July 31 (Bloomberg) -- Angola, Africa’s biggest oil producer behind Nigeria, may be promoted to a list of middle-income countries that get better terms from international lenders such as the World Bank, a United Nations official said.
The UN has started a study on the country’s economic vulnerability as part of a three-step project that will result in a new ranking by 2020, Tesfachew Taffere, director of the UN Africa Division for Least Developed Countries, said yesterday in an interview in Luanda, the capital.
“Angola will make it to the middle-income category because it has a growing economy, the government is moving toward the right direction and it has the financial capacity to invest,” he said. “It’s a bit ambitious because dependency on oil has made Angola vulnerable.”
The OPEC member wants to diversify its $114 billion economy away from crude which makes up almost all of its exports and 80 percent of tax revenue. Middle-income status will help it rebuild from a 27-year civil war that ended in 2002 by gaining access to risk and credit guarantees that lower the cost of public investments containing private funding. The World Bank forecasts economic output will expand by 7.2 percent this year.
The next step is to submit the study by 2015 to the UN Secretary General and General Assembly for approval, Angela Braganca, foreign ministry secretary of state for cooperation, said at a July 29 press conference in Luanda. The transition to the new list may be completed by 2018, she said.
Angola’s gross national product was more than double a threshold of $1,190 per capita a year to qualify for the move from least developed nation status, according to the UN Committee for Development Policy in March 2012.
The income level absolved the country from having to meet at least one of two other criteria: an index of health and education, and a measure of external risk to the economy. Angola has opted to study the latter.
Only 57 percent of children 6 to 11 years old attend school, according to a 2012 report by the Catholic University of Angola. Of the 3.9 million cases last year of malaria, the leading cause of death in Angola, more than half of them were children, the report showed. The country has a population of about 21 million, according to the World Bank.
Angola’s push for economic diversification began after it secured a $1.3 billion loan from the International Monetary Fund following the 2008 oil-price crash. Last year, the government began a five-year plan to improve training, build more infrastructure and encourage banks to invest in thousands of companies.
Other countries that have graduated to the UN’s middle-income list include Botswana, Cape Verde, Sri Lanka and the Maldives.
-- Editors: Sarah McGregor, Ben Holland
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