The International Monetary Fund (IMF) said on Tuesday it would begin talks with Angola over providing financial support after the oil producing country’s economic growth was weaker than expected this year.
Africa’s second-largest oil producer has been hit by lower oil prices, which have caused a dollar liquidity squeeze that has made it difficult for foreign companies to repatriate profits and discouraged many from investing.
Angola’s Finance Ministry said on Monday it had sought financial support from the IMF but did not provide further detail on how much money was involved.
“We expect to initiate program discussions with the Angolan authorities as soon as feasible,” Deputy Managing Director of the IMF Tao Zhang said in a statement which confirmed the Fund had 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 program, which would 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 stabilization program and in the national development plan for 2018–22,” Zhang said.
Angola’s economy has struggled due to lower oil prices, a situation made worse by declining production. Output is expected to fall to 1.5 million barrels per day in 2018, down from 1.6 million last year and 1.9 million a decade ago.
The IMF expects the country’s economy to grow 2.2 percent this year, well below an original government forecast of 4.9 percent.
President João Lourenço, who took over last September 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.