The AfDB approved a $ 165 million loan this week to fund part of Angola’s three-year program to support economic diversification aimed at restoring the country’s macroeconomic stability. The country’s government is implementing reforms to diversify its oil-dependent economy.
The country intends to restore the fiscal balance. After the economy was hit by a global drop in oil prices and repeated droughts, the Angolan government has taken steps to improve human and social development. The program aims to prioritize and promote the production and export of non-oil products and to begin to replace imports through diversification.
There are three main components to the plan: advancing fiscal consolidation through improvements in public financial management and tax reforms, accelerated implementation of the diversification program, and improving governance in natural resource management and state enterprise reform.
“The loan will contribute significantly to the government’s stabilization plan and provide a conducive environment for the private sector,” said Abdoulaye Coulibaly, director of the governance and public financial administration department of the African Development Bank. For him, the country was on the right track to reach its benchmarks for 2019.
Reforms should also improve, according to Coulibaly, the transparency of state-owned enterprises, improving their performance and reducing the need for subsidies.
In approving the loan, Board members called for the monitoring of Angola’s high public debt levels, estimated at about 90% of GDP, and projected to ease to around 60% by the end of the program period. They praised renewed efforts by the Angolan government to curb public sector corruption and step up good governance which had deteriorated.
To date, the Group has provided eight loans totaling $ 122.4 million to the country. The program is part of the Angolan government’s national development plan 2018-2022.