Angola – Revised Medium Term Development Plan – 2018-2022

A revised Medium-Term Development Plan – PDN 2018-2022 (Presidential Decree No. 313/20) was published last December 10. This plan brings together the set of programs, projects, and activities that materialize the Long-Term Strategy in the timeframe 2018-2022, being the main instrument of national planning for the medium term.

Specifically, in relation to the Fiscal Sector, the plan demonstrates that the State’s financial situation in the first two years of implementation of the Plan was substantially difficult, characterized by over-indebtedness.

In this sense and intending to correct imbalances in macroeconomic aggregates, the Government signed an Extended Fund Facility with the International Monetary Fund, in which it establishes as its primary objectives: (i) reducing fiscal vulnerabilities; (ii) strengthening debt sustainability; (iii) reducing inflation; (iv) implementing a flexible exchange rate regime; (v) ensuring the stability of the financial sector and strengthening the framework to combat capital laundering and terrorist financing.

The Plan also concludes that, as a result of the fiscal consolidation process, after three years of accumulation of fiscal deficits (2014 to 2017), at the end of 2018, Angola registered a reversal in this trend, which was maintained in 2019, estimating that the overall budget balance was a surplus of 0.8% of GDP and that the primary balance was also a surplus of 6.4% of GDP.

In short, according to the Plan, by the end of 2019, the fiscal variables were in line with the Plan, since it established the goal of generating positive overall balances from 2020.

Finally, we highlight that the Plan foresees measures aimed at improving the Tax Administration, such as the acquisition of the General Tax Administration Integrated Tax Management System, auditing actions, monitoring and disclosure of tax revenue collection capacity.

Finally, GTU will keep monitoring these matters closely and will provide you with all the latest information. Request your Free-Trial today!