Africa-Press – Angola. The representative of the International Monetary Fund (IMF) in Angola said that there are no negotiations with Angola for a new support program, but that the financial institution “remains very close as an advisor”.
“What we do regularly is share with the Government, with the Angolan authorities, what the financing options would be if they wanted to formally request a program with the International Monetary Fund”, said Victor Lledo, who presented the Report on the Regional Economic Prospects of Sub-Saharan Africa, focusing on its Interrupted Recovery.
On the sidelines of the presentation made, in Luanda, at the Faculty of Economics of the Agostinho Neto University, Victor Ledo told Lusa that the IMF also continues to provide the Angolan Government with training for its staff.
Regarding the economic outlook, the expert said that Africa, and Angola, began a very encouraging economic recovery process in 2024, rising from 3.6% in 2023 to 4% in 2024, and Angola accelerated its economic growth from 1% to 4.5% in this period.
This recovery was accompanied by a reduction in macroeconomic imbalances, such as inflation, public debt and reserve levels, and greater exchange rate stability, he highlighted, resulting in improved access to international markets, supported by “difficult economic policy measures”, such as exchange rate flexibility and reduction of subsidies.
“Unfortunately, this incipient recovery, both in Africa and in Angola, runs the risk of being interrupted this year, due to the current global scenario of heightened tariff war, as it generates uncertainty, negatively impacting global growth prospects and the prices of raw materials, including oil,” he said.
Growth projections for this year on the African continent and, in particular, Angola, taking these effects into account, “should slow down to 3.8% and 2.4%”, respectively, a scenario “worsened by the decline in external aid”.
Victor Lledo highlighted the need to mitigate these external shocks, with greater mobilization of domestic revenues, reforms to increase efficiency and transparency in the management of public finances, in order to reduce the costs of external financing, and structural reforms to accelerate economic diversification and increase the region’s trade integration.
Regarding the challenge of inflation in Angola, the IMF representative stressed that the rate remains high, but has gradually shown a “strongly declining” trend, going “from a peak of 30% in July 2024” with the latest data pointing to “a little above 22%”.
“Largely due to a restrictive monetary policy adopted by the National Bank of Angola and our position is that this monetary policy is welcome and should be continued until inflation shows a drop to close to single digits,” he stressed.
Regarding the withdrawal of fuel subsidies, Victor Lledo stressed that subsidies “are extremely regressive and tend to benefit higher income groups in the population”, consuming “necessary and fundamental fiscal space” for social protection and infrastructure expenses.
The Angolan Finance Minister stated last April that there will be further cuts in transport subsidies this year, which have been taking place gradually since 2023.
According to the official, it is important that this reform continues, emphasizing that additional increases in fuel prices must reflect in improving the conditions of the most vulnerable groups.
“What the Angolan government has done, in parallel with the increase in fuel subsidies, was to expand Kwenda [a cash transfer program for vulnerable families]. It is very important that this situation continues, not only in rural areas, but also in urban areas, this and other forms of compensation,” he stressed.
Victor Lledo also emphasized the need for good communication of its objectives, and public finance management reforms, to increase fiscal transparency of resources, “very important to give confidence to the population in general, that the money is being spent on the correct destination”.
ANGOLA24
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