To finance the Informal Economy Conversion Program in Angola, the European Union has granted EUR 20 million. The agreement signed this Monday is part of a package to respond to the impact on the country’s economy of the Covid-19 pandemic.
According to Sérgio Santos, the Angolan Minister of Economy and Planning, this funding will be extended to projects already included in the State Budget, which is scheduled to begin in January 2021.
“These are two measures, on the one hand to reduce the bureaucratic burden in the recognition, registration and licensing of economic activities, but on the other hand we have to act in order to get these informal operators to recognize that their self-employment or their entrepreneurial initiative can be better carried out within a framework of stability and formality,” Sérgio Santos – Angolan Minister of Economy and Planning said.
The ambassador and head of the European Union delegation in Angola said that this funding represents “above all an act of solidarity and trust. And the fact that it is a budget support is very special.
“The way budget support is done is that instead of giving that budget support to a development partner, you give the money, I say in a very simple way, directly to the state budget. And then it’s years, and it’s part of our partnership, so it’s going to be an ongoing dialogue. Very technical aspects of the indicator and all that we’re going to check how the fund is used,” Jannette Seppen – Ambassador and Head of the European Union Delegation in Angola said.
Bringing economic agents into the formal sector informally has been one of the greatest challenges for Angola and most African countries. The informal sector represents an average of 60% of the Gross Domestic Product in Africa and appears as a way to solve problems such as unemployment and hunger. Informal activities are mostly carried out by women and fill the need for an extra income, which serves as a livelihood for the whole family.
In Angola, the informal sector accounts for about EUR 43 billion to EUR 64 billion annually, representing 72.6% of operators outside the legal circuit.