## 1.      Governance and anti-corruption reform efforts experienced a strong momentum

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### Overview and recent trajectory
- President’s Lourenço’s first administration (2017–22) achieved progress: approval of new legislation; reforms to public financial and investment management (PFM and PIM) systems; increased oversight of state-owned-enterprises (SOEs) and financial institutions; improvements in fiscal and resource management transparency; and central bank governance improvements.
- Unprecedented fight against corruption: imprisonment and prosecution of high-profile figures; creation of an anti-corruption unit; movement of the legal framework towards best international practices.
- Momentum has slowed:
  - Independent observers report slower-than-anticipated reform progress, stalled fiscal transparency, lingering high-profile investigations, and some surveys reporting growing corruption perceptions (Figure 1).
  - Angola was added to the Financial Action Task Force’s (FATF) grey list of countries with AML/CFT weaknesses (FATF, 2024).

### Framework for assessment
- Definitions:
  - Governance: broadly the “framework for exercising authority”; Fund definition: the process of managing a country, including economic, legal, and policy aspects.
  - Corruption: “the abuse of public office for private gain.” Core corrupt acts involve criminality (bribery, embezzlement, money laundering, obstruction of justice).
  - “Systemic” corruption: pervasive, ingrained pattern of behavior that becomes the norm.
- IMF macro-critical state functions covered (per IMF policy): (i) fiscal governance; (ii) financial sector oversight; (iii) central bank governance and operations; (iv) market regulation; (v) rule of law; and (vi) AML/CFT.
- Paper excludes detailed discussion of financial sector oversight and central bank governance and operations (to be covered in the forthcoming 2025 Financial Sector Assessment Program).
- Channels through which weak governance and corruption affect macro outcomes:
  - Fiscal governance: reduces domestic revenue mobilization, increases tax evasion, distorts budgetary choices, causes waste and low-quality public investment, and fosters loss-making SOEs and public banks.
  - Market regulation: complex/opaque frameworks create discretionary opportunities for exploitation and discriminatory treatment.
  - Rule of law: weak enforcement erodes trust, undermines credit and investment.
  - AML/CFT: weak frameworks undermine financial system integrity, conceal proceeds of corruption, restrict cross-border transactions, reduce capital flows, and raise the cost and reduce the volume of external financing.

### Measurement approach and indicators
- Third-party indicators (TPIs) used: Worldwide Governance Indicators (WGI, aggregated and subcomponents), International Country Risk Guide (ICRG) Political Risk Rating, WGI Control of Corruption Indicator (CCI), and Transparency International’s Corruption Perceptions Index (CPI).
- Indicators normalized to 0-100 (0 weakest / highest corruption, 100 strongest / lowest corruption).
- Pairwise correlations across TPIs for SSA (2005–22) show high correlations among governance and corruption measures (WGI, ICRG, CCI, CPI).

### Measuring initial progress and recent patterns
- Most governance progress occurred in the first two years after 2017; since then advancements have been largely timid, with stagnation particularly in voice and accountability and regulatory quality.
- Political stability and rule of law:
  - Scores for political stability and absence of violence in 2022 were below those in 2017.
  - Bertelsmann Stiftung’s Transformation Index (BTI) 2024 indicates fundamental rights (freedom of expression, association, assembly) have significantly deteriorated in recent years.
  - WGI rule of law scores have declined since 2020; World Justice Project Rule of Law index (WJP Index) 2023 points to deterioration in fundamental rights, order and security, and civil justice indicators.
- Government effectiveness:
  - Identified as Angola’s Achilles’ heel. WGI government effectiveness score declined from 2017 to 2020 and only reversed in 2021; the latest score remains below the 2017 figure.
- Corruption Perceptions Index (Transparency International):
  - CPI score: 19 in 2017 → 33 in 2023.
  - Progress aligned Angola’s CPI score with the average for Sub-Saharan Africa (SSA) and low middle-income countries (LMIC).
  - Progress has leveled off after 2022.

### Macroeconomic impact: estimated gains from governance improvements
- Literature benchmarks:
  - Mills and others (2022): improving SSA governance to the global average could increase GDP per capita by 1 to 2 percentage points per year.
  - Baum and others (2017): corruption has a negative impact on aggregate revenue performance of about 0.6 percent of GDP annually.
- Prior IMF estimate (IMF, 2018a): aligning Angola’s governance and corruption perceptions to the SSA average could increase annual real GDP per capita growth by between 0.75 – 1.25 percentage points.
- Updated findings in this paper:
  - Overall gains from improving governance and corruption perception to the SSA average are now between 0.09–0.22 percentage points (smaller because the gap between Angola’s scores and the regional average has notably reduced).
  - Only improvements in the aggregate WGI and the CCI would lead to a positive increase in GDP per capita growth (gap not entirely closed).
  - For the ICRG and CPI indicators, no gains are anticipated since Angola’s scores already exceed the regional averages.
  - WGI subcategory analysis: improving WGI subcategories to the SSA average could raise real GDP per capita growth by about 0.4 to 1.5 percentage points annually, with the largest impact from improving government effectiveness.

