Angolan Economy to Grow 2.9% This Year on Oil Gains, IMF Says

(Bloomberg) -- Angola’s economic growth is forecast to accelerate to 2.9% this year from an estimated 0.1% in 2021, boosted by higher oil prices and a relaxation of Covid-19 restrictions, the International Monetary Fund said.

“Angola’s economic performance is beginning to improve after years of recession,” the Washington-based lender said in a statement published on its website that includes a final staff report on Angola’s three-year extended arrangement. “Vulnerability remains high, however, with very elevated debt levels and a heavy reliance on volatile oil export receipts.”

Africa’s second-biggest oil producer has “met or shown significant progress” on key recommendations of its $4.5-billion program that ended last year, the IMF said. It commended Angola for implementing a flexible exchange rate regime but said the nation only “partially met” its recommendations to foster private sector-led growth and diversification.

Angola, which relies on oil for more than 90% of its export revenue, turned to the IMF in 2018 after falling into recession two years earlier following a sharp drop in oil prices and production. President Joao Lourenco, who came to power in 2017, has pledged to tackle corruption and open the economy to foreign investors by selling state assets.

While Angola’s privatization program adhered to “good international practice,” the number of sales so far is “modest,” the IMF said. The authorities have prepared a strategic roadmap for future reforms in state-owned companies, it said. 

The plan comes after Angola signaled that the disposal of stakes in state-owned oil company Sonangol and diamond firm Endiama, among 195 companies slated for privatization, is expected to suffer setbacks.   

Patricio Vilar, head of state asset-management institute IGAPE, said on Nov. 10 that no deadline had been set for the transactions for Sonangol and Endiama and that both companies still needed to carry out restructuring programs. 

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