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Coronavirus – Angola: Confronting the COVID-19 Pandemic and the Oil Price Shock

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COVID-19 Vaccine

The COVID-19 pandemic and the shock from the falling price of oil have put severe pressure on Angola since the country’s second review under the Extended Fund Facility (EFF) in December 2019.

Only months after the conclusion of the second review in December 2019, the COVID-19 pandemic reached Angola, ushering in economic and health crises. The decline in oil prices further strained the economy, which is heavily reliant on oil exports. The economic downturn and social distancing to contain the spread of the virus have been damaging, especially given the large informal sector.

A swift response to the crisis

The Angolan authorities adopted timely measures to tackle the challenges arising from the COVID-19 shock. Measures to protect public health included quarantine, social distancing, closing of borders with limited exceptions, closures of schools, restaurants, and public events, and limited transportation. The government recently approved a prudent supplementary budget for 2020 using a conservative oil reference price. It has also introduced a comprehensive set of fiscal and monetary measures to support economic activities.

Fiscal measures

On relief to help vulnerable people:

• Tax exemptions of value-added tax (VAT) and customs duties on goods imported under humanitarian aid and donations.

• VAT tax credit for imported capital goods and raw materials for producing essential consumption goods.

• Interest-free, deferred payment option for social security contributions.

• Regulation of prices for a list of medical goods.

On government spending:

• Freeze of 30 percent of purchases on nonessential goods and services.

• Reduction in the number of ministries from 28 to 21.

• Suspension of selected, nonessential capital expenditures.

• Decrease in travel and real estate investments.

Monetary measures

• Additional liquidity support to banks and a liquidity line to buy government securities from nonfinancial corporations.

• A credit-stimulus program.

• Temporary suspension for debt service payments.

• Requirement for banks to provide credit to importers of essential goods.

A proactive external debt management

The government needs to safeguard its ability to continue to service its debt on schedule, even under the current trying circumstances. The government has therefore availed itself of the G20 Debt Service Suspension Initiative. They have also secured selected debt reprofiling operations with some of their large creditors.

Financial support from the IMF

On September 16, 2020, the IMF’s Executive Board approved the third review under the EFF and additional financial support to Angola to help mitigate the impact of the crises. Accordingly, the IMF has provided $1 billion to Angola, bringing its total expected financial support to about $4.5 billion under the three-year program. The authorities are strengthening their public financial management to improve accountability for the funds received from the IMF and debt relief from creditors.

The path to recovery

It is important for Angola to continue to stabilize the economy, control inflation, keep the reform momentum, and safeguard financial stability. It is also crucial to persevere with structural reforms, such as privatization, improvement in governance in state-owned enterprises, and strengthened legal frameworks. These reforms will help improve the business environment and pave the way for foreign direct investment and growth-enhancing economic diversification.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Government

Sanwo-Olu Orders Full Reopening of Markets

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Coronavirus

Governor of Lagos State Orders Full Reopening of All Markets

Governor Sanwo-Olu of Lagos has ordered the full reopening of markets in the state after a report showed new cases of COVID-19 have subsided.

The governor ordered the full reopening of both the food markets and non-food markets across the metropolis.

Dr. Wale Ahmed, the Commissioner for Local Government and Community Affairs, disclosed this in a statement issued on Tuesday.

He said the governor took the decision to further deepen trade and commerce and ease the hardship of recent happenings.

It should be recalled that the markets were shut due to the outbreak of ravaging COVID-19 pandemic in March before they were partially reopened for activities in May.

The governor, however, urged all traders to observe all safety protocols in order to prevent a possible resurgence of COVID-19 in the state.

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Private Sector Coalition Against COVID-19 (CACOVID) Speaks on Looted Palliatives, Explains Delay

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looted palliatives

Looted Palliatives: Private Sector Coalition Against COVID-19 (CACOVID) Speaks

Private Sector Coalition Against COVID-19 (CACOVID) has spoken on the recent actions of criminals and thugs who hijacked the #EndSARS protest and looted warehouses where COVID-19 palliatives were kept for distributions.

The group refuted claims that the stolen items were hoarded for certain people instead of distribution to the vulnerable they were meant for. This is despite the fact that some of the palliatives were already rotten by the time criminals broke into the warehouses.

Some of the looters, who spoke with the press, said a sizeable number of the items were already rotten and destroyed by rodents, while one of the lawmakers tasked with distribution claimed he planned to distribute the items on his birthday. A statement that angered many Nigerians.

However, in a statement issued on behalf of the group by Osita Nwanisobi, the Acting Director of Corporate Communications, CBN, on Monday, CACOVID said due to the huge size of the items meant to be distributed, the complex process involved in manufacturing, packaging and the eventual distribution to 2 million most vulnerable families across the 774 local government in the country, the group agreed to conduct the supply in stages, especially given locked down imposed by the Federal Government during the period.

The statement reads, “Members of the Private Sector-led Coalition Against COVID-19 (CACOVID) wish to call for calm, amidst the looting of COVID-19 palliatives meant for distribution in various State Government warehouses across the country.

“The Coalition is deeply concerned by the recent events and is urging those involved in the wanton destruction of public and private property to immediately desist from these raids, in order to allow the States to proceed with a peaceful and fair distribution of these palliatives to the neediest and most vulnerable in our society.

“Over the past few months, the private sector, through CACOVID has been working with governors, the FCT Minister, and the Nigerian Governors’ Forum (NGF) to procure, deliver, and distribute these food relief items to almost 2 million most vulnerable families (over 10 million Nigerians) across the 774 local government areas of the country, as part of the private sector’s support towards the national response to the COVID-19 pandemic.

“The sheer scale of this nationwide food programme and the timing of the orders and deliveries, which coincided with the lockdowns and reduced movement across the country, compelled CACOVID to roll out distribution in a staggered manner.

“The very large size of the order and the production cycle required to meet the demand caused delays in delivering the food items to the states in an expeditious manner; hence, the resultant delay in delivery of the food palliatives by the state governors.”

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Makinde Directs Schools to Reopen After #EndSARS Protest

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education

Schools to Reopen After #EndSARS Protest, Says Governor Makinde

The Executive Governor of Oyo State, Seyi Makinde, has directed schools across the Ibadan metropolis to resume normal activities immediately after the #EndSARS protest.

Mr Olasunkanmi Olaleye, the commissioner for education, Oyo State, disclosed this in a statement issued on Sunday in Ibadan.

According to Olaleye, the directive was after a careful review of the situation in the Ibadan metropolis as promised by Governor Makinde in a state broadcast on October 20.

This was after the governor ordered the closure of all schools, private and public, in the Ibadan metropolis for three days and promised to review the situation on October 23.

Olaleye said the governor thanks the youths who have been cooperating with security operatives in the state to ensure peace and order.

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