IMF to disburse US$488mil to Angola

The IMF in October forecast Angola’s gross domestic product to grow 3.2% in 2021 after contracting for five straight years

WASHINGTON DC: The International Monetary Fund approved the disbursement of US$488mil to Angola and reiterated its confidence that Africa’s second-biggest oil producer will rein in public debt to sustainable levels.

The disbursement approved by the executive board comes four months after the Washington-based lender increased the size of the loan by almost a quarter to US$4.5bil to help Angola weather the fallout of the coronavirus pandemic.

The three-year Extended Fund Facility, which began in 2018, aims to overhaul the southwest African nation’s economy with reforms to reduce its dependence on oil and lower its debt burden.

A sharp drop in oil prices last year, stemming from the pandemic, forced Angola to seek debt relief worth US$6.2bil from three key creditors, easing fears of default in one of Africa’s most indebted countries.

It also secured a temporary waiver of US$1.78bil in bilateral debt-service payments.

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.”

The IMF in October forecast Angola’s gross domestic product to grow 3.2% in 2021 after contracting for five straight years.

The Angolan government sees a much slower recovery with the economy expected to record no growth this year. — Bloomberg

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