IMF completes fourth review of Extended Fund Facility arrangement for Angola, approves $487.5m disbursement
The Executive Board of the International Monetary Fund (IMF) completed the fourth review of Angola’s economic program supported by an extended arrangement under the Extended Fund Facility (EFF). The Board’s decision allows for an immediate disbursement of $487.5 million, bringing total disbursements under the arrangement to $3 billion.
Angola’s three-year extended arrangement was approved by the Executive Board on December 7, 2018 , in the amount of $3.7 billion at the time of approval). It aims to restore external and fiscal sustainability, improve governance, and diversify the economy to promote sustainable, private sector-led economic growth. At the time of the third review, the Executive Board also approved the authorities’ request for an augmentation of access of $765 million at the time of approval) to support the authorities’ efforts to mitigate the impact of COVID-19 and sustain structural reform implementation.
The multifaceted nature of the COVID-19 shock continues to negatively impact Angola’s economy and population. Oil production and prices remain weak, and the health and social impacts of the pandemic continue to be felt. The authorities have maintained a robust policy response in the face of these challenges and remain resolutely committed to the program.
The authorities achieved a prudent fiscal adjustment in 2020 that included non-oil revenue gains and restraint in non-essential expenditure, while preserving essential spending on health and social safety nets. The passage of the 2021 budget in December consolidates these gains. The authorities have also allowed the exchange rate to act as a shock absorber and have begun to implement a gradual shift towards monetary tightening to address rising price pressures.
The Executive Board also approved the authorities’ request for waivers of applicability and nonobservance of performance criteria and modification of some performance criteria, indicative targets, and structural benchmarks.