Friday March 20, 06:01 AM
Angola to slash spending: report
LUANDA (AFP) - Angola will cut public spending because of falling oil revenues, state media has quoted the country's finance minister as saying, and slash jobs from the civil service and military.
Finance Minister Severim de Morais told parliament on Thursday that the government would reduce spending on goods and services by 35 percent and cut the public wage bill by 7.5 percent, although salaries would not be affected, Angop reported.
"This reduction in spending will be achieved through greater control of the number of civil servants, military and paramilitary," the minister said, adding government subsidies on fuel, water and electricity could also be reduced.
Since peace came to Angola in 2002 after nearly three decades of conflict, its economy has ballooned thanks to high oil prices and strong demand for its other main export, diamonds.
GDP growth averaged 15 percent and it was one of the fastest growing economies in the world.
But with the global financial crisis and oil prices falling from 147 dollars in 2008 a barrel to below 40 dollars earlier this year, Angola?s fiscal party is over.
The country?s budget had previously been calculated on oil selling at 55 dollars a barrel, but was now based on a more conservative 35 dollars, ANGOP reported, which would mean a revenue fall of 11 billion dollars (8 billion euros).
The World Bank had predicted the former Portuguese colony could enter into recession in 2009 but this has been repeatedly rebuffed by Angola?s Economy Minister Manuel Nunes Junior, who said again Thursday the country could expect GDP growth this year of around three percent.
He said the budget change would come into affect in May or June but added that anti-poverty programmes would continue, saying: "The goals of the social sector will not change substantially, since the investments in this area have been made some years ago in a sustainable way".
Planning minister Ana Dias Lourenco said however that the fall in private investment as a result of the global slowdown meant 300,000 jobs which had been expected would not be created.
More than two thirds of Angolans live on less than two dollars a day and the country has one of the highest child mortality rates in the world with one in four children dying before they reach their fifth birthday.
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