## IMF Executive Board Completes Sixth Review of the Extended Fund Facility Arrangement for Angola and Concludes 2021 Article IV Consultation _IMF News, December 22, 2021_ ## Source details **Canonical URL:** [IMF Executive Board Completes Sixth Review of the Extended Fund Facility Arrangement for Angola and Concludes 2021 Article IV Consultation](https://www.imf.org/en/news/articles/2021/12/22/pr299-angola) ## Other formats - [Markdown version](/en/news/articles/2021/12/22/pr299-angola/index.md) - [Structured JSON version](/en/news/articles/2021/12/22/pr299-angola/index.json) - [Bundle manifest](/en/news/articles/2021/12/22/pr299-angola/bundle-manifest.json) ## Bibliographic details - Published: December 22, 2021 --- ### Overview - The Executive Board completed the sixth review of Angola’s program under an extended arrangement under the Extended Fund Facility (EFF) and concluded the 2021 Article IV consultation. - The Board’s decision allows for an immediate disbursement of SDR 535.1 million (about $748 million). - Total disbursements under the arrangement are SDR 3.2134 billion (about $4.5 billion). - Waivers of nonobservance were approved for the performance criterion on net international reserves of the Banco Nacional de Angola. ### Program background and objectives - Angola’s three-year extended arrangement was approved on December 7, 2018, in the amount of SDR 2.673 billion (about $3.7 billion at the time of approval). - The arrangement aims to: - restore external and fiscal sustainability, - improve governance, - diversify the economy to promote sustainable, private sector-led economic growth. - At the time of the third review, access was augmented by SDR 540 million (about $765 million at the time of approval) to support mitigation of COVID-19 impacts and sustain structural reforms. ### Economic outlook and recent developments - The impact of the COVID-19 pandemic on the Angolan economy has begun to abate amid higher oil prices and less disruptive containment measures. - Non-oil growth has started to recover and is expected to contribute to a broad stabilization of overall output in 2021. - Inflation has reached over 25 percent, driven by supply-side factors. - Continued fiscal restraint should deliver a substantial overall surplus in 2021, while higher oil prices are supporting a high current account surplus. - Angola’s overall growth is projected to turn positive in 2022 and reach around 4 percent in the medium term, bolstered by planned growth-enhancing structural reforms. - Inflation is expected to gradually ease starting in 2022 as global food inflation moderates and the central bank maintains a tight policy stance. - A continued prudent fiscal stance, embedded in the 2022 budget plans, will support a rapid decline in the public debt-to-GDP ratio while protecting key health and social spending. ### Policy assessment and recommendations (from Ms. Antoinette Sayeh) - Fiscal policy - The authorities’ disciplined fiscal policy is helping deliver a sharp drop in the public debt-to-GDP ratio in 2021, strengthening debt sustainability while protecting social spending amid the pandemic. - The 2022 budget aims to consolidate the fiscal retrenchment. - Sustaining the reduction in public debt towards the authorities’ medium-term target will require continued fiscal discipline supported by structural fiscal reforms. - Fiscal policy should mitigate the impact of oil-price shocks by saving future windfalls from high oil prices and protecting priority spending in downturns. - Monetary policy and exchange rate - The National Bank of Angola (BNA) has appropriately tightened the monetary policy stance to address persistently high inflation, which stems mostly from supply-side factors. - With an increase in the policy rate and restrained money growth, this stance is expected to begin bringing down inflation next year. - The central bank needs to stand ready to further tighten monetary policy should inflation accelerate again, or expectations of high inflation become entrenched. - The BNA’s plans to transition toward an inflation-targeting monetary policy framework and commitment to a flexible exchange rate regime are welcome. - Financial sector - Authorities need to continue efforts to ensure the health of the sector, building on substantial progress in financial sector reforms. - Since the start of the program, the sector’s capitalization and the legal framework for regulation and supervision have been reinforced. - Priorities include completing modernization of the regulatory framework and the restructuring and recapitalization of the two largest troubled public banks. - Implementation of plans to address the still high level of non-performing loans is important. - Structural reforms and diversification - Diversifying the economy through continued deep structural reforms is essential for achieving inclusive growth and consolidating economic sustainability. - Rapid expansion of non-oil output