The postponement of the IMF decision on strengthening the loan to Angola will aggravate the Treasury's liquidity problems and put pressure on currencies that are at the lowest level of 2020, according to a note from the BFA.
According to Bloomberg, the International Monetary Fund (IMF) decided to postpone the third evaluation of the Expanded Financing Program, at least until the second half of August, a “very damaging” postponement, says a note from the Economic Studies Office of Banco de Fomento Angola, to which Lusa had access.
“This is a very damaging postponement for the country, since the unblocking of this evaluation could bring about 800 million dollars in budgetary financing (including 350 million resulting from an extension of the loan), and in foreign currency, also providing foreign exchange to the country ”, the document emphasizes.
At issue should be issues related to debt default agreements with creditors, the note said.
Angola has already reached an agreement with one of its creditors and plans to join the initiative to suspend payments of bilateral debt to G20 members, but there are still negotiations underway with two other creditors, according to the Minister of Finance.
“The IMF decision may condition the decision of other multilateral agencies, such as the World Bank, which is also expected to disburse budget support this year (the estimated amount was US $ 500 million, which could also be extended)”, BFA analysts estimate.
According to the information note, the delay in this budget support therefore aggravates the Treasury's liquidity issues.
In addition, the delay in the entry of foreign currency “prevents the relief of some existing pressure for depreciation in the foreign exchange market”, at a time when the currencies from oil revenues will be at the lowest level of 2020.
Bloomberg reported that the meeting, which was scheduled for Thursday, will take place as soon as the executive board returns from its vacation in the second half of August, a postponement that allows IMF “more time to work with the authorities” in Angola.
During this week, the Angolan Secretary of State for Finance, Osvaldo João, pointed out that the country has “a slack” of around 800 million dollars (680 million euros, at the current exchange rate) in the IMF plan.
“During the approval of the program, in 2018, we only obtained financing of US $ 3.7 billion (3.15 billion euros, at the current exchange rate). This means that the disbursements that were being made until the second evaluation took into account a total ceiling of US $ 3.7 billion, which means that we have a gap of around US $ 800 million that we we can access whenever we want ”, said Osvaldo João, during a conference lunch held on July 27th.
The revised OGE 2020, estimated at 13.4 billion kwanzas (20.3 billion euros), foresees a 4% deficit to the 15 billion kwanzas (22.6 billion euros) of the previous proposal and with a price oil barrel average of US $ 33 (30 euros).
The first version had been prepared based on an average price of $ 55 a barrel of oil, an average daily production of 1,436,900 barrels and an inflation rate of 25 percent.
Due to the covid-19 pandemic, there was a reduction in the price of a barrel of oil, which led the Member States of the Organization of the Petroleum Exporting Countries and their partners to reduce production in order to balance the price of oil. barrel of oil.
RCR (JYO) // VM