The International Monetary Fund (IMF) considered, in an analysis published on its website, that the implementation of political actions to promote economic diversification is imperative to achieve sustainable and inclusive growth in Angola.
The Angolan authorities are going in the right direction, although some efforts have to be intensified and accelerated”, reads the note, which exemplifies with the privatization program to defend faster implementation of reforms.
For the IMF, in the analysis highlighted by the Portuguese media, including Lusa, the newspaper Expresso, O Observador and Jornal de Negócios, despite Prodesi working in the right direction and tackling some of the constraints, the Implementation efforts should be strengthened and the policy response should take a holistic approach to building conditions to improve access to credit provided by the private sector.
Despite the tone of praise for the government’s efforts to fulfill the program and the reforms agreed under the agreement that allowed the disbursement of US$4.5 billion in the last three years, the IMF points out that there is still a lot of work ahead.
“The authorities continue to strengthen macroeconomic stability, by capitalizing on the objectives achieved under the financing programme, but more improvements are needed in productivity, in particular by improving Angola’s infrastructure and human capital”, say the analysts, giving specific examples of what authorities should do.
The organization advances that the diversification of Angola’s economy, still very dependent on oil revenues, is the main priority and determinant to guarantee sustainable and inclusive economic growth.
“Angola’s economy is too dependent on the oil sector, leaving the economy vulnerable to fluctuations in global oil prices. This encompasses the symptoms of the Dutch disease, which can erode competitiveness and delay the development of other sectors”, reads the analysis.
The IMF stresses, however, that the development of the non-oil sectors is even more critical to achieving sustainable growth, given the uncertainties regarding the long-term prospects for local oil production and the global trends towards neutrality of carbon emissions.
The analysis of the Angolan economy was carried out a few days before the approval of the last tranche under the US$4.5 billion financing program, which ended in December 2021, and provides more theoretical background information for the technicians who evaluated the fulfillment of the program’s quantitative and qualitative goals.