Luanda Aug.19 (ANGOP) – The International Finance Corporation (IFC) has commended the ongoing reforms in Angola since the inauguration of the Government led by President João Lourenço in September 2017.
The recognition is expressed in a study entitled “Diagnosis of the country’s Private Sector. Market Creation in Angola”, a document prepared by IFC, a subsidiary and member of the World Bank.
The country’s Private Sector Diagnosis (CPSD) identifies opportunities to stimulate economic growth and sustainable development by harnessing the power of the private sector in Angola.
In the 90-page diagnosis, the International Finance Corporation classifies the former Government of then President José Eduardo dos Santos as “nepotist” and generator of “poor policies”.
IFC notes that the current Government’s Macroeconomic Stabilization Program has introduced measures to strengthen fiscal stability, reduce inflation, increase exchange rate flexibility and gradually lower debt levels.
“The private sector is starting from a low base. It has suffered from decades of state intervention, nepotism and poor policies. Angola’s growth over the past 50 years has been driven by public spending, ”says the publication.
The text adds that the contribution of private capital to growth has historically been « very low, » in contrast to the rest of sub-Saharan Africa, where private investment has played a larger role in the economy.“
The contribution of private capital to growth (in Angola) declined over time and was negative between 1996-2014,” writes IFC.
The publication states that the presence of underperforming Public Enterprises (PEs) in productive sectors and, more generally, the dominance of policy-related interests has not led to the expected diversification of the economy.
The document also highlights that the oil price crisis has also led to double deficits in current and fiscal accounts from 2014 onwards.
“Government debt has doubled over the past four years, while inflation has soared to over 40 percent in December 2016, exposing significant macro-financial risks,” reads the publication.
As for employment, the IFC indicates that changes in the economy during the boom years were not very favorable for the emergence of jobs, which were created mostly in consumer sectors and government.
A subsidiary and member of the World Bank Group, IFC is the largest private-sector global development institution in emerging markets. It works with over 2,000 companies around the world, using its capital, experience and influence to create markets and opportunities in the toughest areas of the world.
In fiscal 2018, the institution invested more than USD 23 billion in long-term financing in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.