Angola needs to cut its spending to match falling oil sales revenue after the crude price drop, the Central Bank Governor told Angola National State Radio (RNA) on Tuesday.
Jose Pedro de Morais told RNA that Angola needed to adjust the parameters of the economy and the availability of money in foreign currency to end its currency crisis.
A sharp decline in oil prices has sapped Angola’s dollar inflows, dented the local kwanza currency, hammered public finances and prompted heavy government borrowing.
“When an individual is poor, it adjusts its consumption pattern to the new level of income that you have. We need to adjust our consumption pattern. We need to find other sources of economic growth,” he said.
The International Monetary Fund said in August the Angolan economic growth is likely to slow to an average of 3.5 percent a year between 2015 and 2016 from about 4 percent last year as weaker oil prices bite.
Oil output represents 40 percent of gross domestic product and over 95 percent of export revenue.
De Morais said Angola continues to get financing from international creditors because it is still seen as a viable investment destination despite oil price movements.
“We are a country viable and the donors are not stupid, they know that our potential is very great,” he said.
“We are focused on resolving the problem of structural adjustment of the economy in relation to these shocks in the price of oil.”
Angola’s central bank devalued the kwanza by 6 percent against the dollar in June and has twice raised interest rates due to falling oil prices.