The Executive Board of the IMF concluded its consultations with Angola under Article IV of its articles of agreement on 28 October 2015 and has published a press release.

Angola’s economy has been adversely affected by the low oil price and there will be large declines in fiscal revenue and exports. Non-oil GDP growth is expected to slow to 2.1% in 2015 and the economic situation will remain challenging in 2016. Growth will remain stable at 3.5% in 2016 with the non-oil sector showing a small increase mainly driven by a stronger recovery in agriculture.

The IMF considers there is a need for rationalizing expenditure and increasing non-oil revenue. There should be efforts to reform revenue administration, streamline tax incentives and eliminate fuel subsidies. The IMF also noted that careful implementation of a value added tax (VAT) would provide Angola with a stable source of tax revenue.

The structural reform agenda of the Angolan authorities is welcomed by the IMF which considers that if it is implemented in a sustainable way this can reduce fiscal risks, promote economic diversification and support competitiveness. Priorities of the Angolan government should include promoting private investment, improving the business environment and reducing bureaucracy, streamlining the process of incorporating companies and making the labor market more flexible.