Angola accounting for $32 bn discrepancy in budget – IMF

LUANDA (AFP) – Angola is making “concerted efforts” to explain a $32 billion gap in the government’s accounts, which apparently was caused by undocumented spending on infrastructure projects, the IMF said Wednesday.

The International Monetary Fund in December highlighted the discrepancy, which amounts to one quarter of Angola’s gross domestic product.

“The government has and is making a very concerted effort to improve the transparency and the coverage of its fiscal accounts as well as the monitoring and reconciliation of the timely transfer of oil revenues,” Nicholas Staines, the IMF’s representative in Luanda told AFP.

The discrepancy appeared to come from undocumented spending on big-ticket projects like housing developments and railway renovations, which were undertaken by the state oil firm Sonangol, he said.

“These expenditures, or operations, or payments were not documented to the fiscal authorities, to the minister of finance with supporting documentary evidence, and therefore not included in the fiscal accounts,” he said.

He said the money was not “missing” but that Angola had long-running problems with its accounting.

US-based lobby Human Rights Watch has drawn attention to the discrepancy, known in accounting terms as a residual, and called on Angola to publicly disclose its efforts to trace the money

Luanda reacted angrily to the allegations that the money was missing, denying the claims in a front-page story in the government mouthpiece Jornal de Angola.

The latest IMF mission to Angola wrapped up on Saturday. The mission said in a report that “important measures have been adopted to ensure that oil revenues are transferred to the Treasury in a predictable and timely manner.”

In particular, a recent presidential decree requires Sonangol this year to phase out many of the operations that would normally be performed by government.

Angola has so far received $1.2 billion under an IMF programme extended in 2009 to help plug liquidity gaps following a fall in the price of oil, the country’s main export.

Sonangol, sometimes described as a parallel structure of government, holds the concessions for Angola’s vast oil blocks, is in charge of downstream distribution and has extensive overseas and domestic investment portfolios.

It also runs its own airline, manages government housing and industrial programmes, and through joint ventures with Chinese companies is involved in negotiating oil-backed loans for the government.