IMF offers oil-dependent Angola $4.5 bn loan

Luanda, Angola | AFP |

The International Monetary Fund said Tuesday it had offered Angola $4.5 billion in loans as the country, which was wracked by civil war until 2002, has been badly impacted by falling oil prices.

“Angola can receive a maximum $4.5 billion (4.0 billion euros)… the loan can be repaid in less than 10 years,” IMF official Ricardo Velloso told reporters in Luanda during a two-week visit to the country.

Angola’s economy grew rapidly after the end of the 27-year war as oil production fuelled a boom in the capital Luanda.

But it has depended on oil production for 95 percent of its export earnings and more than half of government receipts.

“The Angolan economy continues to be severely affected by the oil price shock of the last two years,” an IMF statement said.

“The outlook for 2016 remains difficult, despite the increase of oil prices in recent weeks, and economic activity will likely decelerate further.

“Maintaining fiscal prudence in the run-up to the 2017 elections will be critical.”

It said Angola’s GDP growth had slowed to three percent in 2015 and that inflation was at an annualised 26 percent to May.

Velloso said Angola had asked for the loan when oil prices were lower than the current rate and the government now have to confirm the loan sum.

There was no immediate comment from the Angolan government.

Angola had a previous 2009-2012 support programme from the IMF which was worth $1.4 billion to help it resolve domestic debts, stabilise its exchange rate, and shore up its international reserves.