IMF approves $487.5m payment for Angola

Angola's President Joao Lourenco

Angola's President Joao Lourenco (C) reviews the guard of honour as he arrives at the Angola Nation Assembly on October 16, 2017.

Photo credit: Ampe Rogerio | AFP

The International Monetary Fund (IMF) completed Monday the fourth review of Angola’s economic programme supported by an extended arrangement under the Extended Fund Facility (EFF).

IMF said the decision by its Executive Board allows the immediate disbursement of SDR 338.5 million - about $487.5 million, bringing total disbursements under the arrangement to SDR 2,143.2 m (about $3 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).

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 a request for access to SDR 540 million (about $765 million) to support the efforts against the Covid-19 pandemic and sustain structural reform implementation.

Angola recorded its first two cases of the coronavirus on March 21, 2020 - two people who had returned from Portugal.

As at January 11, the country had reported 18,254 cases with 3, 009 of them active, 420 deaths and 14,825 recoveries.

Sound policies

Despite challenges due to the pandemic, Angolan authorities have demonstrated a strong commitment to sound policies under the IMF-supported arrangement, according to a statement from the funder, which quoted Deputy Managing Director and Acting Chair Antoinette Sayeh.

The authorities’ robust policy response has enabled Angola to weather large external shocks, most notably lower oil revenues, and mitigate their macroeconomic impact while protecting the most vulnerable.

“The authorities also need to maintain momentum in other structural reforms that support stronger diversified growth, enhance governance and combat corruption”, Ms Sayeh said.

This is not the first time Angola is getting support to boost an economy hit by Covid-19.

Earlier in January, the country got a $61.3 million loan from the Europe Bank to fight the pandemic and a donation of $ 6.1 million for technical support. The institution had earlier donated biosecurity equipment and tests kits to the southern Africa country.

Previously, the  EU has also donated Angola $ 16, 37 m (€20 m)for supporting the response to the socio-economic crisis caused by the Covid-19 pandemic.

Diversification

In its bid to revive an oil-dependent economy battered by Covid-19, the Angolan government sees diversification as the way out.

Oil production continues to account for approximately 50 per cent of Angola’s Gross Domestic Product (GDP), 80 per cent of government revenue and 95 per cent of exports.

Agriculture’s contribution to the GDP – including forestry and fisheries – stands at about eight per cent.

The non-oil sector in Angola is mainly dominated by agriculture, banking, communications, fisheries, state-owned retail stores and diamond production.

In July, the African Development Bank (AfDB) set aside $1.04 million for two Covid-19 research projects in Angola, the institution confirmed Thursday.

“Funds from the AfDB’s ongoing Science and Technology Development Project have been committed towards the two research projects to mitigate the novel coronavirus in Angola”, it said in a statement in July.

“The project being executed by the Ministry of Higher Education, Science, Technology and Innovation aims to contribute to Angola’s economic diversification through scientific and technological research, and by promoting an innovative enabling environment”.

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