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Covid-19: emergency economic measures

Óscar Sousa


With the entry into force of the "state of emergency", we will witness a recession in our economy that, "for a change", will bring very serious consequences to the lives of Angolans. As the consultancy FocusEconomics predicts, due to the covid-19 pandemic, this year, Angola will have an economic recession of 1.2%. Also according to the aforementioned consultant, this recession will be accompanied by inflation that is expected to increase to 20.2%, a strong devaluation of the Kwanza and a BNA Reference Interest Rate of 16.3%.


The severe decisions taken by the countries already have negative effects on the economy as a whole. Based on State intervention in the economy, as proposed by Keynes, some measures are being adopted to reduce the social, economic and financial impact of the coronavirus.

In order to minimize the impact that confinement will bring to the national economy, I present two suggestions that can serve as emergency measures, aiming at the maintenance of jobs and subsistence of Angolan families:

  1. Credit Line: to maintain jobs and currency in our economy, commercial banks could open a credit line for micro, small and medium-sized companies in a period of not less than 6 months. This amount would serve to support Working Capital (part of the investment that serves to meet the financial needs of the company, for example, payroll).

The proposed loan would have the Ministry of Finance as an endorser (debt guarantor). As for reimbursement, this should be followed by a grace period of not less than 2 years (which may be reduced or extended, taking into account the financial statements of the companies), with zero interest rate or subsidized interest rate, that is, interest rate lower than market interest rates.

    2.   Facing the tax issue: the tax, directly affecting both individuals and companies, with the decree of confinement, also deserves special attention. The State should suspend taxes for a period of 4 to 6 months. Taxes may be paid at the end of this period, without penalty or interest on late payment.

As Angola does not actually have Income Distribution Programs for the poorest families, in the current context, suspending taxes, fees and other contributions, would allow the application of family income for spending only on basic necessities.

Despite the sensitivity - when we talk about non-payment of taxes, even if temporarily, as it is a source of revenue for any State - the current moment demands more than special attention to social issues, since families are confined and need means of subsistence.

Is it urgent! We need to act! Despite the possible revision of the OGE, given the drop in oil prices, it is PRIORITY to preserve the lives of Angolans!

Certainly, such measures will not extinguish the flames that have long burned fervently and condition the lives of Angolans, the proposed measures can serve to mitigate the economic collapse that lies ahead!

The situation we live in is complex. Therefore, we need a careful analysis between the economic and health issues of Angolans. Without the existence of an effective remedy (scientifically proven), nor the existence of a vaccine, for now, the only way to fight the virus is confinement. It is also important to note that the more rigorous this confinement is, the shorter the expansion of the transmission curve will be.

Given the serious weaknesses of the National Health System, we urge big businessmen to contribute with donations for the acquisition of tests and materials for the prevention of coronavirus.

It is also important to appeal to business groups, workers, unions, civic associations, political parties and organized civil society, to continue exercising their role, presenting proposals to improve the current scenario. To those who have the power to execute, we call on you, with responsibility and commitment, to appreciate the contributions coming from the various strata of society.

Note: with a greater number of tests, the Ministry of Health will be able to effectively map the areas with the greatest contagion of the virus and, thus, direct actions to reduce the expansion of the transmission curve.

Opinion of
Óscar Sousa

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