OPEC member Angola has become the latest oil-producing country to seek international help to cope with the collapse in crude oil prices.
The International Monetary Fund said Wednesday it had received a request from Angola for a three-year aid program and was “ready to help Angola address the economic challenges it is currently facing.”
Under the fund’s rules, the southern African nation is eligible for a little over $500 million in assistance annually unless it receives special waivers. An IMF official said the fund expects to start discussions with Angola during next week’s spring meetings.
Angola’s move “reflects the growing stresses being felt by oil producers across the developing world that have been hit hard by a collapse in crude prices and are now struggling to plug the gaps left by dwindling revenues,” the Financial Times reported.
Countries ranging from Azerbaijan to Nigeria have in recent months been engaging in discussions with the IMF, World Bank and other multilateral institutions over how to cope with the oil price fallout.
About 75% of Angola’s government income and 95% of export revenues come from oil, and the country has been running out of cash since the slump in oil prices that began in 2014, according to CNNMoney.
“Angola, like many African oil producing nations, is not diversified enough to weather the effects of the weak oil price,” CNNMoney said.
After the 2007-2009 global financial crisis, the IMF provided Angola with a $1.4 billion emergency loan from the fund that it is still in the process of repaying. The World Bank last June approved a $650 million package of loans for Angola.
“The continuing fall in oil prices since then has meant, however, that things have become worse for Angola,” the FT said.
The IMF has predicted that the country’s oil revenues for 2015 would fall below 15% of gross domestic product, down from almost 40% in 2011. John Ashbourne, Africa economist for Capital Economics, said any aid package would have to be “hefty” with external financing needs this year alone likely to be as much as 9% of GDP.