After 18 months, a research unit producing data on the informal sector for policy decision making should be functional

  2. After 18 months, the Government of Angola will be taking measures to implement a national strategy for the development of this sector.

  3. After 18 months the unit in the Central bank responsible for micro-finance development should be functional. There should be a prevalence of micro-finance institutions which are charging rates appropriate to cover costs. The number of micro and small businesses that have access to credit should increase from approximately 8,000 in December 2002 to 20,000 by June 2005, and to 50000 in December 2006,and to 80,000 in December 2008; After 3 years there should be a supportive environment for the development of the micro-finance sector in Angola based upon a national policy and action plan to support this sector

  4. After 18 months. 200 Trainers will have been trained to implement the vocational training strategy, and close to 1000 (one thousand) clients will have taken vocational courses. A Business Plan for expansion will have been developed. By the end or the third year it is expected that close to 2200 (two thousand two hundred) clients would have benefited from the pilot vocational training programs.

  5. After 18 months two Business Centers focusing on small and medium size enterprises will have been established and a target of 44 Trainers trained and certified. These business centers would have provided courses to approximately one thousand entrepreneurs. An Angolan NGO trained in CEFE, a recognized methodology to teach business skills to illiterate groups would have downscaled business development services to at least 200 micro-entrepreneurs. A strategy for Training of Trainers would have been developed in conjunction with local NGOs to guarantee a rapid expansion of CEFE licensed teachers throughout the country. Two Business Incubators will have been established and provided support to 30 enterprises. A Business Plan for expansion will have been prepared. After three years these centers will have trained two thousand entrepreneurs, supported 60 enterprises and will be working towards full cost recovery. At least 60% of the target group will be women.


A.2.1. Work planning, Monitoring, and reporting
The project will be monitored, evaluated and reported upon in accordance with revised UNDP monitoring and evaluation procedures, which will be made available to the management at the beginning of the program. Program Management will draw up the work-plans at the start-up of activities, and subsequently at the beginning of each calendar year. Work plans will be submitted to the Program Steering Committee (PSC) together with the Annual Project Report. Given the large variety of delivery mechanisms to be utilized for program implementation, the program will contract an independent firm to audit service providers. An annual audit plan will be developed with this firm. The overall project operations will be subject to UNDP standing audit requirements.
A.2.2. Evaluation
An in-depth evaluation will be conducted eighteen months into the implementation of the project, as part of the UNDP Monitoring and Evaluation. The terms of reference for the evaluation will be proposed by the UNDP for discussion and approval by the Steering Committee.



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