### Elasticities and baseline expressions used
- Governance (aggregated) — WGI:
  - g_i,t = 0.036 GOV_i,t + 0.087 GOV_i,t SSA
- ICRG:
  - g_i,t = 0.107 GOV_i,t + 0.089 GOV_i,t SSA
- Corruption (WGI CCI):
  - g_i,t = −0.02 GOV_i,t − 0.093 GOV_i,t SSA
- Corruption (Transparency International CPI):
  - g_i,t = −0.012 GOV_i,t − 0.09 GOV_i,t SSA
- WGI subcategory elasticities:
  - Voice and Accountability:
    - g_i,t = 0.004 GOV_i,t + 0.099 GOV_i,t SSA
  - Government Effectiveness:
    - g_i,t = 0.046 GOV_i,t + 0.074 GOV_i,t SSA
  - Regulatory Quality:
    - g_i,t = 0.036 GOV_i,t + 0.085 GOV_i,t SSA
  - Rule of Law:
    - g_i,t = 0.017 GOV_i,t + 0.072 GOV_i,t SSA

### Key quantitative takeaways
- CPI score: 19 in 2017 → 33 in 2023.
- Previous estimated annual gain from closing governance gap to SSA average: between 0.75 – 1.25 percentage points (IMF, 2018a).
- Updated estimated overall gains (closing to SSA average): between 0.09–0.22 percentage points.
- Estimated gains from improving WGI subcategories to SSA average: about 0.4 to 1.5 percentage points annually (largest from government effectiveness).
- Corruption’s estimated negative impact on revenues: about 0.6 percent of GDP annually (Baum et al., 2017).

### Fiscal Governance
- Fiscal transparency:
  - Shortcomings in quality and timeliness of government finance statistics and fiscal reporting have been addressed since 2017; inconsistencies between below and above the line data are being addressed.
  - Consolidated and detailed fiscal data, including on non-oil revenues, have started to be published during the fiscal year.
  - Quarterly and annual budget execution reports were published up to 2020.
  - Measured by the Open Budget Survey (OBS), initial progress has stalled and even reversed (Figure 7).
  - Angola’s transparency score has deteriorated since 2019 and remains significantly lower than regional peers’.
  - Drop in rank mainly due to delays in publishing budget execution reports and fiscal revenues (Table 2).
- Needed transparency improvements:
  - Publication of fiscal strategy and medium-term fiscal framework in the 2025 budget will help improve future transparency scores.
  - Further improvements require:
    - Resuming timely publication of budget reports.
    - Improving the quality of fiscal data.
    - Extending comprehensiveness to include extra-budgetary funds, quasi-fiscal activities, contingent and future liabilities, and tax expenditures.
- Budget oversight and participation:
  - OBS shows no improvements on budget oversight in Angola’s scores since 2021.
  - National Assembly provides little oversight of planning and implementation stages.
  - Supreme Audit Court (Tribunal de Contas) issues ex-post audit reports on the yearly General State Accounts that do not cover all government entities; no follow-up on audit recommendations.
  - Public participation limited; budget process allows public participation solely during the approval phase through a public hearing related to the approval of the annual budget.
  - Progress would require, among other things:
    - (i) National Assembly debates budget policy before the budget proposal is tabled;
    - (ii) legislative committees examine in-year budget implementation;
    - (iii) National Assembly is consulted following budget revisions;
    - (iii) Tribunal de Contas has sufficient funds and autonomy.
  - Greater participation requires, among other things:
    - (i) Ministry of Finance develop mechanisms to enhance public consultation at the budget formulation stage;
    - (ii) National Assembly make budget public hearings more inclusive;
    - (iii) Tribunal de Contas contributes to audit investigations.
- Resource sector transparency (EITI):
  - Angola became an EITI implementing country in June 2022.
  - First EITI report (December 2023) unable to reconcile data and disclose contracts and beneficial ownership.
  - Second EITI report (October 2024) started a data reconciliation pilot but flagged continued lack of disclosure of contracts, licensing, allocation, beneficial ownership, and off-budget expenditures.
  - Ongoing validation process: decision expected to be announced by June 2025, accompanied by a time-bound action plan with corrective actions.
- Domestic arrears and cash management:
  - Domestic arrears remain a challenge.
  - IMF TA and Presidential Decree 235/21 (September 2021) regularized existing arrears and reduced large balances accumulated since 2014; stock of arrears has stabilized.
  - New arrears continue due to:
    - (i) weak budget commitment control procedures;
    - (ii) delays in recognizing and budgeting for arrears due to inadequate invoice recording;
    - (iii) weak cash flow forecasting.
  - Addressing challenges requires greater enforcement of budget execution rules, recording invoices at verification stage, and strengthening cash flow forecasting and management.
- Public investment management (PIM):
  - 2019 IMF-World Bank PIMA: institutional design comparable to many developing countries, but effectiveness very low.
  - Key weaknesses: (i) weak capacity to implement and enforce project appraisal/development/selection rules; (ii) absence of a budgeting function developed along a multiyear framework and aligned with the Fiscal Sustainability Law; (iii) weak controls during execution.
  - PIMA workshop in 2023 recommended reinforcing the action plan: (i) training at DNIP and other entities; (ii) strengthen enforcement; (iii) enhance Ministry of Finance/DNIP gatekeeping; (iv) implement digitalization and public dissemination of PIM processes; (v) accelerate preparation of MTEF.
  - Ministerial reform in 2024 moving DNIP from Ministry of Finance to newly created Ministry of Planning (Presidential Decrees 92 and 93 from April 2024) poses additional capacity and coordination challenges.
- Public procurement:
  - Improvements up to 2020: Public Contract Law 41/20; creation of SNCP; electronic platform (SNCPE); growing transparency; approval of 2024-28 Public Procurement Plan.
  - MAPS diagnostic (AfDB, 2024) reveals significant gaps in institutional framework, operations and market practices, and control and audit systems.
  - Contracts awarded through non-competitive bidding (Contratação Simplificada - CP) have accounted for over 80 percent of all contracts and remain dominant.
  - In 2023 and first half of 2024, open competitive bidding (Concurso Público) accounted for only 0.4 and 3.3 percent of contracts, respectively.
  - Procurement gaps include: absence of SOE participation limits; APPs published only 30 days after budget publication; SNCP lacks sufficient administrative independence and financial autonomy; limited reliance on SNCPE (less than 4 percent of contracts since 2018); SNCPE does not cover post-award phase; limited civil society participation; absence of data on Corruption Prevention Plans adoption; no beneficial ownership information provided by contractors.
  - Footnotes: procurement data includes goods and services and capital expenditures reported to SNCP; historical anomaly in 2020–2021 due to underreporting to SNCP during COVID-19.
- SOEs oversight and privatization:
  - Prior gaps: absence of robust legal, monitoring, supervision, and auditing instruments; exemptions from submitting investment plans to IGAPE; lack of regular external audits.
  - Since 2019, largest SOEs started publishing annual reports.
  - In 2023, about ¾ of SOEs (70 out of 94) provided annual reports to IGAPE; just under 90 percent (62 out of 70) have been independently audited.
  - Information on subsidies, capitalization, and dividends for each SOE has been regularly published by IGAPE.
  - New legislation approved in 2024 increased frequency of audits from annual to semiannual.
  - Remaining gaps: quantification and management of fiscal risks not yet enhanced.
  - Privatization program proceeded slowly and extended until 2026.
  - Roadmap for SOE reform approved in 2022 includes measures to limit state participation, improve control and fiscal risk mechanisms, increase transparency and quality of financial reports, and prioritize reforms in energy, transport, and telecommunication sectors.
- Tax administration integrity:
  - 2018 TADAT identified gaps in AGT core functions (taxpayer database integrity, risk management, tax dispute, accountability and transparency), making it vulnerable to corruption.
  - With IMF TA, AGT has set clear goals and started corrective measures: digitalization of tax services/procedures, adoption of risk management practices and a result-based framework, auditing, and organizational restructuring with clearer roles and responsibilities.

