Africa-Press – Angola. When he took power in September 2017, President João Lourenço found the country in serious economic and financial problems. An economy totally dependent on oil, impeded from sustainable and inclusive economic growth by several factors.
Major international financial institutions had stopped working with Angolan banks and the country’s credibility was far below desired levels. Corruption, which for years had shaken the country’s institutions, had reached its point of uncontrolled… that is, compensation for the dollar that became evident to the worrying situation of banking in Angola, namely the lack of transparency in the management of banks and their capital. In 2018, the Government of Angola turned to the International Monetary Fund to implement the economic reforms that The arrival of the IMF implied an evaluation of national banking and its practices.
Even in 2018, the director general of the International Monetary Fund (IMF), at the time, came to Luanda to formalize the loan of US$3.7 billion. The IMF discussed with the Angolan authorities macroeconomic prospects and risks, public debt sustainability, the country’s external accounts, business environment, economic diversification and inclusive growth, sound financial system, asset management and fiscal policy. It was the Executive in search of credibility with international creditors and in this it focused on budgetary discipline and the recovery of the economy for a better quality of life for populations and companies. Reducing the public deficit, whether through revenue or expenditure, has become a top priority.
Expanded Financing Program
During the IMF intervention phases, Angola demonstrated discipline and responsibility as a State in fulfilling the three-year program with the IMF.
With the Expanded Financing Program, it was possible to balance fiscal and external accounts, regularize the foreign exchange market and carry out important reforms that led to the resumption of economic growth in the country based on the private sector.
Inflation, at that time, was on the rise and citizens were in permanent discomfort and tightness.
Aware of the context, President João Lourenço, who took over the country with his sleeves rolled up, initiated external contacts to resolve the situation and take the country out of the crisis.
The effects of the IMF intervention began to have an immediate effect. The report on the “Global Economic Prospects”, released in Washington, in what was predicted about Angola, the third largest economy in Sub-Saharan Africa and the second largest oil producer in the Sub-Saharan Region, acknowledged the positive growth rate after four years of recession. The international financial institution, however, cut the growth forecast for Angola by around half, anticipating expansions of 1.5 and 2.4 percent in 2020 and 2021, respectively, and an acceleration to close to 3, 00 percent in 2022.
Economic growth reached 1.5 percent this year and accelerated to an average of 2.7 percent in 2021 and 2022. National and international economists, warning that “this projection is the result of ongoing structural reforms, supported by a prudent monetary policy and budgetary consolidation, ensure greater macroeconomic stability and the continuous improvement of the business environment, a condition that encourages private investment.
Green Light From The Federal Reserve Brings Dollars Back
In 2020, the Federal Reserve of the United States of America gave the green light to the resumption of the relationship of US correspondent banks with Angolan financial institutions, after a delegation from the Federal Reserve of the United States of America… The US ambassador to Angola at the time said that the resumption of correspondence between Angolan and US banks, suspended in 2016, is very close to an end. The Angolan State thus reinforced the relations between the two institutions, in order to facilitate the exchange between the two countries.^
Continuous Commitment To The “Health” Of Companies
The Executive was committed to doing much more for the health of the economy.
Therefore, from 2018 to 2022, 2,000 micro and small businesses and cooperatives are registered and formalized by the proximity service teams (SIAC, BUE, GUE, Balcão do Cidadão and INAPEM), with 1,000 expected to be registered in 2021. In 2021, 43,549 micro and small companies and cooperatives were registered and formalized, which represents a level of execution of 4,355 percent compared to the annual target of 1,000.
This performance was due to the implementation, at national level, of campaigns to formalize economic activities. In accumulated terms, in the period 2018 – 2021, 43,800 micro and small companies and cooperatives were registered and formalized, corresponding to a 2,190 percent in relation to the target programmed for the five-year period established in the PDN 2018-2022.
The Informal Economy Reconversion Program (PREI) is being implemented at the national level, and it is expected, by April 2022, to register and formalize 56,200 micro and small companies and cooperatives, and to guarantee the promotion of digital payments by mobile phone for a universe of 50 thousand users. Additionally, the preparatory phase of the campaign to formalize economic activities began. The campaign in question materializes the first pillar of the Transition Strategy from the Informal to the Formal Economy, called “Immediate Measures for the Transition”.
PREI: From the forecast of 2 thousand to the result of 218 thousand formalized operators
The PDN 2018-2022 predicted the formalization of at least 2,000 economic operators, however, so far more than 218,000 economic operators have been formalized, of which 187,181 have been formalized by municipal administrations, through registration in the Municipality Portal and issuance of a salesperson’s card, 28,040 by Guiché Unique by the Company and 3,083 by FACRA, through the approval process for micro-credit requests. PREI, which is changing the lives of hundreds of Angolans, is a program co-financed by the Executive and the European Union and the African Development Bank, and has technical assistance from the United Nations Development Programme.
