In a document entitled "Angola's response to the deteriorating global economic outlook", released on Tuesday on its website, the Debt Management Unit stresses that the Government remains "fully committed" to the reformist agenda it is implementing with the International Monetary Fund, to strengthen the country's economic and financial stability.
In response to the "pressures" resulting from the covid-19 pandemic, the Council of Ministers approved a set of additional measures including reforms in public administration, budgetary adjustments with a downward revision of oil and diamond prices, recapitalization of the Credit Guarantee Fund and postponing the withdrawal of fuel subsidies until next year.
With the administrative reform, the number of ministries has been reduced from 28 to 21 and several state agencies, considered non-essential, will be merged or eliminated.
Budgetary adjustments include revising the barrel price to less than $ 35 and diamonds to $ 100.3 per carat, lowering oil production to 1.36 million barrels per day and a conservative monetary policy to limit the effect of drop in oil prices in the international reserves of the National Bank of Angola.
"The planned reforms include significant budget cuts, monetization of assets of the Angola Sovereign Fund, sale of selected assets and issuance of local debt securities to the National Insurance Agency, representing, in aggregate terms, additional savings of US $ 3 billion during the rest of 2020 ", highlights the unity of the Ministry of Finance.
The document adds that the Government continues to work "closely with its international partners and multilateral development banks" to strengthen Angola's financial position and reaffirms the Finance Minister's commitment to the financial markets and international investor community.
The deterioration in the global economic outlook caused by the covid-19 pandemic, associated with the shock of oil supply and the consequent fall in raw material prices "put additional pressures" on the country's economy and finances.
As a result, the main credit rating agencies have revised the Angolan rating downwards.
On March 6, Fitch Ratings downgraded Angola's rating from "B" to "B-" with a stable outlook, justified by the impact of lower oil production and prices and the more pronounced exchange rate depreciation than expected, which raised public debt levels.
Standard & Poor's, on 26 March, lowered Angola's medium and long-term sovereign debt risk rating from "B-" to "CCC +" with a stable outlook, maintaining the short-term risk at "B", pointing concerns about achieving fiscal consolidation and increasing levels of public debt.
Moody's also put its B3 rating under review to assess the credibility of the Government's plans and reforms and its ability to mitigate the impact of the recent drop in oil prices on the national economy.
