Africa-Press – Angola. The International Monetary Fund (IMF) warns of the risks of replacing imports to stimulate production in Angola due to inflationary pressures and distortions in access to production factors.
In an assessment report on Angola released, the IMF highlights that controlling inflation continues to be decisive, recalling that it decreased to 27.5% in December 2024, after a peak of 30.5% in June 2024, mainly due to supply restrictions and exchange rate pressures, with import licensing being one of the main factors in the increase in food prices.
“It is estimated that supply-side cost pressure factors are responsible for more than half of annual inflation,” indicates the document consulted by Lusa. Recently, the Veterinary Services Institute, part of the Angolan Ministry of Agriculture and Forestry, announced that it would stop issuing import licenses for some food products of animal origin, namely offal and parts of poultry (chicken and duck), pigs and cattle, as a measure to strengthen domestic production and reduce its dependence on the external market.
In its assessment of Angola, the IMF recommends that, alongside monetary policy measures, priority be given to easing supply restrictions to control inflation, despite the Angolan authorities insisting that the measures are part of efforts to promote economic diversification, to support national production and strengthen food security.
“The authorities estimate that the potential benefits of these policies are higher than those estimated by IMF staff and expect that the increase in domestic food production capacity will minimize consumer prices,” says the international financial institution.
The document was prepared by an IMF team following discussions with the Angolan authorities on the country’s economic and political developments between December 4 and 17. In the report, the IMF highlights that accelerating medium-term growth requires economic diversification, greater private sector contributions and increased fiscal buffers, arguing that the implementation of the National Development Plan 2023-27 would benefit greatly from focusing on market-friendly policies.
“The risks arising from import substitution measures must be carefully assessed to avoid inflationary pressures and distortions in access to essential production factors,” he emphasizes.
On the other hand, attracting domestic and foreign private investment requires resolving governance vulnerabilities, simplifying corporate regulation, expanding financial inclusion and resolving property registration issues.
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