## IMF Executive Board Completes the Second Review Under Angola’s Extended Arrangement and Approves US$247 Million Disbursement

_IMF News, December 5, 2019_

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## Bibliographic details
- Published: December 5, 2019

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### Review outcome and disbursement
- On December 5, 2019, the Executive Board completed the Second Review of Angola’s economic program under an extended arrangement under the Extended Fund Facility (EFF).
- Completion of the review unlocks access to SDR 179 million (about US$247 million).
- Total disbursements under the extended arrangement are SDR 1.073 billion (about US$1.48 billion).

### Program adjustments, waivers, and targets
- The Executive Board approved:
  - waivers of nonobservance and modification of the performance criteria (PC) on net international reserves and non-accumulation of external debt arrears;
  - introduction of a new PC on reserve money (ceiling);
  - modifications to three indicative targets: increasing the ceilings on the accumulation of payments arrears and on public debt; and a new indicative ceiling on the issuance of debt guarantees by the Central Government;
  - changes in the timetable of six structural benchmarks (SBs);
  - five new SBs to underpin fiscal consolidation and transparency, and support financial sector restructuring.

### Program background and objectives
- Angola’s three-year extended arrangement was approved by the IMF Executive Board on December 7, 2018, in the amount of SDR 2.673 billion (about US$3.7 billion at the time of approval), the equivalent of 361 percent of Angola’s quota.
- Program aims:
  - restore external and fiscal sustainability;
  - improve governance;
  - diversify the economy to promote sustainable, private sector-led economic growth.

### Key findings and assessments (Statement by Mr. Tao Zhang, Deputy Managing Director and Acting Chair)
- The Angolan authorities have maintained their commitment to the Fund-supported program despite a challenging external and domestic environment.
- The authorities’ commitment to fiscal consolidation was illustrated by the outperformance of the end-June 2019 non-oil primary fiscal deficit target by a wide margin.
- Angola continues to face a deteriorated external environment, which is weighing on the economic outlook.

### Policy recommendations and required actions (from Mr. Tao Zhang)
- Fiscal policy and debt:
  - Sustain fiscal discipline to address debt vulnerabilities.
  - Continue the conservative fiscal stance expected to continue in 2020.
  - Persevere with measures to mobilize non-oil revenue, strengthen public financial management, improve debt management, and bolster transparency and accountability of state-owned enterprises to preserve medium-term gains and mitigate elevated risks to debt sustainability.
- Monetary and exchange rate policy:
  - The National Bank of Angola (BNA) took steps to eliminate remaining imbalances in the foreign exchange market and reduced constraints to market-price formation in foreign exchange auctions.
  - The monetary stance has been recalibrated to address excessive depreciation pressures on the kwanza.
  - The BNA should maintain its tight monetary policy stance, and stand ready to tighten further if warranted, in order to support the disinflation process.
- Financial sector:
  - Full and timely implementation of banking sector recapitalization and restructuring is essential to address financial sector risks.
  - Asset quality reviews of 13 banks will inform possible recapitalization needs of private banks and of public banks, consistent with available fiscal space.
  - Further amendments are warranted to the BNA and Financial Institutions Laws to enable the authorities to strengthen bank supervision and resolution.
- Structural reforms:
  - Continued implementation of structural reforms is critical to diversifying the economy and laying the foundations for sustainable, private sector-led economic growth.
  - The Government remains committed to improving the investment environment, strengthening governance, and fighting corruption, including by enhancing AML/CFT legislation.

*Source: IMF Press Release No. 19/443 — “IMF Executive Board Completes the Second Review Under Angola’s Extended Arrangement and Approves US$247 Million Disbursement”, December 5, 2019.*

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## References

- [Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)
- [Angola and the IMF](http://www.imf.org/external/country/AGO/index.htm)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [No. 18/463](https://www.imf.org/en/News/Articles/2018/12/07/pr18463imf-executive-board-approves-extended-arrangement-under-the-extended-fund-facility-for-angola)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2019/12/05/pr19443-angola-imf-completes-the-second-review-under-angola-extended-arrangement_