WASHINGTON – Angola’s economic prospects this year “remain favorable” despite a recent easing in global oil prices, the International Monetary Fund said on Monday, and called on the government to improve the transparency of how it manages its oil profits.
“The pace of economic activity is expected to accelerate, with overall growth close to 7 percent as oil production rebounds,” the IMF said in its annual review of the Angolan economy.
More specifically, the IMF forecast that growth in Africa’s second-largest oil producer will increase to 6.8 percent in 2012, from 3.9 percent last year, as the economy recovers from a lower oil production in 2011 due to technical problems.
The IMF said growth should ease to 5 percent next year.
Global oil prices have rebounded recently just above $100 a barrel amid increased concerns of supply disruptions from Iran and the North Sea. However, they are not expected to hit the record levels seen last year due to an expected slowdown in global growth.
The IMF said the economy should also be lifted this year by increased government spending in the energy, transportation and construction sectors. Agricultural production is being hampered by a drought, which is pushing up domestic food prices, the IMF added.
“Although Angola’s growth outlook is favorable, the country remains vulnerable to oil revenue shocks, a large infrastructure gap persists, and poverty remains widespread,” the IMF cautioned.
It called on the government to improve transparency and management of the country’s oil revenues, including by setting “clear rules” for the use of money from the country’s oil infrastructure fund.
The IMF called on the government to ensure that so-called quasi-fiscal operations – or hidden expenditures – of Angola’s state-owned oil company Sonangol be phased out and conducted through the budget.
Human Rights Watch in December urged the government to account for more than $30 billion in missing government funds, thought to be linked to Sonangol, which were spent or transferred between 2007 and 2010.