In February the IMF published its full report of the fourth review of its 27-month stand-by arrangement (SBA) with Angola, worth an estimated US$1.4bn, which was completed in January when a further SDR114.5m (US$178m) was disbursed (February 2011, Economic policy). As expected, the Fund agreed waivers for performance criteria on the accumulation of domestic arrears and the extension of credit by the Banco Nacional de Angola (BNA, the central bank) in recognition of the severe financing crisis that the country underwent in 2008-09. Overall, the Fund reported positive progress with macroeconomic stabilisation over the first 14 months of the SBA, with progress on key targets of reducing the non-oil deficit and rebuilding the level of foreign-exchange reserves. However, after such a sharp fiscal retrenchment in 2009-10, a major challenge will be reviving the ambitious PIP in a sustainable manner. The Fund called for spending restraint as oil revenues rise and for further cuts to fuel subsidies, but it came up against strong opposition from the government, which is keen to keep a lid on domestic fuel prices and boost spending in the provinces ahead of the legislative elections due in 2012.

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