Out-Law News | 31 Jul 2014 | 3:29 pm | 2 min. read
Bank president Donald Kaberuka said the bank would work with Angola’s finance ministry as part of a "strategic partnership" to target areas for financing, which would include a range of energy infrastructure projects.
The first disbursement under the programme will be for $600 million. The bank said it would focus on supporting Angolan government reforms for improving the “operational efficiency, competitiveness and sustainability of the energy sector, as well as in ensuring greater transparency and efficiency of public finance management”.
Kaberuka said Angola had seen “major transformations”, such as in the country’s oil sector, but “must step up its pace of reforms”.
“On the macroeconomic front, it is important to remain vigilant to ensure that gains are sustained and there is no slippage, but it's a good start. Angola still has many challenges, like other African countries, but we can work together to find solutions,” he said.
Angola’s government is making progress in economic reforms and infrastructure, with a view to developing industry, diversifying the economy, reducing dependence on oil revenues and enhancing the well-being and quality of life for citizens, Kaberuka said.
"When we talk about development of infrastructures, we are talking about energy, transport and other vital sectors of an economy,” Kaberuka said.
However, Kaberuka said reforms already undertaken had made Angola “one of the three strongest economies of the region, after Nigeria and South Africa”.
Angola became a member of the bank in 1980 and the bank started its operations in Angola three years later. The bank has invested around $500m in the country to date.
According to the bank’s power sector reform support programme for Angola (48-page / 1.84 MB PDF), published in April 2014, an estimated $23bn of investment is needed up to 2017 to implement reforms in the energy and water sector alone.
Fostering private sector participation in the power sector and enhancing transparency are among key objectives for the programme, the bank said. The power sector currently accounts for nearly $5bn per year of the national government’s public investment programme.
According to the bank, Angola is the second largest crude-oil producer in sub-Saharan Africa after Nigeria. “Angola’s economy is highly dependent on oil, which accounts for 47% of gross domestic product, over 95% of exports and nearly 80% of government revenues,” it said. The bank said the government currently plays a dominant role in the country’s oil sector through the state-owned Sonangol oil company, which is responsible for all oil-related operations in the country.
The bank said key Angolan priorities “aim to accelerate reforms associated with the oil sector and infrastructure development with a view to diversifying the economy away from hydrocarbons and reducing the country’s large income disparity”.
A 2014 World Bank report said net foreign direct investment inflows to sub-Saharan Africa (52-page / 3.78 MB PDF) increased by 16% to a near-record $43bn in 2013, driven by new oil and gas discoveries in countries in the region such as Angola.