The lack of access to credit has been widely cited as a major cause of the lack of economic growth in Africa in past decades. Moreover, critics of the governments of African oil producing states often blame the misuse of oil revenues for their structural and economic weakness.
It could therefore be expected that the Angolan government's decision to set up a new bank to channel money into development would be greeted with applause. Yet the terms under which the bank is being created have prompted the reverse reaction as critics of Luanda claim that they could merely be a new means to carry on old practices.
When the Banco de Desenvolvimento (Angolan Development Bank) was set up in March, the government announced that it would pay up to 5% of all oil income into the bank.
At current production levels and oil prices, this would equate to around $500m a year and could double within a decade. Setting up bank accounts or investment funds to save money when oil revenues are high is a common practice in oil producing states, so that the money can be accessed when prices fall in order to prevent wild fluctuations in government spending.
The Angolan move was slightly different but at least it could ensure that development funding was made available. A government spokesperson said that the bank would support "the economic and social development of the country ... stimulating growth in investments and productivity."
The main state body responsible for promoting investment in the country, the Agencia National para o Investimento Privado (ANIP), claimed that the new bank would help to diversify the economy. It promised that: "The institution will focus on the financing of long term projects, involving large amounts, thereby enabling the capitalisation of national firms. The bank will create an extremely strong business class with a financial capacity capable of competing with foreign investors."
However, the IMF announced that it had already told the government that the bank was badly designed. Firstly, it claimed that it was bad practice to concentrate on "subsidised lending to the private sector without collateral or an adequate equity stake".
Secondly, the new financial institution was set up within weeks of it being given that go-ahead at a meeting of the cabinet in March, when an IMF inspection team was already active in Angola. Finally, as the report of the IMF assessment concluded: "The evidence from other...