Oil price-hit Angola gets $450-mln loan

LUANDA, July 3, 2015 – Africa’s second-largest oil producer has secured financial support totaling $650 million to help stabilise its economy, which has been shaken by the drop in oil prices.

The World Bank said on Wednesday that it had approved a loan of $450 million to Angola, plus $200 million in guarantees.

The deal marks the first financial aid from the lender to the African country since 2010.

“Given the current global environment, Angola needs to put in place a fiscal policy to be able to continue its efforts to diversify the economy, with greater discretionary expenditures, while protecting the poor and the most vulnerable,” the World Bank said in a statement.

The Angolan economy relies heavily on oil, which accounts for 45 percent of the country’s GDP and around 95 percent of its exports.

But as oil prices have dropped by about 40 percent over the past year, government revenues have taken a severe hit.

In February, the Angolan government made a 26-percent reduction to its budget. It plans to borrow $25 billion in 2015, according to the Ministry of Finance, with around $10 billion of this coming from foreign debt, Bloomberg reports.

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