The construction and opening of the Academy of Fishery and Marine Sciences in Angola is the biggest Polish investment in Africa and, at the same time, the biggest educational project of the European Union on that continent. Poland granted loans to support the Academy construction: USD 14 million in the 1st stage and EUR 60 million in the 2nd stage. Navimor was directly responsible for the investment, whereas the organisational and educational concept was made by the Maritime Academy in Gdynia. The Ministry of Finance and Bank Gospodarstwa Krajowego properly discharged their obligations under loan agreements signed with the Government of Angola. However, NIK pointed out that Polish entrepreneurs failed to actively promote the possibility of applying for contracts as part of this project.
The idea to establish the Academy of Fishery and Marine Sciences in Namibe in Angola originated in 2006. The Polish company Navimor and the Maritime Academy in Gdynia (now Gdynia Maritime University) started to implement the project. As part of tied aid for the Republic of Angola, Poland fostered the Academy construction project the with loan agreements for USD 14 million in 2006 (1st stage) and EUR 60 million in 2010 (2nd stage). The 3rd stage of the project for USD 60 million was not accepted by the Polish side as opinions on the scope of this project stage varied.
The Academy of Fishery and Marine Sciences in Moçâmedes in Namibe Province in Angola started its activity in July 2017. It was the biggest educational project conducted in Africa by an EU country, and at the same time a model example of cooperation between the business and educational sector in implementing such a complex initiative outside Poland. As part of this project, on an area of about 70 ha modern university facilities were erected, covering an area of about 32 thousand m2 in total.The Academy can hold about 1500 students in 14 specialties within three faculties: fishery, fish processing and use of water resources.
The key audit assumption was to evaluate activities of the minister responsible for public finance, as a representative of the Polish Government, within the scope of their rights and obligations under loan agreements signed with the Government of the Republic of Angola as part of the tied aid. The audit covered the period 2010-2020.
Key audit findings
According to NIK, the Ministry of Finance and Bank Gospodarstwa Krajowego (BGK) properly discharged their obligations under loan agreements signed with the Government of Angola. The loans were extended as part of tied aid for the development and construction of the Academy of Fishery and Marine Sciences in Namibe in Angola. In accordance with both loan agreements, the Ministry of Finance notified the contract projects in OECD on deadlines set out in those agreements. As part of the loan agreement of 2010, the Ministry of Finance accepted one contract worth over EUR 70.5 million signed by Navimor. As for the loan agreement of 2017 (for USD 60 million) one contract was signed which was not accepted by the Polish side. The main reason included opinions of the minister responsible for economy, the Minister of Foreign Affairs and the General Counsel to the Republic of Poland. In line with those opinions the Academy needs to be made fully functional at the educational level, not only at the technical one as was the wish of the Angolan side. Due to the SARS-COV-2 pandemic which prevented representatives of Poland and Angola from meeting in person, talks to agree on the material scope of the 3rd stage of the project were suspended.
The Ministry of Finance entrusted BGK with banking service and keeping the register of both loan agreements which was done as part of agency agreements. The Memorandum of Understanding between BGK and Banco de Poupanca e Credito (the government bank in Angola that was to service the agreement) was signed with a nearly two-year delay against the deadline set out in the loan agreement of 2010 (reasons were independent of BGK). As part of the loan agreement of 2010, nearly 100% of the EUR 60 million loan was paid to Navimor in 22 tranches. Under the same agreement, the Government of the Republic of Angola, repaid principal instalments of EUR 8.5 million and interest instalments of EUR 734.6 thousand. As of the end of 2020, the principal of EUR 51.5 was yet to be repaid.
Bank Gospodarstwa Krajowego transferred all amounts of repaid principal and interest instalments to relevant state budget accounts. Since 13 of 17 principal and interest instalments were repaid with delay of 1 to 140 days, BGK accrued – pursuant to the loan agreement - default interest totalling EUR 5.8 thousand, which was repaid. Besides, the loan was not charged with any costs because under the agency agreements signed with the Ministry of Finance, BGK received lump-sum compensation for servicing all liabilities and receivables of the State Treasury under the government agreements.
The NIK audit findings show that under the loan agreements signed in 2010 and 2017, the Polish Minister of Finance could not participate in the process of selecting contracting parties to execute specific contracts. Therefore, competitive selection of contracting parties, and thus the most economical way of spending funds granted as part of the contracts, was ensured only by the Angolan side, in line with the regulations applicable in Angola. Moreover, the Ministry of Finance was not even informed what procedures or principles of selecting contracting parties were applied by the Angolan side.
The Ministry of Finance monitored the percentage of the value of goods and services of the Polish origin in the contract executed under the loan agreement of 2010, by accepting the exporter’s declaration and conducting tax control in that area after the relevant contracts were completed. The minimum percentage of value of goods and services of the Polish origin (60%) was achieved – at the end of July 2016 it was 95%. NIK stressed, though, that the manner of verifying the said percentage of the Ministry of Finance only after the end of the contract poses a risk that - if the situation requires that – remedy actions in the course of a contract execution may be ineffective.
The Supreme Audit Office also pointed to the lack of proper collaboration between the minister responsible for public finance, the minister responsible for economy and the minister dealing with foreign affairs to promote the Academy construction project in Namibe, Angola. NIK stands in a position that active promotion measures jointly taken by the ministers could not only boost interest of Polish entrepreneurs but also help them enter the new market in Angola. NIK positively evaluated the fact that in September 2019 the Minister of Finance appointed the Intergovernmental Loan Cooperation Team. This is a support body, mainly providing opinions on intergovernmental loan cooperation and performance of international loan agreements.
The audit findings indicate that all the key assumptions of the Academy construction project were met. The educational assumptions were met in line with the Ministry of Fishery and Sea in Angola. The Maritime University in Gdynia, as the main educational partner in this project, discharged its tasks set out in the contract. For three planned faculties of the Academy, teaching programmes and laboratory instructions were developed as well as the lists of laboratories and their equipment. Also, 28 titles of university textbooks in Portuguese were published. Besides, MSc and PhD studies for Angolan students were organised in Poland.
Some irregularities were identified, though. E.g. some tasks were performed with delay, which was mainly caused by the project complexity and innovativeness. The biggest delays (10 and 18 months) were found in developing the concept of operation of the Training Centre of Maritime Rescue and Firefighting, proposals of equipment and machines, operational procedures of the Vocational Training Centre. Also textbooks and activity schedules were created with delays because they required many academics to cooperate. Besides, it was established during the audit that the Maritime Academy in Gdynia paid excess scholarships to Angolan students (it was about PLN 93.6 thousand). The reason was the doubt which occurred at the agreement signing stage if scholarships paid to Angolan students are subject to personal income tax.
Recommendations
The Supreme Audit Office recommended that the Minister of Finance, Funds and Regional Policy implement a mechanism of on-going monitoring concerning the percentage of value of deliveries of the Polish- and foreign origin in the course of executing contracts related to the performance of intergovernmental loan agreements.
Besides, NIK stands in a position that the government administration and subordinate organisational units should cooperate to actively promote loan agreements so that information about signed loan agreements is open to the public. According to NIK that would enable a bigger number of Polish entrepreneurs to apply for the contract execution. That task could be coordinated e.g. by the Intergovernmental Loan Cooperation Team appointed in 2019 which is tasked with coordinating the process of granting loans of this type, also by providing opinions on export contracts.
In response to the post-audit statement, the Minister of Finance informed that he would consider adding information on the percentage of value of the Polish origin deliveries to the on-going monitoring of the contract execution as part of intergovernmental loan agreements.
