Angola expects April inflation to be lowest in 18 months

PUBLISHED: Fri, 06 May 2022 11:44:43 GMT
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JOHANNESBURG, May 5 (Reuters) – Angola is expecting to record its lowest rate of inflation in 18 months when April data is released, the oil-producing Southern African country’s central bank governor said on Thursday, while economic growth was estimated at over 2% in the first quarter.

While price pressures are rising sharply worldwide driven by spikes in food and energy prices, Jose De Lima Massano told a Reuters on-line event that inflation had been falling since the start of this year. He said he expected inflation and the GDP growth rate trends to continue throughout the year.

Angola has suffered from double digit inflation since mid-2015, with the headline number coming in at 27% year-on-year in March.

Analysts have warned that rising global food prices are a concern for consumers’ pockets, given Angola’s dependence on imported food, but also point to the strength of the kwanza currency which could give some reprieve.

Under President João Lourenço, who took office in 2017, the former socialist state is implementing a broad strategy to modernise its economy that includes widespread privatisation of state-owned assets.

BAI, Angola’s largest private bank, plans to list a 10% stake currently held by state oil company Sonangol via an initial public offering (IPO) on the country’s BODIVA stock exchange in June.

“Our expectation is that at least another two banks will do it in a very short period of time and then we will see other sectors are going to come,” De Lima Massano said, adding that one bank was likely to list this year.

“We are very happy with this development. This is a very good sign on how good the banking sector in Angola is,” he added.

Sonangol, diamond miner Endiama and airline TAAG are also slated for partial privatisation, though the process for selling those stakes is expected to take longer. Read full story

Asked whether the government planned to request from China an extension to a debt moratorium, the governor said this was the decision of the finance ministry, adding though that he was not anticipating any changes to the current arrangements.

“My perception is there is room just to get back to normality,” he said.

Africa’s second-largest oil exporter and the continent’s biggest recipient of Chinese lending over the past two decades had previously sought payment relief from Beijing.

It announced in early 2021 that it had secured a three-year reprieve from Chinese lenders, to whom Angola owed more than $20 billion at the time.

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