Angola says foreign credit growing

LUANDA – Angola has received US$5,5 billion in foreign loans since 2002 with China providing more than half of the total – and more is on its way, a Finance Ministry spokesman said on Monday.

“US$5,5 billion has already been received since the peace accord in mid-2002,” said spokesman Bastos de Almeida. “We are expecting more in the future, principally from Spain, Germany and Japan – we don’t have figures at the moment but unlike before these new loans will not be paid for with oil.”Angola is sub-Saharan Africa’s second largest oil exporter after Nigeria, pumping 1,3 million barrels a day (b/d) – a figure which the government expects will rise to two million b/d by 2008.The country is experiencing a petrodollar funded reconstruction boom after a devastating 27-year civil war ended in 2002.Angola’s government coffers have also seen a huge rise in external credit recently which has been a primary factor in the government’s bumper 2006 budget of around US$25 billion compared to just US$13 billion in 2005 – much of which is earmarked for rebuilding its shattered infrastructure.Although the country still has US$9,5 billion in external debt, Finance Minister Jose Pedro de Morais said in presenting the 2006 budget that finance from foreign credit lines would rise from US$800 million in 2005 to US$5 billion in 2006, including US$3 billion in oil-backed credit lines from China’s Eximbank.Portugal is the latest country to offer foreign credit after it announced the provision of a 300 million euro loan earlier this month.But Angola has also come under fire for its use of foreign credit, particularly from the International Monetary Fund (IMF) and civil society organisations which criticise the loans as lacking transparency.”New foreign lending, especially Chinese, has allowed …Angola’s government to manage on its own without IMF backing.Angola has used its huge economic potential to secure a number of oil-backed bilateral credit agreements with foreign governments – notably Portugal, Brazil, Spain, China and India, which further weaken the IMF’s leverage,” said Nick Shaxson, Angola specialist at the UK’s International Institute of Foreign Affairs.Speaking at the end of last week, Deputy Finance Minister Severim de Morais said that peace and good economic growth had allowed Angola access to foreign credit.In particular, de Morais singled out the country’s low rate of inflation, projected at 10 per cent this year, the lowest level since independence in 1975, down from 18 per cent the previous year and 116 per cent in 2002.Angola’s growth for 2006 is predicted at 27,6 per cent, according to the International Monetary Fund (IMF) – one of the fastest rates of economic growth in the world – compared to 14,7 per cent in 2005.- Nampa-Reuters”We are expecting more in the future, principally from Spain, Germany and Japan – we don’t have figures at the moment but unlike before these new loans will not be paid for with oil.”Angola is sub-Saharan Africa’s second largest oil exporter after Nigeria, pumping 1,3 million barrels a day (b/d) – a figure which the government expects will rise to two million b/d by 2008.The country is experiencing a petrodollar funded reconstruction boom after a devastating 27-year civil war ended in 2002.Angola’s government coffers have also seen a huge rise in external credit recently which has been a primary factor in the government’s bumper 2006 budget of around US$25 billion compared to just US$13 billion in 2005 – much of which is earmarked for rebuilding its shattered infrastructure.Although the country still has US$9,5 billion in external debt, Finance Minister Jose Pedro de Morais said in presenting the 2006 budget that finance from foreign credit lines would rise from US$800 million in 2005 to US$5 billion in 2006, including US$3 billion in oil-backed credit lines from China’s Eximbank.Portugal is the latest country to offer foreign credit after it announced the provision of a 300 million euro loan earlier this month.But Angola has also come under fire for its use of foreign credit, particularly from the International Monetary Fund (IMF) and civil society organisations which criticise the loans as lacking transparency.”New foreign lending, especially Chinese, has allowed …Angola’s government to manage on its own without IMF backing.Angola has used its huge economic potential to secure a number of oil-backed bilateral credit agreements with foreign governments – notably Portugal, Brazil, Spain, China and India, which further weaken the IMF’s leverage,” said Nick Shaxson, Angola specialist at the UK’s International Institute of Foreign Affairs.Speaking at the end of last week, Deputy Finance Minister Severim de Morais said that peace and good economic growth had allowed Angola access to foreign credit.In particular, de Morais singled out the country’s low rate of inflation, projected at 10 per cent this year, the lowest level since independence in 1975, down from 18 per cent the previous year and 116 per cent in 2002.Angola’s growth for 2006 is predicted at 27,6 per cent, according to the International Monetary Fund (IMF) – one of the fastest rates of economic growth in the world – compared to 14,7 per cent in 2005.- Nampa-Reuters