"The risks have risen dramatically, but the authorities' strong political response and perseverance in implementing the reforms will help the program stay on course," reads the third detailed assessment of Angola's financial adjustment program.
"The government's determination to tackle the crisis head on with significant international financial support, through increased lending, the debt service suspension initiative and debt restructuring, are critical to keeping the program on track," IMF staff point out in their December 2019-June report on the country's performance.
For the IMF, Luanda has managed to maintain a prudent fiscal policy and move forward with debt and reform management, having also achieved "a balance between exchange and monetary policies in the face of the economic impact of the covid-19 pandemic.
The implementation of structural reforms, among which the IMF highlights the privatization program, "will help to diversify the economy and improve potential growth prospects, while the new safety net will improve the difficulties for the most vulnerable".
In the recommendations to IMF management, staff advise approval of the third evaluation, an increase in the amount of the program to about 4.5 billion dollars, reprogramming of payments to the IMF, and modifications to program targets, which "have been generally satisfactory".
The IMF's financial assistance program, analysts conclude, "continues to be a strong instrument, sending a positive signal to economic agents and helping to secure donor support".
On Wednesday, the IMF board approved Angola's request for increased financial assistance, immediately disbursing 1 billion dollars and raising the program's total to almost 4.5 billion dollars.
"The board's decision allows for an immediate disbursement of one billion dollars to Angola and an increase of around 765 million dollars until the end of the program," to almost 4.5 billion dollars, the IMF then announced.
In the press release accompanying the announcement, the IMF explains that this third positive evaluation of the financial aid provided under the Extended Fund Facility allows for the disbursement of an additional one billion dollars, making up some 2.5 billion dollars already delivered since the signing of the agreement on 7 December 2018.
The main objectives of the agreement are "to restore external and fiscal sustainability, improve governance and diversify the economy to promote sustainable economic growth, led by the private sector.
