- The Angolan government was urged to make "rapid advances towards economic stability and effective use of resources" during a visit in Luanda by a delegation of the International Monetary Fund (IMF). As peace is now secured in Angola, the IMF held it was time for "significantly higher pro-poor spending," increased transparency and improved government dialogue with the civil society.
IMF Deputy Managing Director Takatoshi Kato this week made his first visit to Angola, where he met with President Jose Eduardo dos Santos, several ministers, the Governor of the National Bank and civil society groups. The high IMF official was given a "warm welcome" by Angolan authorities, hoping to improve its ties with the Fund. Mr Takatoshi however made it clear that the IMF wanted much influence over Angola's economy in return for its aid.
- In my meeting with the President, I welcomed the gains that Angola has made in recent years, said Mr Takatoshi today. As peace had now been secured and some economic reforms were being implemented, the public finances were improving and inflation is on the decline, the IMF official and President dos Santos had observed.
Mr Takatoshi however also told the Angolan President that the task ahead for his country was now to "fully exploit the enormous opportunities for development, stemming from Angola's major resources, including notably - its people, its mineral wealth including oil and diamonds, and its agricultural potential." President dos Santos in the talks had reaffirmed his desire to see macroeconomic stabilisation take hold as well as a strengthening of dialogue with the IMF.
The IMF official, speaking with the Angolan economic management team, said that the Fund was waiting for a "deeper dialogue" on economic reform. "I reiterated that the IMF stands ready to work with Angola to secure an environment of high-quality growth and low inflation," said Mr Takatoshi. Such an environment was "necessary to reduce poverty," he added.
There were two particular areas where the IMF official urged Angolan authorities to consult with the IMF before making decisions. These included economic management and the issue of corruption and transparency.
- First, on economic management, I urged the authorities to be ambitious in their efforts to stabilise the economy, said Mr Takatoshi. The current high oil prices were providing "an excellent opportunity to get inflation down to single-digit levels quickly," he said. This again would help Angola's many poor and establish a sound basis for economic stability and recovery, in accordance with the economic theories maintained by the IMF.
With the advent of peace there was now room for "significantly higher pro-poor spending, while making adequate provisions for spending on reconstruction," noted Mr Takatoshi. In discussions about the forthcoming budget, the IMF official had emphasised that fiscal deficits had to be brought down to low levels to ease the burden on monetary policy and to provide room for private sector growth.
Second, Mr Takatoshi urged the government of Angola to take "stronger efforts to enhance transparency in the government's budget and central bank operations, including the management of oil resources." Angola is known to have enormous natural resources, in particular oil, and a relatively low population. The ended civil war and rampant corruption however keeps the population majority in deep poverty while the political elite enjoys great wealth.
- The government needs to build upon recent advances to meet the President's objective that scarce resources are used in the best possible manner for the people of Angola who have borne immense sacrifices during the last two decades, said Mr Takatoshi. This would only be possible with more transparency in the oil sector, he added.
Finally, Mr Takatoshi emphasised the need to create a broader dialogue in Angola. He himself had meetings with the leader of the ex-rebel UNITA opposition party as well as with representatives of the church, academic, business and diplomatic communities. In particular his meeting with children and orphans at a centre run by Father Caballelo in Luanda had assured the IMF official that civil society had many skills that would contribute to the recovery of Angola.
- I look forward to rapid advances towards economic stability and effective use of resources, said Mr Takatoshi. "It is my firm hope that - with adequate will and effort - we will be in a position to conclude discussions on a staff monitored programme within the next few months. The successful implementation of such a program is a prerequisite for Angola to access IMF resources," he added.
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