"With regard to budgetary pressures, the great budgetary flexibility of 2022 left Angola more exposed to external shocks; the return to budgetary adjustment in 2023 and 2024, as planned, is essential to maintain debt sustainability", said economist Thibault Lamaire in an interview with Lusa, on the sidelines of the IMF and World Bank Annual Meetings, which took place this week in Marrakesh.
For this economist from the African department and one of the authors of the report on the Regional Economic Perspectives for sub-Saharan Africa, Angola must maintain budgetary discipline and the reform program to relaunch economic growth and attract investment.
"In the short term, a combination of policies and reforms is imperative to meet Angola's budgetary and debt targets and ensure its sustainability and stability, which may include fiscal policy measures unrelated to the oil sector, subsidy reform to fuels, and structural budgetary reforms", says Thibault Lamaire, stressing that "appropriate social support systems must be implemented to mitigate the impact on the most vulnerable population of the reform of fuel subsidies".
In the interview with Lusa, the economist stated that "the continued high dependence on the oil sector constitutes a problem for economic development" and highlighted that "the diversification of the oil sector into other sectors with high potential, such as agriculture and technology information and communication, is crucial in the medium term".
The IMF predicts that Angola's economic growth will slow down this year to 1.3 percent and stabilize at around 3.4 percent in the medium term: "The short-term prospects mainly reflect the drop in oil production observed in this period, while while the medium-term perspectives are supported by the authorities' plans to move forward with structural reforms to promote diversification", he explained.
For the Fund, with oil production falling, Angola must give priority to structural reforms because "reducing dependence on the oil sector is essential and must continue to be the authorities' priority in the medium term, in order to reduce the vulnerabilities arising of the greatest volatility in this sector".
