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© 2012 International Monetary Fund
ANGOLA
2012 ARTICLE IV CONSULTATION AND POST PROGRAM MONITORING
August 2012
Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2012 Article IV consultation with Angola, the following documents have been released and are included in this package:
Staff Report for the 2012 Article IV consultation and Post Program Monitoring, prepared by a staff team of the IMF, following discussions that ended on May 17, 2012, with the officials of Angola on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on June 28, 2012. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
Debt Sustainability Analysis prepared by the staffs of the IMF and the World Bank.
Supplementary Information update
Public Information Notice (PIN) summarizing the views of the Executive Board as expressed during its July 11, 2012 discussion of the staff report that concluded the Article IV consultation.
Statement by the Executive Director for Angola.
The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.
Copies of this report are available to the public from
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ANGOLA
STAFF REPORT FOR THE 2012 ARTICLE IV CONSULTATION AND FIRST POST PROGRAM MONITORING
June 28, 2012
Key Issues
Context: Having made considerable progress toward macroeconomic stabilization in the context of the recent SBA, the authorities are seeking to build a more resilient and diversified economy. This will require stepped-up investments in human and physical capital. Oil revenue accounts for some three-quarters of budgetary revenue and is the main driver of reserves accumulation.
Growth prospects and risks: Overall growth is projected to accelerate to 6.8 percent in 2012. Oil prices, though declining, remain higher than budgeted and oil production is projected to rebound. There are downside risks if oil prices were to decline further or if the turmoil in Europe deepens.
Focus: Discussions centered on a comprehensive medium-term fiscal framework to shield the economy and protect priority spending from volatile oil prices and production, and the unpredictability of oil revenue transfers from the state-owned oil company, Sonangol. Staff and the authorities agreed on the need to continue accumulating international reserves in light of elevated external risks and Angola’s continued dependence on oil. Building on existing efforts, discussions also focused on economic and financial policies that would lay the basis for enabling the structural transformation and diversification of the economy.
Financial sector: The FSAP noted that Angola’s financial system faces vulnerabilities given the risky domestic and external environment in which it operates. This is due to capacity constraints in banking supervision, inadequate bank corporate governance, high dollarization, and liquidity shifts linked to large oil sector transactions. Staff welcomes the initial steps taken by the authorities to address these risks and recommends that banking supervision be enhanced as a matter of priority.
Approved By
Seán Nolan and Dhaneshwar Ghura
Discussions took place in Luanda May 2-17, 2012. The staff team comprised Mr. Mecagni (head), Ms. Yackovlev, Messrs. Rosa, Weber, Dhaneshwar Ghura and Staines (Resident Representative) (all AFR), and Ms. Richmond (FAD). Mr. Saker (MCM) joined the last few days to discuss the FSAP conclusions. Mr. Conceição (OED) also participated in the discussions.
Contents
BACKGROUND
RECENT ECONOMIC DEVELOPMENTS
OUTLOOK, RISKS, AND POLICY CHALLENGES
GETTING THE POLICY MIX RIGHT
A. Fiscal Policy
B. Monetary Policy
C. Financial Sector Policy
ENABLING STRUCTURAL TRANSFORMATION
POST-PROGRAM MONITORING
STAFF APPRAISAL
TABLES
1. Main Economic Indicators, 2009–2013
2a. Fiscal Operations of the Central Government, 2009–2013
2b. Fiscal Operations of the Central Government, 2009–2013
2c. Fiscal Operations of the Central Government, 2009–2013
2d. Statement of Central Government Operations, 2007–2013 (GFSM2001)
2e. Statement of Central Government Operations, 2009–2013 (GFSM2001)
3. Monetary Accounts, 2009–2013
4. Balance of Payments, 2009–2017
5. Medium-Term Scenario, 2009–2017
6. External and Public Debt, 2009–2013
7. Indicators of Capacity to Repay the Fund, 2009–2016
8. Financial Soundness Indicators 2003–March 2012
BOX
1. The BNA’s New Monetary Policy Operational Framework
APPENDICES
I. Investing in Oil Revenue in Angola
II. Rewriting Recent Fiscal History
III. Exchange Rate Assessment
IV. Reserves Adequacy Assessment
V. Foreign Exchange System
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June 28, 2012
Approved By
Seán Nolan and Dhaneshwar Ghura
Prepared by the staff of the International Monetary Fund
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July 2, 2012
Prepared By
The African Department (in collaboration with other Departments)
CONTENTS
I. FUND RELATIONS
II. JOINT IMF-WORLD BANK MANAGEMENT ACTION PLAN
III. STATISTICAL ISSUES
IV. TABLE OF COMMON INDICATORS REQUIRED FOR SURVEILLANCE
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July 6, 2012
Approved By
Seán Nolan and Dhaneshwar Ghura
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Public Information Notice (PIN) No. 12/79
FOR IMMEDIATE RELEASE
July 16, 2012
International Monetary Fund
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