IMF Disburses $488 Million to Angola, Backs Plan to Cut Debt

The International Monetary Fund approved the disbursement of $488 million to Angola and reiterated its confidence that Africa’s second-biggest oil producer will rein in public debt to sustainable levels, Bloomberg News reported. The disbursement approved by the executive board comes four months after the Washington-based lender increased the size of the loan by almost a quarter to $4.5 billion to help Angola weather the fallout of the coronavirus pandemic. The three-year Extended Fund Facility, which began in 2018, aims to overhaul the southwest African nation’s economy with reforms to reduce its dependence on oil and lower its debt burden. A sharp drop in crude prices last year, stemming from the pandemic, forced Angola to seek debt relief worth $6.2 billion from three key creditors, easing fears of a default in one of Africa’s most-indebted countries. It also secured a temporary waiver of $1.78 billion in bilateral debt-service payments from the Group of 20 leading economies. The measures “will provide significant debt-service relief and help reduce risks related to debt sustainability,” Antoinette Sayeh, one of the IMF’s deputy managing directors, said in a statement late on Monday after the fund concluded its fourth review of the loan facility. “Given Angola’s sensitivity to oil-price shocks, it is important that the authorities remain vigilant in managing these risks.” Further gradual monetary tightening is needed to curb inflation, said Sayeh, who commended efforts to liberalize the foreign-exchange market after greater currency flexibility helped the country absorb shocks during the crisis. Read more.