The loan will be paid out in a number of disbursements over the next three years subject to semi-annual reviews by the fund. The first payment of $990.7m will be made immediately to kick activities off.
The programme will help improve governance, strengthen fiscal sustainability and increase non-oil revenue by introducing a value added tax and eliminating subsidies.
Tao Zhang, deputy managing director and acting chair of the IMF’s executive board, said the Angolan government also intended to fight corruption.
“Protecting the poor and most vulnerable is an important element of the programme. In this regard, the sequencing of reforms and putting in place off-setting measures will be important,” he said.
“Strengthening public financial management will improve the allocation of scarce public resources and strengthen policy formulation and implementation.”
The south-central African country’s oil revenues declined from 23.8% of GDP in 2014 to 8.2% of GDP in 2016, according to the World Bank figure. According to the bank, there has been a small rebound in oil revenues and they estimated climb back to 10% in 2018.
Non-oil revenues also went down despite measures to improve tax collection, from 9.1% of GDP in 2014 to 6.8% of GDP in 2017.
Angola continues to face development challenges, which include reducing its dependency on oil and diversifying the economy, despite progress made since the end of the war in 2002. The World Bank also highlighted that the country still needs to improve its public institutions, governance and public financial management systems.
Zhang said: “Structural reforms under the programme will aim to diversify the economy to reduce fiscal risks and foster private sector development.
“[The reforms] will include restructuring state-owned enterprises and improving the business climate, strengthening economic governance, and continuing to fight corruption.”
The programme will also reduce the risks associated with state-owned enterprises and improve access to finance for businesses, which will be help boost private-sector-led economic growth, the fund said in a statement this weekend.