requires implementation of ongoing reforms to strengthen governance, improve the business environment, promote private investment and trade openness, and develop human capital and infrastructure. - Authorities should promote conditions for faster development of key sectors such as agriculture, telecommunications, and finance. ### Key economic indicators (Selected Economic Indicators, 2020-22) - Real gross domestic product (percent change) - 2020 Actual: -5.2 - 2021 Proj: 0.1 - 2022 Proj.: 2.9 - Oil sector (percent change) - 2020 Actual: -8.0 - 2021 Proj: -10.6 - 2022 Proj.: 1.6 - Non-oil sector (percent change) - 2020 Actual: -4.0 - 2021 Proj: 3.9 - 2022 Proj.: 3.4 - Nominal gross domestic product (GDP) - 2020 Actual: 9.7 - 2021 Proj: 39.1 - 2022 Proj.: 23.0 - GDP deflator - 2020 Actual: 15.8 - 2021 Proj: 39.0 - 2022 Proj.: 19.5 - Non-oil GDP deflator - 2020 Actual: 22.3 - 2021 Proj: 25.7 - 2022 Proj.: 22.2 - Consumer prices (annual average) - 2020 Actual: 25.1 - 2021 Proj: 26.8 - 2022 Proj.: 18.0 - Gross domestic product (billions of kwanzas) - 2020 Actual: 33,832 - 2021 Proj: 47,071 - 2022 Proj.: 57,892 - Oil gross domestic product (billions of kwanzas) - 2020 Actual: 8,815 - 2021 Proj: 14,391 - 2022 Proj.: 16,592 - Non-oil gross domestic product (billions of kwanzas) - 2020 Actual: 25,017 - 2021 Proj: 32,680 - 2022 Proj.: 41,299 - Gross domestic product (billions of U.S. dollars) - 2020 Actual: 58.5 - 2021 Proj: 73.7 - 2022 Proj.: 89.0 - Gross domestic product per capita (U.S. dollars) - 2020 Actual: 1,885 - 2021 Proj: 2,307 - 2022 Proj.: 2,704 - Central government (percent of GDP) - Total revenue - 2020 Actual: 20.8 - 2021 Proj: 22.1 - 2022 Proj.: 21.6 - Of which: Oil-related - 2020 Actual: 10.7 - 2021 Proj: 12.8 - 2022 Proj.: 12.7 - Of which: Non-oil tax - 2020 Actual: 8.8 - 2021 Proj: 8.2 - 2022 Proj.: 7.8 - Total expenditure - 2020 Actual: 22.7 - 2021 Proj: 19.3 - 2022 Proj.: 19.1 - Current expenditure - 2020 Actual: 17.5 - 2021 Proj: 15.6 - 2022 Proj.: — - Capital spending - 2020 Actual: 5.2 - 2021 Proj: 3.7 - 2022 Proj.: 3.3 - Overall fiscal balance - 2020 Actual: -1.9 - 2021 Proj: 2.8 - 2022 Proj.: 2.4 - Non-oil primary fiscal balance - 2020 Actual: -5.5 - 2021 Proj: -4.4 - 2022 Proj.: -? - Non-oil primary fiscal balance (percent of non-oil GDP) - 2020 Actual: -7.5 - 2021 Proj: -6.3 - 2022 Proj.: -7.3 - Money and credit (end of period, percent change) - Broad money (M2) - 2020 Actual: 24.3 - 2021 Proj: 3.0 - 2022 Proj.: 12.0 - Percent of GDP (M2) - 2020 Actual: 37.5 - 2021 Proj: 27.8 - 2022 Proj.: 25.3 - Velocity (GDP/M2) - 2020 Actual: 2.7 - 2021 Proj: 3.6 - 2022 Proj.: 4.0 - Velocity (non-oil GDP/M2) - 2020 Actual: 2.0 - 2021 Proj: 2.5 - Credit to the private sector (annual percent change) - 2020 Actual: -7.7 - 2021 Proj: 13.0 - 2022 Proj.: 12.5 - Balance of payments - Trade balance (percent of GDP) - 2020 Actual: 27.5 - 2021 Proj: 25.0 - 2022 Proj.: — - Exports of goods, f.o.b. (percent of GDP) - 2020 Actual: 35.8 - 2021 Proj: 43.5 - 2022 Proj.: 40.8 - Of which: Oil and gas exports (percent of GDP) - 2020 Actual: 33.5 - 2021 Proj: 40.9 - 2022 Proj.: 38.3 - Imports of goods, f.o.b. (percent of GDP) - 2020 Actual: 16.3 - 2021 Proj: 15.9 - 2022 Proj.: — - Terms of trade (percent change) - 2020 Actual: -36.6 - 2021 Proj: 51.2 - 2022 Proj.: 5.4 - Current account balance (percent of GDP) - 2020 Actual: 1.5 - 2021 Proj: 10.8 - 2022 Proj.: 9.5 - Gross international reserves (end of period, millions of U.S. dollars) - 2020 Actual: 10,978 - 2021 Proj: 14,056 - 2022 Proj.: 14,756 - Gross international reserves (months of next year's imports) - 2020 Actual: 7.4 - 2021 Proj: 8.1 - 2022 Proj.: — - Net international reserves (end of period, millions of U.S. dollars) - 2020 Actual: 8,379 - 2021 Proj: 9,440 - 2022 Proj.: 10,140 - Exchange rate - Official exchange rate (average, kwanzas per U.S. dollar) - 2020 Actual: 578 - 2021 Proj: .. - Official exchange rate (end of period, kwanzas per U.S. dollar) - 2020 Actual: 656 - Public debt (percent of GDP) - Public sector debt (gross)1 - 2020 Actual: 135.1 - 2021 Proj: 95.9 - 2022 Proj.: 78.9 - Of which: Central Government debt - 2020 Actual: 125.3 - 2021 Proj: 89.5 - 2022 Proj.: 72.9 - Oil - Oil and gas production (millions of barrels per day) - 2020 Actual: 1.388 - 2021 Proj: 1.258 - 2022 Proj.: 1.282 - Oil and gas exports (billions of U.S. dollars) - 2020 Actual: 19.6 - 2021 Proj: 30.1 - 2022 Proj.: 34.1 - Angola oil price (average, U.S. dollars per barrel) - 2020 Actual: 41.3 - 2021 Proj: 68.3 - 2022 Proj.: 76.0 - Brent oil price (average, U.S. dollars per barrel) - 2020 Actual: 42.3 - 2021 Proj: 70.2 - 2022 Proj.: 77.8 *Sources: Angolan authorities; and IMF staff estimates and projections.* --- ## References - [Angola and the IMF](http://www.imf.org/external/country/AGO/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [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/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2021/12/22/pr299-angola_