Angola faces currency test in economy shake-up
Angolan food imports amounted to more than 7.5 million Euros per day in 2017, putting pressure on the country’s net international reserves, which are at a multi-year low.
According to figures released by the governor of the National Bank of Angola (BNA) on June 29, 2018, only in the first quarter of 2018 did the country already need to import 480 million Euros in food.
“Despite a 30% drop compared to the same period in 2017, if guided simply by demand, which remains high, by the end of this year we may not be far from around 2.8 billion Euros of food imports verified in 2017,” José de Lima Massano has warned.
Angola is experiencing a deep financial, economic and foreign exchange crisis, due to a decline in oil export revenues between the end of 2014 and 2017, due to the drop in the price of crude oil in the international market.
“The awareness of our limitations must be general so that, together, we can overcome them. We still have a demand for high currencies to cover the import of goods that the country is capable of producing,” the BNA governor has cautioned.
Massano said the monthly demand for raw materials for the non-oil sector is still above 255 million Euros, but that this demand “could be met with domestic production, particularly in the sector of beverages”.
“We should look at foreign exchange as one of the tools to promote collective well-being and not as an end in itself. And it is also with this sense that one looks for a balanced and efficient format of access to the exchange market,” he said.
The information comes from preliminary data from the BNA on these reserves, which are necessary to pay for the import of food and raw materials, which in the space of a month increased in value by 1.39 billion Euros.
These reserves, in foreign currency, are now equivalent to about six months’ worth of imports into Angola, having reached the highest value since October 2017.
These reserves, which BNA has sold to commercial banks to secure the import of food, machinery and raw materials for the industry, are still less than half the value counted before the oil price crisis.
In early 2014, before the effects of the crisis, Angolan reserves amounted to 26.5 billion euros.
By Samuel PascoalSource: The Southern Times
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