The crisis caused by covid-19 and the sharp drop in the price of oil pushed Angola into a complicated situation, in financial terms, forcing the country to resort to more funding.
According to Expansão, which quotes the IMF's third evaluation report on compliance with the financial aid programme, the government has asked to borrow a further 3.821 billion dollars this year and 2.899 billion dollars next year.
The figures requested for this year will require a further negotiation of the debt with the creditors, worth about 2591 million dollars, indicates the Expansion.
"The increase [in the IMF loan] would provide part of the additional financing required, with the remainder to be provided by the G20 DSSI [debt service suspension initiative] and debt restructuring. In addition, with the expected expansion of the pandemic in Angola, the authorities would like to have room to move forward on drug imports and testing, and are therefore requesting a reformulation of IMF disbursements for the remainder of 2020," the Washington-based financial institution paper notes.
The request presented by Angola will be analysed by the IMF on 30 July and, if accepted, Angola's debt to the IMF will represent around 6.2 per cent of Angola's GDP.
However, the report advises the IMF to accept the request because it considers Angola has the capacity to repay the debt.
The authors of the third evaluation of compliance with the programme point out that "the risks to the IMF will be mitigated by renegotiating the debt with other creditors.
This chapter includes a three-year moratorium on interest and repayment payments obtained from China, a country to which Angola owes close to 22 billion dollars, between bilateral and commercial debt.
The IMF points out that Angola "has already concluded the restructuring of its debt with two 'major international creditors'" and that it "is negotiating debt relief with a third party".
The report cited by Expansão also noted that after the three-year moratorium, payment of the largest loan would have to be made in seven years, starting in 2024.
"Thus, between the renegotiation with the main creditors and the increase in IMF financing, debt sustainability will be guaranteed in the near future. Even if, according to the report, it reaches 123 percent of GDP by the end of 2020," reads the weekly.
The renegotiation of the debt and an increase in financing by multilateral institutions allowed the executive to avoid a possible 'default' - or default in the payment of its debt - a situation that would harm the country, which would be prevented from obtaining new loans.
In addition to funding from multilateral institutions - such as the IMF and World Bank - the report points out that Angola "will also have money from ongoing privatisations, the release of credit lines already opened, the use of public reserves and the sale of financial assets from the Sovereign Fund of Angola," says Expansão, conditions that the IMF believes will reduce "the need for loans.
