Angola Says It’s ‘Totally Committed’ to Fighting Inflation
(Bloomberg) — Angola’s central bank is “totally committed” to reining in stubbornly high inflation as the government tries to increase local production to reduce the nation’s dependence on imports, Finance Minister Vera Daves de Sousa said.
The annual inflation rate in the net importer surged to a 17-month high of 20% in December from 18.2% the previous month. Angola’s central bank raised its key interest rate by a percentage point to 18% in November, the first increase in more than two years. Governor Manuel Tiago Dias will hold a press conference on Friday following a two-day meeting of the monetary policy committee.
“The central bank is taking necessary actions by managing the liquidity in the system and also increasing to some extent the interest rates,” Daves de Sousa said in an interview with Bloomberg TV at the World Economic Forum in Davos on Wednesday. “The government is also participating in this process with structural measures that are related with diversification of our economy.”
Unofficial Inflation
Inflationary pressures in Africa’s second-biggest oil producer intensified last year after the government briefly stopped defending the kwanza in May and cut gasoline subsidies a month later, which almost doubled pump prices that had been among the cheapest in the world. The kwanza has lost about 39% of its value against the dollar over the past 12 months, according to data compiled by Bloomberg.
Unofficial estimates suggest that headline inflation in Angola is already over 30% and climbing, the Famine Early Warning Systems Network, a Washington-based group also known as Fews Net, said in a report on its website.
Officials at Angola’s National Statistics Institute, which publishes official data on inflation, weren’t immediately available to comment by phone.
Asked when she expected inflation to ease in Angola, Daves de Sousa replied: “We need to see what will be the trend in the first quarter.”
OPEC Exit
Angola’s first female finance minister reiterated her government’s economic-growth forecast of 2.8% for 2024 compared with “very shy growth” last year. She expects the non-oil sector to be the main driver as the country invests in industries such as farming to boost local production.
At the same time, Angola also needs to raise oil production, which accounts for more than 90% of the country’s exports, said Daves de Sousa. She defended Angola’s decision last year to quit the Organization of Petroleum Exporting Countries in order to “have freedom to take advantage” of investments that are being made in the oil sector.
“That decision was carefully considered,” she said. “Despite all the efforts that we are putting in place to diversify the economy, we understand that we need at the same time to take the best advantage from the oil sector.”
–With assistance from Candido Mendes and Matthew Hill.
(Updates with a report on unofficial inflation estimates in Angola in fifth paragraph)
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