As for the formalization of economic agents, with regard to the monthly evolution of registrations, up to the present month, 169,406 registrations were made on the Portal do Munícipe.
Regarding the training of economic agents, regarding the monthly evolution of training activities carried out, in eight (8) months, 48,305 trainings were carried out by INAPEM.
Regarding the performance of the Micro-credit Line and analysis of its performance, the respective micro-credit line has disbursed 3,041 projects since it was created.
With regard to the fulfillment of the PDN targets on the analysis of the formalization of economic operators, from 2018 to 2022, 2,000 micro and small businesses and cooperatives are registered and formalized by the proximity service teams (SIAC, BUE, GUE , Balcão do Cidadão and INAPEM), over the period from January 2020 to May 2022, taking into account the powers provided for in the Organic Statute (EO) of the Ministry of Economy and Planning (MEP).
PRODESI
In cumulative terms, to date, a total of 2,892 contracts for the purchase of national production have been signed, which represents a degree of execution of 94.81 percent of the target programmed for the five-year period established in the PDN 2018-2022 (3,050 contracts ). Contributing to the performance of the indicator were the activities of holding business fairs and publicizing national production; mandatory contracts concluded under the financing lines and DP 23/19; contracts concluded between national producers with commercial and distribution operators and large supermarkets.
Improved Business Environment And Competition
During the period in question, significant advances were made in the different areas of intervention. The managing entities, which are part of the ministerial structures with competences in the business areas, were the ministries of Economy and Planning; Justice and Human Rights; Finance; transport; Industry and Commerce; Energy and Water; Public Works and Territorial Planning; Interior; Public Administration, Labor and Social Security; Telecommunications and Information and Social Communication Technologies; Territory Administration; the Superior Council of the Judiciary; the Provincial Government of Luanda and the Investment and Export Promotion Agency (AIPEX).
As a result of the methodology adopted by the MEP, based on the Action Plan and in compliance with the dictates of preparing the DB report, more than 50 reforms were implemented, for which we highlight the following:
1. Implementation of the Online Platform for the Business Opening process – “Single Online Company Guide”;
2. Completed the mapping of the processes for issuing the Matrix Certificate with a view to identifying the constraints in the procedures and reducing the time required for the applicant to obtain the certificate;
3.Publication of the Law on Securities Guarantees;
4.Completion of the process of dematerialization of the matrix certificates existing in all tax offices, in a total of 43 thousand matrices;
5.Elimination of the Verification Certificate (AdV) on import; 24. Eliminated the Tax Certificate during the export process;
6. Elimination of payment for the issuance of shipping certificates related to goods destined for export;
7. Elimination of the Statistical Registration Certificate (Presidential Decree no. 98/20, of 9 April);
8.The Commercial Permit for Low-Risk Activity was eliminated (Presidential Decree no. 98/20, of 9 April);
These and other reforms have made life easier for businesses and citizens.
A More Valued Kwanza In The Money And Foreign Exchange Market
The appreciation of the Kwanza is the main weapon to compensate for the increase in the prices of imported goods in the country. In addition to the strengthening of the Kwanza against the dollar, in recent months, and the increase in tax revenues through the increase in the price of oil, “consumers are also benefiting from the Government’s decision, in October 2021, to cut the rate of the Value Added Tax (VAT) on essential goods, from 14 to 7 percent”, which made life less difficult.
In just one year, the Kwanza appreciated 33 percent against the dollar and 49 percent against the euro. The national currency appreciated 33 percent against the dollar between the first half of March last year and 14 March this year and 49 percent against the European currency.
In year-on-year terms, one dollar changed the average exchange rate from Kz 615.3 to Kz 463.9, that is, minus Kz 151.4. The Euro went from Kz 756.7 to Kz 507.9, equivalent to less Kz 248.8, according to Expansion calculations based on data from the National Bank of Angola (BNA). The Kwanza appreciation trend was confirmed by the Bloomberg Financial Agency. Since the beginning of the year, the Kwanza has appreciated by 20 percent, driven by the rise in oil prices, increased macroeconomic stability, monetary policy and an increase in the rating. So far, it is the currency that appreciated the most against the dollar in 2022.
If there was any doubt as to the ability of the President of the Republic, João Lourenço, to change the slow pace of the economy inherited in 2017, the numbers leave the most skeptical and make us predict a better future in the next 5 years of governance.
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