A mixed report card by the IMF

Rising receipts from oil production continue to boost Angola's post-war economy, but the benefits have yet to filter down to millions of poor families, an annual International Monetary Fund (IMF) assessment has shown. The report, released earlier this week, painted a mixed picture of the country's performance over the past year, and observed that although the economy has grown by about 9 percent a year since a ruinous civil war ended in 2002, "poverty remains deeply entrenched". Agricultural production had begun to recover with the return of around four million displaced persons to their smallholdings, the IMF board said. Angola also appeared to have staged a "decisive break" with rampant inflation, which has declined substantially since mid-2003: the 12-month rate for consumer price inflation fell from 95 percent in September 2003 to 31 percent in December 2004. Concerns over fiscal transparency remained, especially regarding the oil industry, the country's economic mainstay. IMF staff highlighted that an independent oil diagnostic study, published by the government in May 2004, was unable to achieve a full reconciliation of recorded oil revenue payments in 2000, and no analysis had yet been done for subsequent years. An equally important concern was the limited progress on structural reform, as the state continued to exert a heavy influence in many sectors, "with privileged access dominating the small private sector, and noncompetitive practices". Privatisation also appeared to have stalled. The IMF emphasised the need for transparency and a clear, independent regulatory framework in the diamond, forestry and fishing industries. "While some controls on the marketing of diamonds have been eased, there is limited transparency concerning the supervision and taxation of the formal sector, or of the granting of rights for diamond extraction," it noted. Progress has been made in compiling the first Poverty Reduction Strategy Paper, which qualifies poor countries for the IMF's low-interest concessional lending facility, but there has been little consultation with civil society, and the implementation of policies to deal systematically with poverty reduction has been slow. The list of issues to be tackled as Angola gradually rebuilds after 27 years of civil conflict is immense, and its health and social indicators are among the worst in the world.