Press Release No. 12/109

Press Release: IMF Executive Board Completes Sixth and Final Review Under Stand-By Arrangement with Angola and Approves Final US$ 132.9 Million Disbursement

March 28, 2012

The Executive Board of the International Monetary Fund (IMF) today completed the sixth and final review under the Stand-By Arrangement for Angola. Completion of the review makes immediately available the final disbursement equivalent to SDR 85.89 million (about US$ 132.9 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 858.99 million (about US$ 1.33 billion)—which is the full amount that was approved in November 2009 (see Press Release No. 09/425).

In completing the program review, the Executive Board approved waivers for non-observance of the end-September 2011 quantitative performance criteria on net international reserves of the National Bank of Angola (BNA), net domestic credit of the BNA, and net credit to the government by the banking system.

The 27-month program, originally scheduled to expire in February 2012, was extended on February 8, 2012 to allow time for the completion of the sixth and final review (see Press Release No. 12/42).

Angola has been a member of the IMF since 1989 and has a quota in the Fund of SDR 286.3 million (about US$ 442.9 million).

Following the Executive Board’s discussion of Angola, Mr. Min Zhu, Deputy Managing Director and Acting Chair, made the following statement:

“The Angolan authorities should be commended for successfully completing the Stand-By Arrangement and achieving their overarching objective of restoring macroeconomic stability. They undertook a significant fiscal adjustment, settled large domestic arrears, rebuilt foreign reserves, stabilized the exchange rate, and reduced inflation.

“The authorities have taken decisive steps toward enhancing accountability in public spending and predictability of oil revenue transfers. They have begun to phase out quasi-fiscal operations by Sonangol, the state oil company, and incorporating them into the budget, and have established inter-agency working groups to monitor and reconcile oil revenue flows to the treasury. 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.

“The authorities are implementing reforms to their monetary policy framework. Supervisory capacity at the central bank will need to be enhanced as a priority to carefully manage the implementation of the new foreign exchange law for the oil sector. The success of de-dollarization efforts will depend on sustained implementation of sound macroeconomic policies, continued progress in reducing inflation, and development of kwanza-denominated saving instruments.

“Looking ahead, the authorities recognize 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,” Mr. Zhu added.