IMF told to keep its money, but help needed with old debts

Oil-rich Angola is ready to enter into a programme with the International Monetary Fund (IMF), but it only wants help restructuring its debt, not new loans, the country's finance minister said on Tuesday. The reason years of talks between Angola and the fund had so far failed to yield a programme was because organisations such as the IMF "don't have an accumulated knowledge of Angolan economics and we need to build that before discussing policies," Jose Pedro de Morais said in an interview. Angola, sub-Saharan Africa's second biggest oil producer after Nigeria, is riddled with problems after its devastating 27-year civil war ended in April 2002. Its schools, hospitals, roads and bridges are in tatters and despite its wealth in natural resources, most of its people are desperately poor. To help fund its post-conflict reconstruction, Angola has relied on expensive oil-guaranteed loans, but the international community would prefer it to have an IMF programme in order to help it access credit on more favourable terms. De Morais argued Angola was not interested in getting cash from the fund as the amount it could access would be peanuts compared to massive "jumbo-loans" such as a US $2 billion credit line it signed with the Eximbank of China in March 2004. Angola - whose external debt is estimated at around $10 billion - simply wanted a programme that would help it tackle its debt arrears, he said. "What we could get from ... the fund as immediately accessed money is something like $200 million. Two hundred million dollars is my cash budget for a week," De Morais said. "So definitely we are not looking for money. We are looking for the seal of approval that the fund can give to those creditors who need the fund to confirm our policies before they can discuss with us the rescheduling of our debt," he added. De Morais was ready to have a programme along these lines "right now", but he admitted it was taking a while to supply the fund with the statistical data it required. "Why does it take so long to generate that data? Because we have never been engaged with those institutions, therefore it takes longer in our case than in the case of Nigeria, or [other countries] ... which every day go to the fund to get a programme and go to the Paris Club," De Morais said. "Our last discussion with the Paris Club [an informal group of official creditors] was in 1989. So that's the whole point. If you go around countries which have debt problems, go to the Paris Club and consequently go to the fund every single year ... and we haven't been there since 1989," he added. Angola has been plagued by allegations of graft and mismanagement at the highest level and some observers argue that the country was unwilling to opt for an IMF programme as it would mean opening up its books to international scrutiny. But De Morais dismissed these claims. "If it was an issue of transparency do you think the commercial banks who give us financing would believe what we are telling them?," he asked rhetorically. "You will find behind Angola countries like Nigeria who recently has got a programme approved by the fund and got a rescheduling by the Paris Club and they are well behind us on corruption," he added. But De Morais admitted Angola still needed to work on improving its image. A two-week IMF working mission would arrive in Luanda on 14 November to work with the government towards creating a common database on the country's economic projections, which de Morais said he thought would take about two months to complete.