Luanda: The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, highlighted Angola's considerable progress in recovering macroeconomic stability and rebuilding reserves. Speaking to the state-owned newspaper Jornal de Angola before her visit to the country, Kristalina Georgieva noted that the Angolan economy remains exposed to external shocks, as is the case with oil, which continues to be the pillar of the economy, adding that this also means that the country is vulnerable to the volatility of oil prices.
According to Angola Press News Agency, the fall observed in international oil prices brings to mind a memory of how important the diversification of the Angolan economy is, highlighting that fortunately, Angola is on the right track and it has already demonstrated a strong commitment to implementing reforms. The official considered that she is observing the potential to accelerate these reforms and promote greater diversification.
Regarding meetings with Angolan authorities, Kristalina Georgieva said she eagerly awaits the meetings, including with private sector leaders and representatives of civil society, to see how Angola is shaping its future. According to her, making macroeconomic adjustments is never easy, but maintaining fiscal discipline and building financial reserves helps countries cope with shocks and reduce uncertainty.
She stressed that the savings made through reforms can be used to finance social programs and expand the scope of public services, making it a matter of spending better and ensuring that every part of the national currency can benefit each citizen. Kristalina Georgieva informed that at the IMF, they have not lost sight of this objective. Since 2010, most IMF-supported programs in Sub-Saharan Africa, including Angola, have incorporated objectives aimed at protecting or increasing social spending.
She emphasized that in the case of Angola, they advocate for the need to gradually reduce fuel subsidies. She added that these subsidies are expensive, mostly benefit the wealthiest and contribute to the financing of health, education, and development. She stressed that the Angolan state spends 2.5% of its Gross Domestic Product (GDP) on energy subsidies, more than on health and education.
The IMF official informed that the financial institution knows that a gradual elimination of subsidies generates price increases, but due to experience, she considered that reductions in subsidies can be accompanied by targeted cash transfers to protect vulnerable groups. She recalls that economic diversification does not happen overnight, taking years and requiring substantial investment in infrastructure and people.
In her view, Angola's investment program is ambitious and, to maximize its impact, it is important to strengthen how projects are selected and planned. The official, who is a Bulgarian economist, defended that investment alone is not enough, stressing that diversification flourishes when reforms create an environment conducive to a growth led by the private sector.
She explained that to do this, governments must define and protect the essential elements of a dynamic market economy, such as property rights, the rule of law, robust financial sector supervision, and independent but accountable institutions. Kristalina Georgieva added that if these reforms adequate for the business sector were implemented in parallel with progress towards the implementation of the African Continental Free Trade Area, the real GDP per capita of an average African country could increase by more than 10%.
The leader of the financial institution said that Angola is advancing at a steady pace, and the government has embarked on an ambitious path of reform implementation, committed to promoting competition, simplifying business procedures, and strengthening governance and transparency. Since October 2010, she has been the leader of the world's largest financial institution. Kristalina Georgieva arrives in Luanda this Wednesday with an agenda that includes meetings with Angolan authorities, private sector leaders, and representatives of civil society.
