LUANDA (Reuters) - The IMF has approved a second tranche of a $247 million loan to be paid to Angola under its Extended Fund Facility following a review of the southern African oil producer’s progress under the program.
The multi-lateral lender announced the move late on Thursday. The International Monetary Fund originally approved the facility totalling $3.7 billion in December 2018 to help Angola manage twin budget and balance of payments crises after tanking global crude prices ripped a hole in its revenues.
Angola is Africa’s second biggest oil exporter and relies on sales of the fossil fuel for about 65% of total tax revenue, but a combination slack crude prices and years of mismanagement at state oil-producer Sonangol have left it struggling for funds.
The IMF’s Extended Fund Facility (EFF) is a loan pegged on deep structural, macroeconomic and governance reforms designed to help countries with weak economic growth and problems paying bills.
In a statement, the fund said Angola had made progress in reducing state spending and broadening economic activity outside of oil, but that the economic outlook was still uncertain and it had to do more to fight mismanagement and corruption.
“The authorities’ commitment to fiscal consolidation has been illustrated by the outperformance of the end-June 2019 non-oil primary fiscal deficit target by a wide margin,” said Tao Zhang, IMF deputy managing director and acting chairman.
“To ... mitigate the elevated risks to debt sustainability, the authorities need to persevere with measures to mobilize non-oil revenue ... and bolster transparency ... of state-owned enterprises.”
A part of President João Lourenço’s sweeping reforms is an ambitious plan to selloff key state assets, including stakes in Sonangol and more than 100 other enterprises.
Reporting by Mfuneko Toyana; Editing by Tim Cocks