The International Monetary Fund (IMF) has commended the new Angola administration for initiating reforms geared towards macroeconomic stability and growth that benefits all its people.
In a statement titled; Angola: The Road to Economic Reform, IMF said: “Since the election last year, the administration of President João Lourenço has started to implement policies aimed at restoring macroeconomic stability.”
The policies, the IMF added, also aimed at improving governance, including dismissing officials linked to the previous administration, launching investigations into possible misappropriation of funds at several public entities, and creating a specialised anti-corruption unit.
President Lourenço took over from the long-serving Jose Eduardo dos Santos last August, and has gradually taken a path different from the one well-trodden by his predecessor for 38 years.
He has, among other measures, replaced Mr dos Santos close associates from critical positions.
"The 2017 election of a new president has helped regain confidence in Angola's overall outlook," said the IMF statement.
“As the sub-Saharan region’s second largest oil exporter, Angola was hard hit by the decline in oil prices that started in mid-2014, the pain of which was still being felt.
"With stringent attention to needed reforms, the economy could grow modestly in 2018,” it added.
Angola is Africa's second leading oil exporter, but its nationals remain impoverished, seeing little benefit from energy revenues.
According to the United Nations, the oil sector represents 97 per cent of Angola’s exportation and 80 per cent of public revenues, and employs one per cent of the population.
Angola has a population of 26 million spread across 18 provinces and got independence from Portugal in 1975.
The dramatic drop in oil prices, the international lender said, substantially reduced Angola's tax revenues and exports, with growth coming to a halt and inflation accelerating sharply.
The scenario, IMF noted, brought to the fore the need to address vulnerabilities more forcefully and diversify the economy away from oil.
According to the IMF, Angola’s social gaps were large and widespread, including higher poverty incidence than predicted by income levels, and higher mortality rates than regional peers.
“Public spending is insufficient in critical areas like education,” the IMF noted, adding that a well-designed conditional cash transfer programme could help alleviate poverty and other social problems.