Press Release No. 11/405

Press Release: IMF Executive Board Completes Fifth Review Under Stand-By Arrangement with Angola and Approves US$134.8 Million Disbursement

November 9, 2011

The Executive Board of the International Monetary Fund (IMF) today completed the fifth review of Angola’s economic performance under a program supported by the Stand-By Arrangement. The Board’s decision enables the immediate disbursement of an amount equal to SDR 85.9 million (about US$134.8 million), bringing total disbursements under the arrangement with Angola to an amount equal to SDR 773.01 million (about US$ 1.21 billion).

In completing the program review, the Executive Board approved a waiver of applicability for the end-September 2011 performance criteria. The Executive Board also approved the modification of the end-September 2011 quantitative performance criteria on reserve accumulation, BNA net domestic assets and net credit of the banking system to the government.

The 27-month Stand-by Arrangement for Angola in the amount of SDR 858.9 million (300 percent of quota) was originally approved by the IMF Executive Board on November 23, 2009 (see Press Release No. 09/425).

At the conclusion of the Executive Board's discussion on Angola, Mr. Naoyuki Shinohara, Deputy Managing Director and Acting Chair, stated:

“The Angolan authorities should be commended for strong performance under the Fund-supported stabilization and reform program. Spending has been contained, and budget execution enhanced. The sustained fiscal adjustment, helped by higher oil prices, has fostered reserve accumulation, a stable exchange rate, and declining inflation. The authorities have completed the settlement of the large 2008/09 stock of payment arrears, a major objective under the program.

“Public financial management and transparency continue to be key priorities going forward. The government has stepped up its monitoring of oil revenue transfers to the budget, and work is ongoing to reduce the large unexplained residual in the fiscal accounts and to reduce quasi-fiscal operations by the state oil company. The government is producing quarterly reports on budget execution, and the state-owned oil companies publishing audited financial statements. The central bank is stepping up its internal control system and has completed its 2010 audited financial statements. A medium-term fiscal framework will help shield priority spending from oil-price fluctuations.

“Substantial progress has been made on financial sector development. The success of the de-dollarization program will depend on the sustained implementation of sound macroeconomic policies, continued progress in reducing inflation, and efforts to develop capital markets and saving instruments.

“The Executive Board also reviewed a report from the Managing Director concerning an upward revision of end-2009 oil revenue data that had led to a noncomplying purchase in 2010 and a breach of obligations under Article VIII, Section 5, of the IMF’s Articles of Agreement. In light of the necessary corrective actions taken by the authorities, and strengthened efforts to ensure the timely transfer of oil revenue to the budget, the Executive Board agreed to grant a waiver for the nonobservance of the condition on the accuracy of the information reported by Angola, and that no further action is required,” Mr. Shinohara added.