By Nick Mann | 29 March 2012
The International Monetary Fund has decided to lend Angola the remaining $132.9m of a package agreed in 2009, despite calls for the money to be withheld until the country fully explains a $32bn ‘discrepancy’ in its public accounts.
Meeting in Washington DC yesterday, the IMF executive board agreed to pay the final instalment of the $1.33bn package immediately.
Earlier this week, Human Rights Watch and the Revenue Watch Institute urged the IMF not to make the loan until it received an ‘adequate’ explanation for where the $32bn went. The Angolan government has denied the money has gone missing, attributing the gap in its finances to ‘insufficient record[s] of oil revenues’.
The organisations also called for safeguards to combat corruption and mismanagement – in particular ending all off-budget revenues and spending by the state oil company, Sonangol.
But, announcing yesterday’s decision, IMF deputy managing director and acting chair Min Zhu said Angola had taken ‘decisive steps’ to improve the accountability of its public spending and predictability of oil revenue transfers.
‘They have begun to phase out quasi-fiscal operations by Sonangol, the state oil company, and incorporate them into the budget, and have established inter-agency working groups to monitor and reconcile oil revenue flows to the treasury,’ he said.
‘They are developing, with technical assistance from the Fund, a medium-term fiscal framework to improve the management of oil revenues and allow for a scaling up of public investment.’
Zhu also highlighted the government’s reforms of its monetary policy framework and said supervisory capacity at Angola’s central bank would need to be enhanced ‘as a priority’ to manage new laws affecting revenues from the oil sector.
‘Looking ahead, the authorities recognise the need to sustain the reform momentum, continue to improve governance and transparency, and enhance the business environment to lay the foundations for economic diversification and inclusive growth,’ he added.