### AML/CFT
- Legal strengthening and supervision:
  - AML Law enacted in 2020 (with IMF TA) addressed previous FATF recommendations: improved criminalization of ML and TF offences; provided for identification and verification of beneficial ownership; widened scope of sanctions.
  - Efforts to enhance law enforcement capacity for AML/CFT investigations have been stepped up.
  - ESAAMLG mutual evaluation (2022) recognized improvements but identified weaknesses: risk-based supervision outside banking sector and DNFBP; access to beneficial ownership information; enforcement of the legal framework.
  - Based on these results, Angola entered a one-year observation period to address deficiencies.
- FATF grey listing and required actions:
  - Angola included in FATF’s grey list in 2024 due to lingering AML/CFT weaknesses.
  - FATF report after observation period acknowledged improvements: facilitated access to BO information, enhanced national cooperation and coordination, increased understanding of ML by law enforcement, enhanced use of financial intelligence.
  - Report concluded strategic weaknesses remained in: (i) risk-based supervision; (ii) enforcement of timely access to BO information; (iii) demonstrated increase in ML and TF investigations and prosecutions; (iv) effective process to implement targeted financial sanctions without delay.
  - Report formulated an action plan to be operationalized and implemented by January 2027.
  - Amendments approved by Parliament in May 2024 include: (i) obligation for legal entities to keep in-country register of members/shareholders/related persons; (ii) requirement for legal entities to ensure BO information availability to authorities upon request; (iii) obligation for financial institutions to verify customers’ BO information.
  - FATF Action Plan six strategic recommendations:
    1) enhancing understanding of ML/TF risks;
    2) improving risk-based supervision of non-banking financial entities and DNFBPs;
    3) ensuring competent authorities have adequate, accurate and timely access to beneficial ownership information and that breaches are adequately addressed;
    4) demonstrating an increase in ML investigations and prosecutions;
    5) demonstrating the ability to identify, investigate and prosecute TF;
    6) demonstrating an effective process to implement targeted financial sanctions without delay.

### Market Regulation
- Legal and institutional reforms:
  - Approval of Competition Law, Corporate Insolvency Law, and Privatization Law through 2022.
  - Competition Regulatory Authority (ARC) since 2018 has launched investigations into companies in the oil and food and beverage sectors.
  - To reduce discretionary price controls and promote more market-based frameworks, a new legal regime transferring price regulation mandate from the Ministry of Finance to sectoral regulators was submitted to Parliament in August 2024.

### Judiciary reform status and capacity building
- Independence, accessibility, agility, and capacity of judiciary critical to enforce contracts, secure property rights, and tackle corruption.
- Legal progress through 2022 by the Justice and Law Reform Commission (JLRC, set up 2020): approval of laws modernizing legal processes (new procedural penal code), strengthening Supreme Court independence, creating mid-level regional appeals, lower levels, and specialized courts.
- Some new courts have been created.
- Digitalization of records and court proceedings delayed by procurement processes.
- Progress stalled since 2022 after JLRC mandate expired; creation of a new JLRC in June 2024 expected to finalize unfinished legal instruments and reorganize the judiciary over the next 1 ½ year.
- Capacity-building training: with support from EU and UNODC, more than 1,000 law enforcement agents, judges, magistrates, and police officers trained on financial investigations, fiscal fraud, recovery of illicit assets, and money laundering.

### Voluntary recovery of illicit assets
- Law of Repatriation of Financial Resources (2018): allowed voluntary repatriation of Angolan assets held abroad in exchange for tax exemption and amnesty if returned within 180 days of promulgation; established National Asset Recovery Service (SRNA) under Attorney General’s Office.
- Reported recoveries:
  - SNRA published in 2023 a list of assets recovered since 2019 amounting to $19 billion, of which $7 billion were recovered domestically (shares in banks and companies, real estate, cash).
  - List updated in 2024 with an additional US$308 million seized, of which US$83 million in cash fully recovered and deposited at the BNA.
- Gaps: need clear rules and greater transparency on management, sale, and allocation of proceeds of recovered assets.
- Limitations: recourse to recovery based on conviction has been limited; restitution of assets seized in other jurisdictions limited.

