The Angolan capital, Luanda. Picture: SUNDAY TIMES
The Angolan capital, Luanda. Picture: SUNDAY TIMES

The IMF said on Tuesday it will begin talks with Angola over providing financial support after the oil producing country’s economic growth is weaker than expected in 2018.

Africa’s second-largest oil producer has been hit by lower oil prices, which have caused a dollar liquidity squeeze. This has made it difficult for foreign firms to repatriate profits and has discouraged many from investing.

Angola’s finance ministry said on Monday it has sought financial support from the IMF but did not provide further details on how much money would be involved.

"We expect to initiate programme discussions with the Angolan authorities as soon as feasible," deputy MD of the IMF Tao Zhang said in a statement, which confirmed the fund has received a letter from the Angolan authorities to start talks.

The request came after the IMF was invited to Luanda in October to negotiate the programme, which will last for two years and then be extendable for one more.

"The IMF stands ready to help the authorities address Angola’s economic challenges by supporting their economic policies and reforms based on the government’s macroeconomic stabilisation programme and in the national development plan for 2018-22," Zhang said.

Angola’s economy has struggled because of lower oil prices, a situation made worse by declining production. Output is expected to fall to 1.5-million barrels per day in 2018, from 1.6-million in 2017 and 1.9-million a decade ago.

The IMF expects the country’s economy to grow 2.2% in 2018, well below an original government forecast of 4.9%.

President João Lourenço, who took over in 2017 after 38 years of rule by José Eduardo dos Santos, has said he wants to bring about an economic miracle in Angola by opening up to foreign investment and diversifying away from oil.

Reuters

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