Angola sidesteps IMF's transparency concerns as oil money pours in

Mar 21, 2007 01:00 AM

A jumble of multi-billion dollar projects to rebuild Angola's devastated roads, airports and administrative buildings are part of a post-war reconstruction boom that is changing the face of the country. Much of the development has been dependent on oil-backed commercial credit agreements from countries such as China. But these loans tend to be larger, more expensive and less restrictive than money Angola could potentially receive from the International Monetary Fund (IMF) or other donors.
Now oil-rich Angola has distanced itself further from the IMF by announcing it had succeeded in repaying much of its $ 2.3 bn debt to the Paris Club, an informal group of the world's richest countries which provides financial services to indebted countries, without the Fund's help.

Angola had been in discussions with the IMF over settling the Paris Club debt, but finance minister Jose Pedro de Morais told that Angola had succeeded in bilaterally paying off most of its obligations, which he said meant "the programme with the Fund is no longer an issue because the bulk of the financial effort was done".
"We get technical assistance and we get their technical advice; we do not need to get their money," he added.

Relations between the IMF and Angola -- sub-Saharan Africa's second biggest crude producer after Nigeria -- have been rocky for years. A programme with the Fund would require Angola to be more transparent about how it spends its money. Analysts say that Angola's windfall oil profits have strengthened its hand.
"They weren't begging for relief, so nobody had any major leverage over them," explained Nicholas Shaxson, Africa expert at the London-based Chatham House. "This is [like] going to the bank manager and saying 'here's all the money' [so now you] don't have to do those things that might not be to your taste," he added.

Despite economic growth estimated at 31 % this year, and the huge credit facilities at the disposal of the government, most of Angola's population of over 13 mm continue to live on less than $ 2 a day, amid allegations of widespread corruption by the country's elite. One in four children do not make it to their fifth birthday and many observers stress Angola should be spending a lot more on health and education.
De Morais said Angola's performance in terms of transparency was "much better" today than it had been some years ago. He said that no public spending was made outside the budget and added that the allocation of its lucrative oil producing blocks now adhered to international standards and were open to public scrutiny.

But Angola had shown the world that it was financially independent and was therefore not prepared to be told what to do by external organisations, De Morais commented.
"For political reasons, we have been judged not to adhere to those international initiatives like EITI [Extractive Industries Transparency Initiative]," he added. The EITI scheme supports improved governance and poverty reduction in resource-rich countries.

De Morais said the Angolan context could not be compared to that of some countries whose budgets were 80 % financed by the international community and for whom compliance with "international concerns and policy recommendations" were their only means of survival.
"We are not against those who have to calibrate their policies with those of the international community because this is in their best interest," he said. "[But] we find and can conceive and implement our own policies and this is in the best interests of ourselves and our people. What we find unfair is that because of these choices we are called non-transparent, corrupt, whatever," he added.

This report does not necessarily reflect the views of the United Nations.

Source: UN Integrated Regional Information Networks
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