### Law enforcement, prosecutions, and perceived backsliding
- Progress undermined by commutation of sentences and relative morosity in pursuing high-profile corruption cases.
- Specific cases:
  - Commutation by Supreme Court and early release of former Minister of Transport (Former Minister Augusto Tomás; initially sentenced in 2019 to 14 years).
  - General Kopelipa (high-ranking official under former President dos Santos) awaiting trial after more than five years.
- Recent surveys indicate corruption perceptions are rising after significant falls in 2022–23.

### National anti-corruption strategy (ENRP) and implementation gaps
- ENRP (2024–27) enacted July 2024 — first national strategy and priority under 2023–27 National Development Plan (NDP).
- ENRP objectives and actions across three areas:
  - (i) prevention: education, training, private sector involvement, reform of asset declaration legal framework, simplifying/digitizing government procedures and services;
  - (ii) detection: adoption of smarter systems to identify beneficiary owners and corruption acts and effective whistleblower protection;
  - (iii) repression: digitalization of judicial procedures, capacity building of law-enforcement agencies and magistrates, greater inter-agency coordination, collaboration with private sector and civil society, accelerated recovery and improved management of illicit assets.
- Governance: ENRP managed by a multisectoral commission appointed by the President, supported by two technical groups: prevention/detection led by General Inspectorate of the State (IGAE), and repression led by Attorney General Office (PGR).
- Shortcomings: ENRP thin on concrete actionable measures and on strengthening existing institutions. Key gaps:
  - prevention: reforms in asset declaration of high-ranking officials and politically exposed persons;
  - detection: implementation/enforcement of beneficial ownership registry and effective whistleblower protection;
  - repression: measures to strengthen financial and technical independence of the judiciary.
- Recommended operationalization steps:
  - (i) gap analysis of existing legislation and administrative procedures, capacity and autonomy of institutions;
  - (ii) prioritization and sequencing of actions within and across pillars;
  - (iii) development of measurable and monitorable indicators for each action;
  - (iv) costing of each action;
  - (v) elaboration of a coordination and governance mechanism, including selection of members and responsibilities for technical groups.
- Operationalization should consider ENRP’s interface with other NDP programs of state modernization and capacity.

### Conclusions and priority actions (selected)
- Overall assessment: Some progress achieved since last assessment, but strong momentum through 2022 has abated. Gaps relative to peers remain sizeable after initial reductions and have started to widen in some cases.
- Priorities related to rule of law and anti-corruption:
  - Judiciary Reform:
    - Finalize legal instruments to make the judicial system more expedient and independent.
    - Sustain capacity building efforts with support from development partners.
    - Create and operationalize lower-level and specialized courts.
    - Accelerate digitalization of records and court proceedings.
  - Recovery of Illicit Assets:
    - Foster transparency in management and sale of recovered assets and their proceeds.
    - Increase recourse to recovery of assets based on conviction.
    - Step up efforts to seek restitution of assets seized in other jurisdictions.
  - Anti-Corruption Strategy:
    - Conduct a gap analysis of legal framework and institutional capacities.
    - Specify actions, including adoption of measurable indicators.
    - Prioritize, sequence, and cost actions across the three pillars.
    - Set up governance structure of the Multi-Sectoral Committee.

*Source: IMF staff chapter “1.      Governance and anti-corruption reform efforts experienced a strong momentum” (sipea2025060).*

### 1.      Governance and anti-corruption reform efforts experienced a strong momentum

### 1.      Governance and anti-corruption reform efforts experienced a strong momentum

### Overview and recent trajectory
- President’s Lourenço’s first administration lasted from 2017–22 and achieved progress across multiple governance fronts: approval of new legislation; reforms to public financial and investment management (PFM and PIM) systems; increased oversight of state-owned-enterprises (SOEs) and financial institutions; improvements in fiscal and resource management transparency; and central bank governance improvements.
- The period featured an unprecedented fight against corruption, including imprisonment and prosecution of high-profile figures, creation of an anti-corruption unit, and movement of the legal framework towards best international practices.
- Despite earlier gains, reform momentum appears to have slowed:
  - Independent observers report slower-than-anticipated reform progress, stalled fiscal transparency, lingering high-profile investigations, and some surveys reporting growing corruption perceptions (Figure 1).
  - Angola was added to the Financial Action Task Force’s (FATF) grey list of countries with AML/CFT weaknesses (FATF, 2024).

### Framework for assessment
- Definitions used:
  - Governance: broadly the “framework for exercising authority”; Fund definition: the process of managing a country, including economic, legal, and policy aspects.
  - Corruption: “the abuse of public office for private gain.” Core corrupt acts involve criminality (bribery, embezzlement, money laundering, obstruction of justice).
  - “Systemic” corruption: pervasive, ingrained pattern of behavior that becomes the norm.
- IMF macro-critical state functions covered (per IMF policy): (i) fiscal governance; (ii) financial sector oversight; (iii) central bank governance and operations; (iv) market regulation; (v) rule of law; and (vi) AML/CFT. This paper excludes detailed discussion of financial sector oversight and central bank governance and operations (to be covered in the forthcoming 2025 Financial Sector Assessment Program).
- Channels through which weak governance and corruption affect macro outcomes:
  - Fiscal governance: reduces domestic revenue mobilization, increases tax evasion, distorts budgetary choices, causes waste and low-quality public investment, and fosters loss-making SOEs and public banks.
  - Market regulation: complex/opaque frameworks create discretionary opportunities for exploitation and discriminatory treatment.
  - Rule of law: weak enforcement erodes trust, undermines credit and investment.
  - AML/CFT: weak frameworks undermine financial system integrity, conceal proceeds of corruption, restrict cross-border transactions, reduce capital flows, and raise the cost and reduce the volume of external financing.

