The budgetary difficulties Angola is facing are an opportunity for the government to accelerate the implementation of reforms, said the analyst from Standard and Poor’s (S & P) who was the lead author of the February report that reduced Angola’s credit rating.
Benjamin Young told Portuguese news agency Lusa that the present difficulties may lead to structural changes on the expenditure side and added that the work of the Angolan authorities with the International Monetary Fund in the reform of subsidies, including fuel, “is an example of that.”
Young also said that S&P “believes that the success of this type of fiscal measure [the reform of fuel subsidies] will increase the government’s ability to support plans for economic diversification.”
The balance of public finances has been one of the Angolan government’s concerns, which provides for a budget deficit of 7 percent of GDP against 7.6 percent initially forecast and reduced the growth forecast for the economy from 9.7 percent to 6.6 percent, which is still more favourable than either the IMF or World Bank forecasts.
Faced with falling tax revenues, the government of Angola has taken out loans from various entities, in excess of US$2 billion, ranging from the World Bank to South Africa’s Standard Chartered Bank, and including Goldman Sachs and Gemcorp. (macauhub/AO)