PRESS: IMF Completes 4th Review of Extended Fund Facility for Angola

The International Monetary Fund (IMF) approved the disbursement of US$488 million to Angola and reiterated its confidence that it will rein in public debt to sustainable levels. The disbursement approved by the executive board will help Angola weather the fallout of the coronavirus pandemic. The three-year Extended Fund Facility, which began in 2018, aims to restore external and fiscal sustainability, improve governance, and diversify the economy to promote sustainable, private sector-led economic growth. Lion’s Head Global Partners acts as the International Financial Advisor to the Republic of Angola.

A sharp drop in crude prices last year, stemming from the pandemic, forced Angola to seek debt relief worth US$6.2 billion from three key creditors, easing fears of a default in one of Africa’s most-indebted countries. It also secured a temporary waiver of US$1.78 billion in bilateral debt-service payments from the Group of 20 leading economies.

The measures “will provide significant debt-service relief and help reduce risks related to debt sustainability,” Antoinette Sayeh, one of the IMF’s deputy managing directors, said in a statement after the fund concluded its fourth review of the loan facility. “Given Angola’s sensitivity to oil-price shocks, it is important that the authorities remain vigilant in managing these risks.”

As part of the IMF program, Angola has pledged to sell 195 businesses or stakes, including partial holdings in national oil company Sonangol and diamond firm Endiama, to boost its public finances and reduce the role of the state in the economy. The government also aims to remove fuel subsidies and increase public transport tariffs “once the pandemic subsides,” the IMF said in its last review of Angola’s program in September.

Written by
Martin Weber
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