### Measurement approach and indicators
- The paper uses multiple third-party indicators (TPIs): Worldwide Governance Indicators (WGI, aggregated and subcomponents), International Country Risk Guide (ICRG) Political Risk Rating, WGI Control of Corruption Indicator (CCI), and Transparency International’s Corruption Perceptions Index (CPI).
- Indicators are normalized to 0-100 (0 weakest / highest corruption, 100 strongest / lowest corruption).
- Pairwise correlations across TPIs for SSA (2005–22) show high correlations among governance and corruption measures (WGI, ICRG, CCI, CPI).

### Measuring initial progress and recent patterns
- Most governance progress occurred in the first two years after 2017; since then advancements have been largely timid, with stagnation particularly in voice and accountability and regulatory quality.
- Political stability and rule of law:
  - Scores for political stability and absence of violence in 2022 were below those in 2017.
  - Bertelsmann Stiftung’s Transformation Index (BTI) 2024 indicates fundamental rights (freedom of expression, association, assembly) have significantly deteriorated in recent years.
  - WGI rule of law scores have declined since 2020, reflecting diminished confidence in the judicial system; World Justice Project Rule of Law index (WJP Index) 2023 also points to deterioration in fundamental rights, order and security, and civil justice indicators.
- Government effectiveness:
  - Identified as Angola’s Achilles’ heel. WGI government effectiveness score declined from 2017 to 2020 and only reversed in 2021; the latest score remains below the 2017 figure.
- Corruption Perceptions Index (Transparency International):
  - Angola’s CPI improved from 19 in 2017 to 33 in 2023.
  - Progress aligned Angola’s CPI score with the average for Sub-Saharan Africa (SSA) and low middle-income countries (LMIC).
  - Progress has leveled off after 2022.

### Macroeconomic impact: estimated gains from governance improvements
- Literature benchmarks:
  - Mills and others (2022): improving SSA governance to the global average could increase GDP per capita by 1 to 2 percentage points per year.
  - Baum and others (2017): corruption has a negative impact on aggregate revenue performance of about 0.6 percent of GDP annually (sample of 147 countries).
- Prior IMF estimate (IMF, 2018a): aligning Angola’s governance and corruption perceptions to the SSA average could increase annual real GDP per capita growth by between 0.75 – 1.25 percentage points.
- Updated findings in this paper:
  - Overall gains from improving governance and corruption perception to the SSA average are now significantly smaller, between 0.09–0.22 percentage points, because the gap between Angola’s scores and the regional average has notably reduced (Figure 5).
  - Only improvements in the aggregate WGI and the CCI would lead to a positive increase in GDP per capita growth (gap not entirely closed).
  - For the ICRG and CPI indicators, no gains are anticipated since Angola’s scores already exceed the regional averages.
  - Subcategory analysis of WGI shows larger opportunities: improving WGI subcategories to the SSA average could raise real GDP per capita growth by about 0.4 to 1.5 percentage points annually, with the largest impact from improving government effectiveness (Figure 6).
- Elasticities and baseline expressions used (as presented in the paper):
  - Governance (aggregated) — WGI:
    - g_i,t = 0.036 GOV_i,t + 0.087 GOV_i,t SSA
  - ICRG:
    - g_i,t = 0.107 GOV_i,t + 0.089 GOV_i,t SSA
  - Corruption (WGI CCI):
    - g_i,t = −0.02 GOV_i,t − 0.093 GOV_i,t SSA
  - Corruption (Transparency International CPI):
    - g_i,t = −0.012 GOV_i,t − 0.09 GOV_i,t SSA
  - WGI subcategory elasticities:
    - Voice and Accountability:
      - g_i,t = 0.004 GOV_i,t + 0.099 GOV_i,t SSA
    - Government Effectiveness:
      - g_i,t = 0.046 GOV_i,t + 0.074 GOV_i,t SSA
    - Regulatory Quality:
      - g_i,t = 0.036 GOV_i,t + 0.085 GOV_i,t SSA
    - Rule of Law:
      - g_i,t = 0.017 GOV_i,t + 0.072 GOV_i,t SSA

### Key quantitative takeaways
- CPI score: 19 in 2017 → 33 in 2023.
- Previous estimated annual gain from closing governance gap to SSA average: between 0.75 – 1.25 percentage points (IMF, 2018a).
- Updated estimated overall gains (closing to SSA average): between 0.09–0.22 percentage points (smaller than previous due to reduced gaps).
- Estimated gains from improving WGI subcategories to SSA average: about 0.4 to 1.5 percentage points annually (largest from government effectiveness).
- Corruption’s estimated negative impact on revenues: about 0.6 percent of GDP annually (Baum et al., 2017).

*Source: IMF staff chapter “1.      Governance and anti-corruption reform efforts experienced a strong momentum” (sipea2025060).*

### 14.      This section takes stock of the latest reform efforts with a view to identify gaps and

### 14.      This section takes stock of the latest reform efforts with a view to identify gaps and reinvigorate the reform momentum.

### Fiscal Governance
- Progress in fiscal transparency:
  - Several shortcomings in the quality and timeliness of government finance statistics and fiscal reporting have been addressed since 2017.
  - Inconsistencies between below and above the line reported fiscal data are being addressed.
  - Consolidated and detailed fiscal data, including on non-oil revenues, have started to be published during the fiscal year.
  - Quarterly and annual budget execution reports were published up to 2020.
  - Measured by the Open Budget Survey (OBS), this initial progress has stalled and even reversed (Figure 7).
  - Angola’s transparency score (still significantly lower than regional peers’) has deteriorated since 2019.
  - The drop in the country’s rank is mostly explained by delays in publishing budget execution reports as well as fiscal revenues (Table 2).

