Economic activity and social conditions have been adversely affected by the intensification of the civil war. The goal is to restore domestic and external equilibrium and create the conditions for sustained growth, especially by boosting the growth of the non-oil sectors, lowering inflation to single-digit rates, improving the efficiency and transparency of public sector operations, and enhancing the role of the private sector. In March 1999, the government launched an adjustment and reform program. The authorities have made adjustments in fuel prices and electricity tariffs.
This paper discusses a request from Angola for a Stand-By-Arrangement (SBA). The requested SBA aims to support orderly policy adjustments to restore macroeconomic balances and rebuild international reserves. This program also includes a focused reform agenda aimed at medium-term structural issues on which long-term non-oil sector growth will ultimately depend. IMF staff and the authorities have agreed that, while the policy mix should consider all possible instruments geared toward achieving these objectives, fiscal policy should play the lead role in the policy package.