Building a Public Infrastructure Investment Projects’ Optimal Portfolio : The Case of the Angolan State Budget

The Angolan economy is highly vulnerable as most state budget incomes originate from oil and gas exporting. On the edge of celebrating fifty years of independence, economic diversification and prosperity still need to be accomplished. The current methodology for prioritizing and selecting public investments (MPSP) and the state budget structure are at the root of this enormous public problem (among others), as it favors the public expenditure unsustainability. Given this, Ricardo et al. (2023), adopting the Barbati et al. (2018a)’s methodology, built a large-scale public infrastructure (LSPI) investment classification/prioritizing model. However, it fails to consider the budgetary constraints to select the most public project’s adequate portfolio. Thus, the main objective of this research is to contribute to developing an LSPI portfolio selection optimization model, improving available public financial resources’ value best use. To this end, this study continues the earlier procedure, where the Electre Tri-nC classification assessment model was applied to prioritize public investments. Currently, given the budget ceiling constraint, the optimization model is used to find the most adequate portfolio. A portfolio of the LSPI investments classified to the most important priority levels or with the most significant possible number of alternatives is finally selected. The results suggest that the available resources’ best value allocation should be preceded by classifying the public initiatives into priority levels and an optimal portfolio selection. It is believed that the model may have the potential to be applied in overarching public prioritizing processes. Lastly, the research contributions, limitations, policy implications, and future model improvements are given