- Expected and needed transparency improvements:
  - Publication of the fiscal strategy and medium-term fiscal framework in the 2025 budget will help improve future transparency scores by increasing the comprehensiveness and medium-term orientation of the budget proposal.
  - Further improvements require:
    - Resuming the timely publication of budget reports.
    - Improving the quality of fiscal data.
    - Extending comprehensiveness to include extra-budgetary funds, quasi-fiscal activities, contingent and future liabilities, and tax expenditures.

- Budget oversight and participation:
  - OBS reports show no improvements on budget oversight in Angola’s scores since 2021.
  - The National Assembly provides little oversight of the planning and implementation stage of the budget cycle.
  - The Supreme Audit Court (Tribunal de Contas) issues ex-post audit reports on the yearly General State Accounts, which do not cover all government entities, and there is no follow-up on its audit recommendations.
  - Space for civil society and the public to contribute to budget formulation and monitor budget implementation remains constrained.
  - Progress in budget oversight would require, among other things, that:
    - (i) the National Assembly debates budget policy before the budget proposal is tabled,
    - (ii) legislative committees examine in-year budget implementation,
    - (iii) the National Assembly is consulted following budget revisions, and
    - (iii) the Tribunal de Contas has sufficient funds and autonomy to perform its obligations.
  - Greater participation in the budgetary process will require, among other things, that:
    - (i) the Ministry of Finance develop mechanisms to enhance public consultation at the budget formulation stage,
    - (ii) the National Assembly makes budget public hearings more inclusive, and
    - (iii) the Tribunal de Contas contributes to audit investigations.
  - Note: According to the OBS report, the budget process allows public participation solely during the approval phase through a public hearing related to the approval of the annual budget conducted by the National Assembly.

- Resource sector transparency (EITI):
  - Angola became an EITI implementing country in June 2022.
  - The first EITI report (December 2023) was unable to reconcile data from the authorities and extractive companies and to disclose contracts and beneficial ownership.
  - A second EITI report (October 2024) started a data reconciliation pilot for an oil and a diamond company, but flagged continued lack of disclosure of contracts, licensing, allocation, beneficial ownership, and off-budget expenditures.
  - An on-going validation process to determine Angola’s EITI membership is looking at disclosure and transparency, stakeholder engagement, and EITI’s expected impact. A decision is expected to be announced by June 2025, accompanied by a time-bound action plan with corrective actions.

- Domestic arrears and cash management:
  - Domestic arrears remain a challenge reflecting persistent weaknesses in expenditure controls and cash management.
  - IMF TA and Presidential Decree 235/21 from September 2021 regularized existing arrears and reduced large balances accumulated since 2014; the stock of arrears has stabilized.
  - New arrears have continued to emerge due to:
    - (i) weak budget commitment control procedures,
    - (ii) delays in recognizing and budgeting for arrears due to inadequate invoice recording, and
    - (iii) weak cash flow forecasting.
  - Addressing these challenges will require greater enforcement of budget execution rules, recording invoices at the verification stage, and strengthening cash flow forecasting and management practices.

- Public investment management (PIM):
  - A 2019 IMF-World Bank PIMA found Angola’s institutional design of PIM comparable to many developing countries, but effectiveness very low.
  - Key weaknesses included:
    - (i) weak capacity to implement and enforce project appraisal, development, and selection rules;
    - (ii) absence of a budgeting function developed along a multiyear framework and aligned with the Fiscal Sustainability Law;
    - (iii) weak controls during execution.
  - PIMA workshop in 2023 with IMF TA revealed limited progress and recommended reinforcing the action plan by:
    - (i) continuing training at the National Department of Public Investment (DNIP) at the Ministry of Finance, as well as in other line ministries and subnational government;
    - (ii) strengthening enforcement of existing rules through removal of regulatory inconsistencies across government;
    - (iii) enhancing the Ministry of Finance/DNIP gatekeeping role;
    - (iv) implementing digitalization and public dissemination of rules, selection criteria, costs, execution, and ex-post evaluation of public investment projects;
    - (v) accelerating the preparation of a medium-term expenditure framework (MTEF).
  - A Ministerial reform in 2024 moving DNIP from the Ministry of Finance to a newly created Ministry of Planning poses additional challenges for capacity building, gatekeeping, and coordination between the Ministry of Planning and Finance in PIM oversight (Presidential Decrees 92 and 93 from April 2024).

- Public procurement:
  - Improvements up to 2020: adoption of Public Contract Law 41/20, creation of National Public Procurement Services (SNCP), electronic platform (SNCPE), growing transparency in publication of bid winners, and approval of the 2024-28 Public Procurement Plan.
  - MAPS diagnostic by the African Development Bank (AfDB) published in 2024 reveals significant gaps in institutional framework, operations and market practices, and control and audit systems.
  - Contracts awarded through non-competitive bidding (Contratação Simplificada - CP) have accounted for over 80 percent of all contracts and remain dominant (Figure 9).
  - In 2023 and the first half of 2024, open competitive bidding (Concurso Público) accounted for only 0.4 and 3.3 percent of contracts, respectively.
  - Noted procurement gaps:
    - Legal and Institutional Framework:
      - Provisions that discipline or limit SOEs’ participation as bidders in public procurement processes are absent.
      - APPs are only required to be published 30 days after the publication of the budget and, as a result, do not inform the budget.
      - SNCP does not have sufficient administrative independence and financial autonomy to fulfill its regulatory authority.
    - E-Procurement:
      - Reliance on SNCPE has been very limited, with less than 4 percent of contracts awarded since its launch in 2018.
      - SNCPE does not administer CP contracts and does not cover the whole procurement cycle; it is limited to pre-award and award phases with the post-award phase missing.
    - Control of Corruption:
      - Civil society participation in improving the integrity of public procurement is limited, with no engagement in social audit and control of public procurement.
      - Notable absence of data regarding the adoption of Corruption Prevention Plans by public procuring entities.
      - Information on beneficial ownership is not provided by contractors.
  - Footnotes and data notes:
    - The procurement data only includes goods and services and capital expenditures reported to the SNCP. “Others” category explained in source footnote.
    - Historical anomaly: In 2020 and 2021, shares of competitive bidding appeared high due to underreporting to SNCP during COVID-19 when less than 4 percent of executed expenditures were reported despite execution rates of 98 and 147 percent.

