Luanda – The French magazine “Jeune Afrique” has recognised the progresses scored in the reforms underway in Angola since early 2018, towards the country’s macro-economic stabilisation, mainly in the banking and monetary sectors.
The recognition is contained in an article in the magazine’s April Editions, in which Jeune Afrique compares President João Lourenço’s governing challenges with Tom Cruise’s “Mission: Impossible” movie.
Among the top positive results attained, the magazine highlights the stabilisation of the Angolan currency (Kwanza), in recent weeks and the easing of the pressure on prices.
It explains that the monetary stabilisation is reflected on a Sharp fall in the differential between the official and informal exchange rates, from “a record 150%, in December 2017, down to 15% in late 2020”.
The exchange rate liberalisation is thus seen as one of the first reforms of the Lourenço era, with the transition from a fixed to a floating regime.
After that, the source stresses, the Kwanza got depreciated by almost 75% against the US dollar and the public debt rose more than 80%, with a rampant inflation of 25.1%, at the end of 2020.
The magazine considers that these “positive signs” appear in a “delicate context”, especially after the decline in Angola's rating by the “Fitch Ratings” agency.
This rating agency downgraded Angola's rating to CCC in September 2020, corresponding to extremely high-risk investment.
This classification predicted a worse scenario, with a real possibility of financial default, due to the "significant increase" in public debt and the "deterioration of public finances".
But the Angolan Executive "managed to stabilise" the macroeconomic situation, obtaining, at the same time, moratoriums from its main creditors, for the repayment of its debt, which reached a peak of 130% of the GDP, in late 2020.
According to the source, these are creditors such as the G20 and China, whose moratoriums, negotiated by the Angolan Finance minister, Vera Daves, go on until June 2021 and the end of 2022, respectively.
This easing will allow Angola to "avoid the catastrophe", offering the country "a breath of oxygen" for the next two years, underlines "Jeune Afrique".
Another key reform mentioned in the text refers to the “sanitation” of the banking sector, through the restructuring of two State-run banks on the verge of bankruptcy, namely BPC and BE, as well as the recapitalisation of other banks.
Regarding the challenges facing João Lourenço, the magazine describes him as a President who was elected under the promise of being “the man of the economic miracle”, and is now “in a race full of hurdles”.
According to the review, debt, privatisations and Covid-19 are identified as the main obstacles for João Lourenço.
The writer points out that the international community continues to support João Lourenço, particularly the International Monetary Fund (IMF), which has increased the amount of its loan to around Usd 4.5 billion.
The article argues that the international financial institution validated, at the end of 2020, two of President Lourenço's eight structural reform indicators, and acknowledged the progress made in the other six.
The rest of the institutions followed suit, with the World Bank (BM) disbursing Usd 500 million and the African Development Bank (AfDB) Usd 200 million, while Afreximbank announced close to Usd 1 million in investments in the country.
Another external factor mentioned in the article is the rise in the price of oil, observed since the beginning of the year, which has been favouring the Angolan Executive, having approached Usd 70 a barrel.
