The prospect of lower oil prices puts “lots of pressure” on Angola, the country’s finance minister told Reuters on Friday, adding that she expected to see prices average around $70 to $72 per barrel compared with $75 in 2024.
The government of Africa’s second-largest crude oil exporter will also continue to phase out fuel subsidies, Finance Minister Vera Daves de Sousa said in an interview on the sidelines of the IMF and World Bank annual meetings in Washington.
“How many steps we didn’t decide yet, but our idea is to do it in steps,” she said, confirming that subsidies were amounting to around 4% of GDP this year.
Angola left the Organization of the Petroleum Exporting Countries at the beginning of this year.
Brent crude futures settled up 2.25% to $76.05 a barrel on Friday. Analysts have warned that oil prices would come under pressure next year due to ample supply and lackluster demand.
Daves de Sousa said the government will present its budget to Parliament next week, with figures on external financing needs being finalized over the next few days.
She said Angola was internally examining the possibility of requesting a financing program from the International Monetary Fund.
“We asked for a note with options of programs in case we request, and considering our current situation, what they understand as a good program for us,” she said.
She said the government was also considering other options, such as a mix of funding from other multilateral sources such as the World Bank and the African Development Bank, as well as domestic capital markets and banks.
The most recent IMF program with Angola was for $3.7 billion, approved in December 2018 after global crude prices tanked, decimating the country’s revenues.