- SOEs oversight and privatization:
  - Prior gaps: absence of robust legal, monitoring, supervision, and auditing instruments; exemptions from submitting investment plans to IGAPE; lack of regular external audits; several SOEs not providing annual reports to IGAPE.
  - Since 2019, largest SOEs started publishing annual reports.
  - In 2023, about ¾ of SOEs (70 out of 94) provided annual reports to IGAPE, of which just under 90 percent (62 out of 70) have been independently audited.
  - Information on subsidies, capitalization, and dividends for each SOE has been regularly published by IGAPE.
  - New legislation approved in 2024 increased the frequency of audits from annual to semiannual.
  - Remaining gaps: quantification and management of fiscal risks have not yet been enhanced.
  - Privatization program has proceeded slowly and has been extended until 2026.
  - A roadmap for SOE reform approved in 2022 includes measures to limit state participation, improve control and fiscal risks mechanisms, increase transparency and quality of financial reports, and prioritize reforms in energy, transport, and telecommunication sectors.

- Tax administration integrity:
  - 2018 TADAT identified gaps in AGT core tax functions regarding taxpayer database integrity, risk management, tax dispute, and accountability and transparency making it vulnerable to corruption.
  - With IMF TA, AGT has set clear goals and started corrective measures: digitalization of tax services and procedures, adoption of risk management practices and a result-based framework, auditing, and organizational restructuring with clearer roles and responsibilities.

### AML/CFT
- Legal strengthening and supervision:
  - AML Law enacted in 2020 prepared with IMF TA addressed previous FATF recommendations by:
    - Improving criminalization of money laundering (ML) and terrorism financing (TF) offences;
    - Providing for identification and verification of beneficial ownership;
    - Widening the scope of sanctions, among other requirements.
  - Efforts to enhance capacity of law enforcement in investigating AML/CFT cases have been stepped up.
  - A mutual evaluation by ESAAMLG in 2022 recognized improvements but identified weaknesses in:
    - risk-based supervision outside the banking sector and DNFBP,
    - access to beneficial ownership information,
    - enforcement of the legal framework.
  - Based on these results, Angola entered a one-year observation period to address deficiencies.

- FATF grey listing and required actions:
  - Angola was included in FATF’s grey list in 2024 due to unaddressed lingering AML/CFT weaknesses.
  - FATF report after the observation period acknowledged improvements: facilitated access to BO information, enhanced national cooperation and coordination, increased understanding of ML by law enforcement agencies, and enhanced use of financial intelligence.
  - The FATF report concluded that strategic weaknesses remained in:
    - (i) risk-based supervision,
    - (ii) enforcement of timely access to BO information,
    - (iii) demonstrated increase in ML and TF investigations and prosecutions,
    - (iv) effective process to implement targeted financial sanctions without delay.
  - The report formulated an action plan to be operationalized and implemented by January 2027.
  - Amendments to the law approved by Parliament in May 2024 include:
    - (i) obligation for legal entities to keep in-country register of its members, shareholders, and other related persons;
    - (ii) requirement for legal entities to ensure BO information availability to the authorities upon request;
    - (iii) obligation for financial institutions to verify their customers’ BO information.
  - FATF Action Plan has six strategic recommendations:
    1) enhancing its understanding of ML/TF risks;
    2) improving risk-based supervision of non-banking financial entities and DNFBPs;
    3) ensuring competent authorities have adequate, accurate and timely access to beneficial ownership information and that breaches to obligations are adequately addressed;
    4) demonstrating an increase in ML investigations and prosecutions;
    5) demonstrating the ability to identify, investigate and prosecute TF;
    6) demonstrating an effective process to implement targeted financial sanctions without delay.

### Market Regulation
- Legal and institutional reforms:
  - Significant revamping through approval of the Competition Law, the Corporate Insolvency Law, and the Privatization Law through 2022.
  - Efforts to strengthen capacity to enforce these laws have included actions by the Competition Regulatory Authority (ARC), which since initial setup in 2018 has launched investigations into companies in the oil and food and beverage sectors.
  - To reduce discretionary price controls and promote a more market-based framework for key sectors (e.g., utilities, health, education), a new legal regime transferring price regulation mandate from the Ministry of Finance to sectoral regulators was submitted to Parliament in August 2024.

### Rule of Law and Fight Against Corruption
- (Section heading appears in source; substantive details end at Market Regulation in provided excerpt.)

*Source: sipea2025060 (IMF staff content as provided in the supplied PDF excerpt).*

### 28.      Implementation of judiciary reforms have stalled since 2022 with some progress on

### 28.      Implementation of judiciary reforms have stalled since 2022 with some progress on

### Judiciary reform status and capacity building
- Increasing the independence, accessibility, agility, and capacity of the judiciary system is critical to strengthen Angola’s ability to enforce contracts, secure property rights, and tackle corruption.
- Legal progress through 2022 under the Justice and Law Reform Commission (JLRC) (set up in 2020) included:
  - approval of several laws aimed at modernizing legal processes such as a new procedural penal code;
  - strengthening the independence of the Supreme Court;
  - creating mid-level regional appeals, lower levels, and specialized courts to foster access and increase procedural speed.
- Some of these new courts have already been created.
- Digitalization of records and court proceedings has been held back by the procurement process to select service providers.
- Progress stalled since 2022 following the expiration of the 2020 JLRC mandate and delays in creating a new one.
- The creation of a new JLRC in June 2024 to finalize several unfinished legal instruments and the reorganization of the judiciary system over the next 1 ½ year is expected to reinvigorate the reform momentum.
- Capacity-building training: with support from the European Union and United Nation Drugs and Crime Office, more than 1,000 law enforcement agents, among judges, magistrates, and police officers, have benefited from training on critical areas such as financial investigations, fiscal fraud, recovery of illicit assets, and money laundering.

