P 141139Z NOV 08
FM AMEMBASSY LUANDA
TO SECSTATE WASHDC PRIORITY 5165
INFO SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
DEPT OF TREASURY WASHDC

UNCLAS LUANDA 000907 
 
 
E.O. 12958: N/A 
TAGS: EFIN EAID ECON AO
SUBJECT: FINANCE MINISTER REQUESTS U.S DEPARTMENT OF 
TREASURY ASSISTANCE IN THREE KEY AREAS 
 
REF: LUANDA 532 
 
¶1. Summary: Angola's new Finance Minister made a strong push 
for the placement of a U.S. Treasury Resident Advisor in 
Luanda.  The Minister told the Ambassador the GRA requires 
urgent technical assistance with tax reform, budgeting, and 
debt management.  End Summary. 
 
¶2. During a November 6 call by Ambassador Mozena, newly 
installed Finance Minister Eduardo Severim de Morias (no 
relation to his predecessor with the same surname) made a 
strong push for the placement of a U.S. Treasury Resident 
Advisor in Luanda.  De Morais said the GRA urgently needs 
assistance in three key areas: comprehensive tax reform, 
budgeting, and debt management.  The Minister told the 
Ambassador the GRA would welcome the visit of a U.S. Treasury 
team later this year or early next to evaluate the 
possibility of placing a Resident Advisor here.  A visit in 
January would enable the Treasury team to observe Angola's 
IMF Article IV review as well, he added. 
 
¶3. De Morais explained that Angola's tax code is based on a 
series of antiquated rules and regulations dating back to 
colonial times.  He said taxes are hard to calculate, 
collect, and pay.  In 2009, de Morais said a fiscal reform 
committee including representatives of the Ministry of 
Finance, the Central Bank, and civil society (representing 
taxpayers) will review the possibilities of a new revenue 
system to tax assets, income, and/or the value added on goods 
and services.  De Morais added that tax offices must be 
rebuilt and agents must be trained to enforce the new code. 
He said the GRA plans to introduce tax reform legislation by 
the end of 2009.  De Morais envisioned a Resident Advisor 
playing an important role in this tax reform effort. 
 
¶4. De Morais told the Ambassador that GRA officials lack 
adequate training in the preparation and execution of 
budgets.  He said the problem is pervasive across all levels 
of government, and it affects Angola's ability to efficiently 
spend public funds.  As the GRA expands its decentralization 
program through the allocation of USD 5 million to each of 
Angola's municipalities, de Morais said training of local 
officials on budget preparation, implementation, and 
monitoring is an urgent need. 
 
¶5. As Angola's economy rapidly expands, de Morais said, 
efficient, effective, and transparent debt management is a 
key firewall against inflation.  Expanding debt management 
expertise among Ministry officials is an urgent short term 
goal, according to the Minister.  De Morais expressed concern 
that regional training resources for mid-senior level 
officials are conducted in English.  The Minister said Angola 
is considering participation with Portugal and Brazil in the 
creation of a Portuguese language version of the 
Macroeconomic Financing Institute of Eastern and Southern 
Africa. 
 
¶6. De Morais raised the issue of expanding English training 
for GRA officials.  He said Angola needs more English 
speakers, and that the training should begin as early as 
possible.  He was very supportive of the Ambassador's 
suggestion that Peace Corps volunteers could be deployed to 
Angola to expand English language instruction to secondary 
schools, this helping to strengthen English at the foundation 
level. 
 
¶7. Comment: De Morais presented a strong case describing the 
needs of his ministry that could be addressed by a U.S. 
Department of Treasury Resident Advisor.  His special 
invitation for a USG team to observe the IMF consultations in 
January is a clear indication of the GRA's commitment to 
expanding our bilateral relationship in this key strategic 
area. 
 
 
MOZENA