On Friday, Angola said it was close to concluding debt agreements with a number of Chinese banks and government authorities. The Angolan Ministry of Finance is due to sign a public financial management agreement with the International Monetary Fund (IMF) on Tuesday in Luanda for the implementation of a technical assistance programme that also includes planning the macroeconomic framework for fiscal purposes and improving the management of public investment, an official statement said. “The authorities have secured debt restructuring agreements by several major creditors to reduce debt sustainability risks. Continued vigilance in public debt management is essential to reduce these risks related to increased oil price volatility. A deal with a second major creditor, identified by analysts as EximBank, is being worked out with a similar reprofiling of capital payments, the IMF said in the report. Luanda reached an agreement in June with one of its main creditors, identified by analysts as CBD, the IMF said. The agreement provides a three-year deferral of capital payments for three loans, with the largest loan to be repaid within seven years. “The National Bank of Angola (BNA) has taken steps to address the remaining imbalances in the foreign exchange market and reduce restrictions on the formation of market prices during currency auctions. The monetary policy stance has been recalibrated to address excessive pressure on the devaluation of the Kwanza. The BNA should maintain its tighter monetary stance and be prepared, if necessary, to tighten further to support the disinflation process. “Sustainable fiscal discipline is needed to address debts. The Conservative fiscal stance is expected to continue in 2020. In order to preserve the benefits of fiscal consolidation over the medium term and reduce increased risks to debt sustainability, public authorities need to maintain measures to mobilize non-oil revenues, strengthen public financial management, improve debt management, and enhance the transparency and accountability of state-owned enterprises.
The Board`s decision provides for the immediate provision of SDR 715 million (approximately $990.7 million) to Angola. The remaining amount becomes progressively influenced over the duration of the programme and is subject to a semi-annual review. The Fund estimated that Angola`s debt ratio would continue to fall, from just over 120 percent forecast by the end of the year to 37.8 percent by the end of 2030.  The Extended Fund Facility (EFF) was established to assist the following countries: (i) with severe payment imbalances due to structural barriers; or (ii) characterized by slow growth and a inherently weak balance of payments position. It helps to support comprehensive programmes including measures of scale and nature necessary to correct structural imbalances over a longer period. Angola`s economy has been hit hard by a triple external shock induced by COVID-19….