Balance of Trade and Payments

Despite generally large trade surpluses, the national current account has been in deficit since statistics were first published in 1978. Trade surpluses have been outweighed by large deficits on "invisibles"--primarily interest and profiÍÍÍÍts, transport costs, and technical assistance payments. The largest part of the outflow for interest and profits was accounted for by the payments of state-run petroleum companies abroad for amortization of their loans (see table 11, Appendix A).

By 1988 the medium-term and long-term capital account had been positive for many years because of large inflows from loans, most of which were granted by the Soviet Union on concessional terms. The centralized planning system strictly controlled external borrowing, and each year the Ministry of Planning set a ceiling on borrowing, following consultations with the National Bank of Angola (Banco Nacional de Angola -- BNA).

Most of Angola's debt has been contracted on concessional terms. The effective rate of interest on medium-term and long-term debt was only 4.9 percent in 1985, and the average loan maturity was about seven years. Out of a total of US$3.25 billion in disbursed and undisbursed debt, US$2.06 billion was owed to the Soviet Union for military purchases. This amount carried very attractive terms: an annual interest rate of 3 percent and repayment over ten years, including a three-year grace period. In contrast, only 11.5 percent of loans from creditors outside Comecon were granted on a concessional basis.

The government has taken steps to reverse the growth in imports of services, proposing new programs to train Angolans to provide key technical assistance. At the Second Party Congress in December 1985, the government proposed several steps to give priority to national companies when awarding building contracts to cut less essential services, such as transport expenditures and international telephone and telex usage and provisionally to suspend private transfers abroad. In particular, in March and June 1986 the government placed severe restrictions on salary transfers abroad by foreign resident workers and foreign aid workers.

Data as of February 1989