Ver Angola

Economy

Vera Daves: Angola resists commercial banking and prefers cheap financing

The finance minister said Wednesday that she has had to tell commercial bankers several times to calm down because the country's priority is financing on concessional terms, below market rates.

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"We have received many proposals from commercial banks to finance specific projects, and our initiative is to tell them to calm down, because the priority is the private sector, direct investment, we want to take our foot off the accelerator regarding financing lines," said Vera Daves during a conversation with the president of the World Bank, which took place this Wednesday afternoon in virtual format from Washington, as part of the Spring Meetings organized jointly with the International Monetary Fund (IMF).

Opening the panel on 'Rethinking Debt: Financing the Future in a Crisis', Vera Daves said that "the commercial banks are still interested in providing financing to Angola, but Angola wants to move towards a strategy of combining private sector funds and concessional funds", that is, below market interest rates.

Answering a question about the interest of commercial banks in the country, the minister replied that this combination of the two types of financing aims to "invite the private sector to get involved and participate with us in growth and in exploring opportunities, and to find funds through concessional terms that sometimes are not acceptable to commercial banks.

It is a process "that in some ways is painful because there is a mental framework and different strategies, and some of our partners are already starting to understand, but at first it was not easy to negotiate under these terms," he pointed out, concluding that Angola is "committed to private investment and to having concessional financing, resisting signing contracts on commercial terms that will add stress to the debt situation."

The IMF foresees that Angola will leave recession this year, growing 0.4 percent and accelerate growth to 2.4 percent in 2022, also anticipating a reduction of public debt to less than 100 percent of GDP next year.

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