The government of Angola is seeking the help of the International Monetary Fund (IMF) to help it diversify its economy, which for decades has been relying too much on the oil sector.
The Southern African nation is the continent’s second-largest oil producer behind Nigeria, and reports said that the oil sector represented over 95% of export earnings and 52% of government revenue in 2015.
But the recent drop in oil prices has severely affected the state revenues and pushed the cost of life to the extremes, forcing the government to seek an urgent process of diversification of the country’s economy.
“The government of Angola is aware that the high reliance on the oil sector represents a vulnerability to the public finances and the economy more broadly,” the ministry of finances said this week in a statement from the capital Luanda.
“The government will work with the IMF to design and implement policies and structural reforms aimed at improving macroeconomic and financial stability, including through fiscal discipline,” the ministry added.
“In the near term, our diversification efforts will be focused on the agricultural and fisheries, mining, education, financial services, water, sanitation and the health sectors,” the ministry said.
Angola’s non-oil sector is said to currently contributing 69.1% to the Gross Domestic Product (GDP), compared to 40% in the mid-80s.