### Voluntary recovery of illicit assets
- Background: Law of Repatriation of Financial Resources (2018) allowed voluntary repatriation of Angolan assets held abroad in exchange for a tax exemption and amnesty from criminal charges related to assets not declared and outside Angola, so long as they were returned within 180 days of the promulgation of the law.
- The same law established the National Asset Recovery Service, (Serviço Nacional de Recuperação de Activos, SRNA) under the Attorney General’s Office with a mandate to identify, locate, as well as seize physical and financial assets, whether transferred abroad or within Angola.
- Reported recoveries:
  - SNRA published in 2023 a list of assets recovered since 2019, amounting to $19 billion, of which $7 billion were recovered domestically, including shares in banks and companies, real estate, and cash.
  - The list was updated in 2024 with an additional US$308 million of assets seized, of which US$83 million in cash fully recovered and deposited at the BNA.
- Gaps: clear rules and greater transparency are needed regarding the management, sale, and allocation of the proceeds of recovered assets.
- Limitations: recourse to recovery of assets based on conviction has been limited and restitution of assets seized in other jurisdictions has been limited as well.

### Law enforcement, prosecutions, and perceived backsliding
- Progress in law enforcement has been undermined by the commutation of sentences and a relative morosity in pursuing high-profile corruption cases.
- Specific cases cited:
  - Commutation of the sentence by the Supreme Court and early release of a former Minister of Transport charged with embezzlement, violation of budget execution norms, and abuse of power (Former Minister Augusto Tomás; initially sentenced in 2019 to 14 years).
  - Another high-ranking official under former President dos Santos accused of embezzlement, fraud, document forgery, influence peddling, criminal association, and abuse of power (General Kopelipa) is still awaiting trial after more than five years.
- Recent surveys indicate that corruption perceptions are rising after having significantly fallen in 2022–23.

### National anti-corruption strategy (ENRP) and implementation gaps
- A National Strategy for the Prevention and Repression of Corruption – ENRP – (2024–27) was enacted in July 2024. It was the first national strategy adopted in Angola and a priority action envisaged under the 2023–27 National Development Plan (NDP).
- ENRP establishes general objectives and actions in three areas:
  - (i) prevention: education, training, private sector involvement, reform of the asset declaration legal framework, and simplifying and digitizing government procedures and services;
  - (ii) detection: adoption of smarter systems to identify beneficiary owners and corruption acts and effective whistleblower protection;
  - (iii) repression: digitalization of judicial procedures, capacity building of law-enforcement agencies and magistrates, greater inter-agency coordination, collaboration with the private sector and civil society, and accelerated recovery and improvement in the management of illicit assets.
- Governance: the ENRP is managed by a multisectoral commission appointed by the President and supported by two technical groups: one for prevention and detection led by the General Inspectorate of the State (IGAE), and the other on repression led by the Attorney General Office (PGR).
- Shortcomings: the ENRP is particularly thin on concrete actionable measures, notably on how to strengthen existing institutions. Key gaps identified include:
  - prevention: reforms in the asset declaration of high-ranking officials and politically exposed persons;
  - detection: implementation and enforcement of a beneficial ownership registry and an effective whistleblower protection system;
  - repression: measures to strengthen the financial and technical independence of the judiciary.
- Recommended operationalization steps for the ENRP:
  - (i) a gap analysis of the existing legislation and administrative procedures, capacity and autonomy of institutions to better specify existent actions;
  - (ii) prioritization and sequencing of actions within and across different pillars;
  - (iii) the development of measurable and monitorable indicators for each of these actions;
  - (iv) the costing of each of the actions;
  - (v) the elaboration of a coordination and governance mechanism, notably on the selection of members and corresponding responsibilities for each of the technical groups.
- The operationalization should consider the ENRP’s interface with other NDP programs of state modernization and capacity.

### Conclusions and priority actions (selected, from broader list)
- Overall assessment: Angola has achieved some progress in governance and anti-corruption since the last assessment, but the strong momentum observed through 2022 has abated. Gaps in most governance indicators relative to peers remain sizeable after some initial reduction and have started to widen in some cases.
- Priorities related to rule of law and anti-corruption:
  - Judiciary Reform
    - Finalize legal instruments to make the judicial system more expedient and independent.
    - Sustain capacity building efforts with the support of development partners.
    - Create and operationalize lower-level and specialized courts.
    - Accelerate the digitalization of records and courts proceedings.
  - Recovery of Illicit Assets
    - Foster transparency in the management and sale of recovered assets and their proceeds.
    - Increase recourse to the recovery of assets based on conviction.
    - Step up efforts to seek restitution of assets seized in other jurisdictions.
  - Anti-Corruption Strategy
    - Conduct a gap analysis of the legal framework and institutional capacities.
    - Specify actions, including through the adoption of measurable indicators.
    - Prioritize, sequence, and cost actions across the three pillars.
    - Set up the governance structure of the Multi-Sectoral Committee.

*Source: sipea2025060 - 28.      Implementation of judiciary reforms have stalled since 2022 with some progress on*

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_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025060.pdf_