- The International Monetary Fund (IMF) has today announced it would provide support to Angola with a 27-month Stand-By Arrangement, to help the country stabilise its economic position.
"The programme aims to alleviate immediate liquidity pressures, boost market confidence, and restore a sustainable macroeconomic position. It is centered on the authorities' objective of strengthening the public finances through an appropriately tight 2010 Budget, backed by firm policies on monetary management," said Lamin Leigh in a statement at the end of the IMF visit to Luanda which ended today.
He also explained that the programme calls for protecting social spending while also it emphasises the need for continued progress on improving public financial management in both the central government and the broader public sector, including state-owned enterprises.
“In the coming weeks, the Angolan authorities and Fund staff will seek to finalise the remaining details of the proposed Stand-By Arrangement, with the intention being to present the programme to the IMF Executive Board in November 2009,” he said.
The IMF mission in Angola noted that the economy of the Southern African state is facing a challenging year in 2009, stating that after recording double-digit growth rates since 2004, the pace of growth has slowed in 2009 and inflation reached 13.75 percent in August, reflecting higher food prices and continued supply bottlenecks.
The plunge in oil revenues in the first half of 2009 has shifted both the fiscal and current account positions into substantial deficit, the mission also stated.
“Responding to the adverse fallout from the global economic crisis, the government has taken forceful measures that have helped to stabilise the international reserve position. The National Bank of Angola has tightened monetary policy, and fiscal policy was also tightened considerably in the 2009 supplementary budget. While an economic recovery is expected in the first half of 2010, the government continues to face sizeable challenges in macroeconomic management and financing needs remain large," said Mr Leigh.
The IMF mission, led by Mr Leigh visited Luanda during 22-30 September as part of the continuation of discussions on the immediate policy challenges facing Angola and on the possible elements of a policy package that could be supported by an IMF financial arrangement.
Angola, like many African oil producing states has had to face budget constraints as well as shift its spending priorities as the economic meltdown hit hard on the crude markets. The country is also emerging from decades of a civil war that devastated its infrastructure and held back its economic sectors.
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