Abstract

Angola emerged from 40 years of conflict in 2002, one of the longest periods of civil strife in Africa. Since then, the country has become Africa's second largest oil producer and single largest supplier to China. This concentration of economic activity in the oil and diamond sectors benefits a small portion of the population while almost 70% live below the poverty line. In Angola, the informal economy constitutes what is probably the largest unregulated informal economy in the world, and provides a primary living for over 75% of the economically active population. While Development Workshop has provided some baseline data and in-depth knowledge on specific sectors, researchers have yet to capitalize on this unique opportunity to understand how the informal economy functions to support such a vast population. This grant will allow Development Workshop to undertake a comprehensive, cross-sector research project on the Angolan informal economy, and assess its potential to reconstitute social capital and revitalize shattered social institutions. The project will include the following: a cross-sector study on production and marketing by home-based enterprises, urban marketplaces and street vendors; a review of existing information on informal water systems and institutions; and an analysis of the informal rental housing market in Luanda. The idea is to encourage evidence-based policymaking, social advocacy and development activities to address the challenge of peacebuilding and reconstruction in Angola.

Post-Project Summary

Under the first component of the project, Development Workshop (DW) mapped the water system in Luanda, visiting key institutions and plotting changes since their last survey (1995-1998). They observed the operation of tanker trucks and the points where they fill up, and interviewed 1 300 consumers, 370 tank operators and 210 tanker operators. They also collected information on the average price of water in each barrio. The findings showed that informal water selling is one of the most important sectors of the informal economy. Many areas of the city rely on water trucks and are likely to continue doing so (piped distribution is expanding but so is the city). New areas have the poorest populations and the highest water prices (due to subsidization of piped water). Poor urban households are forced to limit their consumption to below that which is considered necessary to maintain a minimum standard of public health. DW is using the results of the study to advocate for investment in equitable water distribution through a fairer a cost-recovery policy for piped water, and support for small-scale informal sector water operators until such time as the public operator can provide piped water for all.

The second component, the housing survey, involved a review of key documents (government and media publications) and interviews with 122 landlords and 220 tenants in three periurban areas of different ages (more than 30 years, 5-30 years, less than 5 years). It was noted that some people have relocated in periurban areas in order to rent their inner-city formal sector housing. This component was completed in time to contribute to the government's plan to build one million houses by 2010, an initiative announced during the course of the project (October 2008).The findings were incorporated into a policy paper, Angolan Housing Finance, and presented at the national conference launching the Angolan economic review in June 2009.

The third component looked at three forms of informal sector entrepreneurship with a view to discovering the changes that have occurred in the sector since the peace accord was signed in 2002. The first focused on the influence of location and tenure on home-based enterprises, and the effect of home-based enterprises on the periurban informal property market. The second examined the strategies of marketplace vendors in response to government plans to relocate marketplaces. The third analyzed the value chains of four products sold by street vendors (hawkers): cassava, drinks, clothing and fish. The studies showed that while absolute employment in the informal market stayed about the same, the proportion of informal-to-formal employment has fallen slightly. The informal marketing sector continues to be significant provider of employment and income generation.

Dissemination of the project results was helped by the appointment of a person who has collaborated with DW in the past as Governor of Luanda. DW presented the results of the project to government entities and in various forums at the national and international level. According to the internal reviewer, "DW seized numerous opportunities to influence and indeed to graft its work into the policymaking process in the Angolan government. All the recommended procedures were followed: policymakers were integrated into the plan from the beginning, local people were fully consulted and engaged, capacity building included both formal and informal training, and DW utilized the IDRC project to further its own goals and commitments to Angola... Finally, dissemination of research findings was conducted throughout the project, it was wide ranging and we have every confidence that it is continuing long after the project has closed."

Recipient Institution(s)