Country turns to IMF for help amidst financial crisis

sQuashie

April 8, 2016 2:41 PM

Much of Angola’s poor have been relatively untouched despite years of economic growth from oil and the country holds an unenviable place as one of the most unequal countries in the world.

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The southern African country has been hit hard following a significant drop in oil prices for over a year. Angola is the second largest oil producer in Africa, behind Nigeria, and is incredibly dependent on oil for export revenue.

According to the IMF, oil forms about 95% of the country’s exports and about 75% of fiscal revenue.

Acknowledging receipt of the request, Min Zhu, the Deputy Managing Director of the IMF said “the sharp decline in oil prices since mid-2014 represents a major challenge for oil exporters, especially for those economies that have yet to become more diversified.”

The Economies of Organization of Petroleum Exporting Countries (OPEC) such Nigeria, Russia, Saudi Arabia and Venezuela have also been reeling from the effects of the seemingly unprofitable mineral.

In 2015, Ghana (an emerging oil producer) went to the IMF to secure a loan facility to help boost an economy that had seen its currency drop and overall productivity slump on the back a crippling power crisis, resulting in a loss of investor confidence.

Conditions accompanied by IMF assistance are very tough and usually require governments to institute some cost cutting measures such as freezing government employment.

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