This week The International Monetary Fund (IMF) announced it had approved a disbursement of about $487.5 million to Angola. The organization said members of its executive board decided to allocate the funds to Angola after completing the fourth review of its $3.7 billion loan program.
Disbursement of Funds to Angola
Angola currently exports oil to different nations across the world. To continue providing this service to other nations in need of oil, Angola figured it needed some help. The nation went out in search of a $3.7 billion loan to help in the production of oil. Angola announced that because of the outbreak of the COVID-19 pandemic, oil production and exportation had been impacted. Additionally, because of the pandemic, Angola’s oil prices became weak, which affected the economy and the population.
News of Angola’s woes reached the International Monetary Fund, and the organization decided to respond to the countries pleas. The Fund stated that Angolan authorities and citizens had so far responded to the unexpected challenges like COVID-19 well. The Fund added that the Angolan government maintained a robust policy response to its problems to remain resolutely committed to the loan program. Furthermore, Angola formulated and passed a 2021 budget that excluded oil revenue gains and restrained non-essential expenditures. All the saved up funds would go to the loans program that Angola launched. According to the IMF, these and many other achievements contributed to their disbursement of $487.5 million to Angola.
Angola’s finance minister Vera Daves de Sousa told reporters that after the IMF’s first contribution, the country expected more than $700 million in the next IMF tranche. She added that the Nation would only acquire the extra $700 million only after securing three years of payment relief from Chinese creditors. Last year by September, Angola had secured a $756 million augmentation. The country received the total access augmentation under the Extended Fund Facility program, which was initially approved in December 2018.
Angola Seeking More Investors
So far, the Angolan government’s strategy to stabilize public finances and save the remainder for the project seems to be working. The strategy remains the cornerstone for the Angolan government in its mission to achieve the resuscitation of their economy. The IMF Deputy Managing Director told reporters that Angola’s government had achieved a strong fiscal adjustment in 2020 because of the strategy. The strategy also restrained the expenditure for the country while protecting priority health and social spending. Because of the tremendous achievements the approach had so far helped achieve, the IMF encouraged other nations to support Angola’s cause.
Through investments by different countries and even individuals, Angola will ramp up its oil production despite the pandemic. The Nation seeks to tap as much as 57 billion barrels of oil. It plans to use the funds it collects to find undiscovered oil reserves. But the Nation has been struggling to acquire investment as the oil industry went down. Not so many countries seem to have any interest in oil as they try to respond to the pandemic. With the recent discoveries of vaccines to cure coronavirus, Angola is optimistic that the oil industry will return to normal.