ORSB – ANGOLA COUNTRY STRATEGY PAPER 2011 - 2015
ANNEX 5 – IMF Stand-by Arrangement Policies and Objectives for 2010
Box 1: SBA Macroeconomic Policies and Objectives for 2010
The macroeconomic program aims to rebuild reserves, increase confidence in the kwanza and
restore a sustainable macroeconomic position
Fiscal policy and addressing underlying weaknesses in public finances:
•
The government will aim to reduce the non-oil primary fiscal balance deficit to about 41
percent of non-oil GDP in 2011
•
On the expenditure side, the 2010 budget will aim for a reduction of 6 percentage points of
GDP. It will maintain social spending at about 30 percent of total public spending, and reduce
domestic arrears
•
The GoA committes to strengthening debt management capacity, and to reduce the external
non-concessional credit to a limit of US$2 billion
•
To de-link the fiscal stance from unpredictable oil revenues establish a stabilization and a
savings fund, through the creation of Angola Sovereign Wealth Fund
•
Approve a Fiscal Responsibility Law to guard against pro-cyclical fiscal policy
•
Reform the tax system towards simplifying the tax system and reducing the already large
informal sector and tax evasion
•
Reform the public finance management (PFM) system consistent with the recommendations
of the 2006 IMF fiscal ROSC
•
Gradually phase out the quasi-fiscal activities of Sonangol and other state-owned enterprises
(SOEs). Also, the GoA will publish Sonangol’s audited financial statements for 2007 and 2008
and adopt this as part of normal standard practice.ure
Normalizing the foreign exchange market backed by prudent monetary management
•
Normalize functioning of the foreign exchange market, with a market-based auction system.
Streamline its foreign exchange intervention strategy.
•
BNA will continue to maintain a tight monetary policy stance under the principle of sterilizing
the dollar revenues. To support exchange rate policy, the BNA will increase its policy rate so
market interest rates rise.
•
The government will also use prudent domestic debt management to limit the drawdown of its
deposit at the BNA thereby support international reserves. Reserves targets are about 3.2
months of import cover in 2010, and about 3.8 months in 2011.
•
The Treasury will issue securities for its domestic financing of the government deficit. In case
of a shortfall in market financing, will drawdown its deposits at the BNA.
•
During the program period the GoA will not intensify or introduce any exchange restrictions or
multiple currency practices that are not consistent with the obligations under Article VIII
section 2(a) and 3
Strengthening the financial sector
The BNA will reinforce its guidance to banks on maintaining adequate levels of capital and
provisioning to cover credit risk.
•
BNA will review its regulatory and supervisory framework. to strengthening its oversight of the
financial sector, including its risk-based bank supervision, with the enactment of prudential
rules that appropriately reflect the balance sheet risks of foreign currency lending.
•
Source: IMF memorandum of economic and financial policies for 2010 under the first year program of the SBA.
19