LUANDA, Aug 8 – Angola is to begin negotiations with the International Monetary Fund (IMF) on a financing programme to help it cope with the global economic slowdown, it was announced Friday.
Lamin Leigh, IMF Mission Chief for Angola, said in a statement that the Fund had held productive talks with government, financial institutions and key donors during a week-long visit to the country.
The parties agreed the IMF mission would return to Luanda in September "to conduct program negotiations with a view to pave the way for the IMF to help Angola weather the impact of the global slowdown on its economy."
Relations between Angola and the IMF have been strained since the end of the civil war in 2002 and the IMF has been critical of Luanda\’s management of its oil revenues.
But following a meeting between President Jose Eduardo Dos Santos and IMF head Dominique Strauss-Kahn at the Group of 8 summit in Italy in July, the Fund was invited to Angola to assess the impact of the global financial crisis.
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 two dollars a day.
IMF talks with Angola on an economic support programme broke off in 2007, as the country was then enjoying rapid growth on the back of high oil prices.
However, the global economic crisis and the fall in oil at the end of 2008 seriously dented Angola’s earning, with foreign reserves falling by 30 percent in the first six months of this year.
Previous government growth expectations of 11.8 percent have been revised down to 6.2 percent and last week the country’s budget was cut from 3.1 trillion kwanzas (around 40 billion dollars) to 2.6 trillion kwanzas to factor in lower oil revenues, which account for more than 90 percent of Angola’s earnings.