Washington, DC:
The Executive Board of the International Monetary Fund (IMF) today
completed the fifth review of Angola’s economic program supported by an
extended arrangement under the Extended Fund Facility (EFF). The Board’s
decision allows for an immediate disbursement of SDR 535.1 million - about
$772 million, bringing total disbursements under the arrangement to SDR
2,678.3 billion (about $3.9 billion).
Angola’s three-year extended arrangement was approved by the
Executive Board on December 7, 2018
, in the amount of SDR 2.673 billion (about $3.7 billion at the time of
approval). It aims to restore external and fiscal sustainability, improve
governance, and diversify the economy to promote sustainable, private
sector-led economic growth. At the time of the third review, the
Executive Board also approved the authorities’ request for an
augmentation of access
of SDR 540 million (about $765 million at the time of approval) to support
the authorities’ efforts to mitigate the impact of COVID-19 and sustain
structural reform implementation.
Angola is transitioning to a gradual recovery from the COVID-19 shock amid
higher global oil prices, low levels of reported COVID-19 infections and
the start of a vaccination campaign. The effects of the pandemic continue
to be felt across the economy and society, however. The authorities have
supported the recovery through sound policies that aim to further stabilize
the economy, create opportunities for inclusive growth and protect the most
vulnerable in Angolan society. The ongoing fiscal adjustment, in the face
of the pandemic’s impact, is reinforcing debt sustainability, while
allowing for increased health and social spending. The authorities have
also tilted their monetary policy stance towards tightening, considering
persistently high inflation.
In completing the review, the Executive Board also approved the
authorities’ request for a waiver for the nonobservance of the continuous
performance criterion on non-accumulation of external debt payment arrears
by the Central Government and the Banco Nacional de Angola.
The Executive Board also approved today the authorities’ request for
modification of some performance criteria, indicative targets, and
structural benchmarks.
Following the Executive Board’s discussion on Angola, Ms. Antoinette Sayeh,
Deputy Managing Director and Acting Chair, issued the following statement:
“The Angolan authorities’ strong commitment to sound policies under the
IMF-supported arrangement has enabled Angola to mitigate the worst effects
of the pandemic. Aided by higher oil prices, the authorities are supporting
Angola’s recovery by consolidating macroeconomic stability while protecting
the most vulnerable.
“The authorities are continuing to strengthen public finances and debt
dynamics. They achieved a strong fiscal adjustment in 2020 and are on track
to do the same in 2021, while increasing health and social spending. By
saving the bulk of oil revenue windfall this year, they are helping to
sustain the planned rapid reduction in public debt vulnerabilities. Their
decision to request an extension of debt service relief under the Debt
Service Suspension Initiative (DSSI) through end-December 2021 is welcome.
“The National Bank of Angola (BNA) has appropriately shifted its policy
stance toward tightening given continued inflationary pressures. The recent
policy adjustments to contain money supply are welcome, and the BNA should
move quickly to tighten further if inflation does not begin to decelerate
significantly. The authorities have appropriately relied on exchange rate
flexibility as a shock absorber.
“The enactment of the Financial Institutions Law (FIL) will empower the
authorities to safeguard financial stability and proceed swiftly with the
pending restructuring of a troubled public bank. Expeditious implementation
of the FIL’s secondary legislation is crucial. It is also vital to
strengthen BNA independence and governance via the proposed central bank
law, including the consideration of constitutional amendments.
“Strong non-oil growth recovery is critical for sustainability. The
authorities need to maintain momentum on structural reforms that support
stronger diversified growth, enhance governance, and combat corruption.”
IMF COVID-19 Hub
Policy Tracker
Financial Assistance
Questions & Answers
