africa Angola Economy Finance

IMF wants Angola debt below 90% of GDP

Angolan Secretary of State for Budget Aia-Eza da Silva said on Friday that the Angolan government and the International Monetary Fund (IMF) want public debt below 90 percent of gross domestic product (BIP).

In its Saturday edition, the state-run News Paper “ Jornal de Angola “ quotes the statements of Secretary of State to the financial information agency Bloomberg, made on the sidelines of the World Economic Forum on Africa, held in Cape Town.

The source quotes the official as having expressed hope that the IMF would approve the disbursement of the second tranche of the USD 3.7 billion Expanded and Converged Financing Programme to halt the rise in Angolan public debt.

“The IMF is concerned about public debt, which is about 90 percent of GDP and made it clear that this ratio should not be increased,” Aia-Eza da Silva said in the interview.

The Secretary of State said the fact that of Angola to have benefitted from a total of USD 1.24 billion in less than a year, “ it was a great achievement because it was a lot of work.

“We are trying our best on the economic side and this is the main way to evaluate us. Therefore, we hope that the next tranche of the loan can also be disbursed, “added the Secretary of State.

The public debt has increased significantly in recent years due to the fall in oil revenues in foreign currency, which has led to a kwanza depreciation and a rise in inflation.

In June, the IMF estimated that Angola’s public debt had stood at 91 percent against GDP in 2018, and that this figure is sustainable as long as there are no major shocks in the economy.

“Despite a planned increase for 2019, Angola’s debt is considered sustainable, but with little room for maneuver for major shocks,” the IMF detailed analysis shows in the first review of the assistance programme that Angola agreed at the end of the year and which was released at the end of June.

The IMF assumes that debt-to-GDP ratios and debt-to-income ratios “will remain high throughout the programme,” warning that this “leaves little room to accommodate large shocks or debt that go beyond the program’s projections ”.

Source: Angop

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