"The economic crisis has put the reform program on hold, especially privatizations, has degraded the financial situation, suspended the oil block exploration and development program and debt interest has skyrocketed, but international creditors have come to save the country," said Dominique Fruchter.
In an interview with Lusa regarding the economic prospects for the country, this analyst at Coface, one of the largest credit insurers in the world, stated that "the support program of the International Monetary Fund (IMF) was increased by US $ 800 million, Angola is the country that most benefits from the Debt Service Suspension Initiative (DSSI) and has restructured the debt to Chinese public creditors, which will allow debt relief totaling $ 6.2 billion by 2023 ".
For this analyst, "the deterioration of Angola's financial situation seems to have been offset by increased aid from creditors and, moreover, the authorities are determined to maintain the program of budgetary reform and consolidation, with the elimination of the budget deficit in 2021 and public debt to fall from 110 percent to 107 percent, even in the context of low oil prices. "
The government's "solid political position" allows the pace of reforms to be maintained, argues the analyst, for whom "Angolans appreciate the ongoing struggle against corruption and the legal charges against the former President's family members who are suspected of personal enrichment. ".
Asked if the risk of financial default is still a concern, Dominique Fruchter replied: "Even if the risk of default remains high, it is not significantly higher than it was before the crisis due to international support, mainly from China; a default on debt, although possible, is not our central scenario in the foreseeable future, in which we anticipate further restructuring with creditors ".
The covid-19 pandemic, he explains, reached Angola through two channels, the first being the drop in oil prices and production, in addition to the drop in diamond exports, and the second the measures to combat the pandemic itself.
"The second channel of impact of the pandemic in Angola was the set of distance and containment measures taken by the authorities, which affected domestic demand and, as a result, the economy is expected to go through the fifth year of contraction in 2020, with a fall in the GDP of 4 percent after having already decreased 0.9 percent in 2019 ", says the analyst in the interview to Lusa.
For the next year, Coface forecasts moderate growth, at most 2 percent, and unemployment is expected to rise to 33 percent, coupled with failures in food availability and rising prices due to difficulties in the transport and transportation sectors. logistics, including the rapid depreciation of the kwanza, which, he concludes, "constitutes a negative impact for the population, much of which was already experiencing difficulties".
