IMF formally approves US$1.4b for Angola
Posted: 24 November 2009 0720 hrs

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WASHINGTON: The International Monetary Fund said on Monday that it gave final approval to a loan of US$1.4 billion to help Angola cope with the drop in global oil prices and other effects of the global crisis.

"The IMF-supported economic program approved aims to restore macroeconomic balances and rebuild international reserves," the multilateral lender said in a statement announcing the 27-month standby loan.

"While the immediate goal is to mitigate the repercussions of the adverse terms of trade shocks linked to the global crisis, the program also includes a reform agenda aimed at medium-term structural issues to foster the non-oil sector growth."

IMF deputy managing director Takatoshi Kato commended Angolan authorities "for their strong commitment to a comprehensive reform program that addresses the macroeconomic imbalances which emerged in the face of the global economic crisis."

He said the IMF aid program "includes a determined effort to restrain public expenditures, while providing adequate resources for social spending and vital infrastructure projects."

"The authorities are committed to take further steps to improve fiscal management over the medium-term, increase non-oil revenues by reforming the tax system, and de-link the fiscal stance from short-term movements in oil revenues," the IMF official added.

Angola had been seeking its first aid from the IMF since the end of the country's 27-year civil war.

Officials in the African nation had said the finance would help the oil-rich southern African country to alleviate its liquidity pressures caused by the fall in oil prices.

Relations between Angola and the IMF have been strained since the end of the civil war in 2002, with the IMF being critical of Angola's management of its oil revenues.

Angola vies with Nigeria as the largest oil producer in Africa but is struggling to overcome a high poverty rate, with two thirds of the population living on less than US$2 a day.

- AFP/sc