IMF finds most of Angola's missing $32 bln

Wed Jan 25, 2012 6:57am GMT
 

By Lesley Wroughton

WASHINGTON (Reuters) - The IMF said on Tuesday a $32 billion accounting discrepancy in Angola's state funds was linked to "quasi-fiscal operations" by state oil firm Sonangol done on the government's behalf, but not recorded in official budget accounts.

The International Monetary Fund first highlighted the missing funds in Angola's fiscal accounts for 2007-10 in an October 27 report on the country's economic performance.

But during a recent IMF mission to Luanda, IMF officials were able to track most of the unaccounted $32 billion, which is equivalent to 25 percent of Angola's gross domestic product.

The Fund said the government was investigating the issue and was preparing a more comprehensive analysis together with the IMF for release later in the year.

"Preliminary data indicate that quasi-fiscal operations undertaken by the state oil company on behalf of the government, financed out of oil revenues but not recorded in the budgetary accounts, can explain a large part of the discrepancy," the IMF said in a statement.

Angola is Africa's second-largest oil producer after Nigeria. Oil revenues represent over 95 percent of the country's export income and around 45 percent of GDP.

Angolan President Jose Eduardo dos Santos' government has long been accused of mismanaging oil revenues and doing too little to fight graft in a country in which an estimated two-thirds of a population of 18 million live on less than $2 per day.

Under an IMF stand-by agreement, the Fund granted Angola a loan of $1.4 billion in 2009 to stabilize its balance of payments after an abrupt drop in net foreign reserves in 2008. The program is also intended to improve transparency in the government's accounting process.

The country's economy minister Abrahao Gourgel said on Monday the government would not request a new IMF loan when the current agreement expires at the end of the year.

"We don't intend to restore to a new line from the IMF," he told reporters on a visit to Lisbon.

Mauro Mecagni, the IMF mission chief to Angola, said in a statement that 2012 Angolan macroeconomic prospects are "broadly favorable" with new oil fields expected to boost output above 1.8 million barrels a day.

Mecagni said the outlook for Angola was sensitive to developments in world oil prices. He said the government was committed to increase its foreign reserves to cushion a possible fall in oil revenue should prices drop.

Angola's President Jose Eduardo dos Santos waves as he leaves Sao Bento Palace in Lisbon March 11, 2009.  REUTERS/Hugo Correia
 
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