The International Monetary Fund is is set to begin loan negotiations with Angola on a three-year credit facility.
This follows the global decline of crude prices that has hammered the finances of Africa’s second largest oil exporter.
We have received a formal request from the Angolan authorities to initiate discussions on an economic programme that could be supported by financial assistance from the IMF.
“We have received a formal request from the Angolan authorities to initiate discussions on an economic programme that could be supported by financial assistance from the IMF,” the fund said in a statement.
The IMF further added that the plummeting oil prices since mid 2014 has presented a major challenge for oil exporters especially for economies that are yet to become diversified.
The fund will help Angola address its current economic challenges by supporting a comprehensive policy package to speed up the diversification of the country’s economy while safeguarding macroeconomic and financial stability.
Angola’s economy has experienced rapid economic growth since the end of a 27-year civil war in 2002, peaking at about 12 percent in 2013.
But the sharp decline in oil prices has lessened dollar inflows while the Kwanza has slid almost 18% to the dollar this year prompting heavy government borrowing.
With Angola’s government relying on the oil industry for about 95 percent of export income, economic growth slowed to 3.5 percent last year from 6.8 percent in 2013, according to the IMF.
The IMF’s extended fund facility program is designed for countries with balance of payments issues and slow growth or structural impediments.
Under normal access, it allows a member country to borrow up to 145 percent of its quota share in the fund annually.