ANGOLA – The International Monetary Fund (IMF) executive board has approved the disbursement of US$488 million to Angola, just four months after the lender increased the loan size by almost a quarter to US$4.5 billion, to help Angola survive the effects of the global COVID-19 pandemic.
The three-year Extended Fund Facility (EFF), which began in 2018, aims to overhaul the country’s economy with reforms to reduce its dependence on oil and lower its debt burden.
Last year, a sharp drop in crude prices, stemming from the pandemic, forced Angola to seek debt relief worth US$6.2 billion from three key creditors, easing fears of a default in one of Africa’s most indebted countries.
It also secured a temporary waiver of US$1.78 billion in bilateral debt-service payments from the Group of 20 leading economies.
‘’Angola’s gross domestic product will grow 3.2% in 2021, after contracting for five straight years’’
Chinese creditors have already granted Angola a three-year debt relief, enabling the country to get more than US$700 million in its next tranche of IMF (International Monetary Fund) financing in the coming days, its finance minister said on Monday.
The US$700 million forms part of a US$3.7 billion programme under the IMF’s Extended Fund Facility approved in December 2018.
According to analysts’ estimates, Angola owes more than US$20 billion to a number of Chinese entities which includes US$14.5 billion to the China Development Bank and close to US$5 billion to the Export-Import Bank of China and has also borrowed from ICBC, China’s largest lender.
The country’s is also part of the G20 group’s Debt Service Suspension Initiative (DSSI), which since April has helped 46 countries defer US$5.7 billion in 2020 debt-service payments.
That initiative was recently extended until the end of June.
In 2019, the country received US$3.7 billion in loans from the IMF with the debt-to-GDP above 100%, and debt repayment eating US$9 billion annually.