0919 GMT January 25, 2020
The multi-lateral lender announced the move late on Thursday. The International Monetary Fund originally approved the facility totaling $3.7 billion in December 2018 to help Angola manage twin budget and balance of payments crises after tanking global crude prices ripped a hole in its revenues, Reuters reported.
Angola is Africa’s second biggest oil exporter and relies on sales of the fossil fuel for about 65 percent of total tax revenue, but a combination slack crude prices and years of mismanagement at state oil-producer Sonangol have left it struggling for funds.
The IMF’s Extended Fund Facility (EFF) is a loan pegged on deep structural, macroeconomic and governance reforms designed to help countries with weak economic growth and problems paying bills.
In a statement, the fund said Angola had made progress in reducing state spending and broadening economic activity outside of oil, but that the economic outlook was still uncertain and it had to do more to fight mismanagement and corruption.
“The authorities’ commitment to fiscal consolidation has been illustrated by the outperformance of the end-June 2019 non-oil primary fiscal deficit target by a wide margin,” said Tao Zhang, IMF deputy managing director and acting chairman.
“To mitigate the elevated risks to debt sustainability, the authorities need to persevere with measures to mobilize non-oil revenue and bolster transparency of state-owned enterprises.”
A part of President João Lourenço’s sweeping reforms is an ambitious plan to selloff key state assets, including stakes in Sonangol and more than 100 other enterprises.