Ver Angola


Government to inject 1.1 billion dollars to capitalize state funds

The Government expects to inject almost 1.1 billion dollars this year to capitalize state funds, of which US$842 million are earmarked for late payments, the executive said.


The information disclosed by the Ministry of Finance states that the amount will also be used to increase investments in infrastructure, by 55 percent, in nominal terms.

The announcement was made by the Secretary of State for Finance and Treasury, Ottoniel dos Santos, in Cape Town, South Africa, while speaking on one of the panels at 'Meeting Bonds, Loans & Esg Capital Markets Africa', an event that took place between Tuesday- fair and Wednesday in that city.

Ottoniel dos Santos referred that, for this year, the Ministry of Finance intends to raise 13.1 billion dollars, of which 6.1 billion will come from the domestic market and 7 billion from the foreign market.

According to the official, most of the funds to be raised will be issued and disbursed to finance public investment projects in the energy, transport, agriculture, health and education sectors.

With regard to the capital market, the Government expects to issue 'Eurobonds' this year, with emphasis on the issue of ESG bonds ['Environment, Social & Governance'] linked to environmental, social and governance objectives.

"Depending on the evolution of market conditions, we may once again carry out operations similar to those carried out in 2022, in which a liability management operation was carried out for the repurchase of 636 million dollars in short-term 'Eurobonds'", stressed Ottoniel dos Santos, quoted in the note from the Ministry of Finance.

This operation, highlights the Ministry of Finance, "made it possible to lengthen the maturity profile of Angola's 'Eurobonds' through the exchange of instruments with maturities of three years for bonds with a maturity of over 10 years".

The minister stressed that for the budget in force it was found that the net issuance of domestic debt is positive, and negative for the external debt, as it underlines a decreasing dependence on the external debt and a growing prioritization in the mobilization of internal resources.

On external debt, the Secretary of State for Finance and Treasury said that there is greater exposure to exchange rate risk, taking into account the 'mix' of (external) currencies, which reflect the different sources of financing, which, in general terms, is partially mitigated by oil revenues collected by the State, which are denominated in US dollars, which translates into a natural hedge in the event of currency devaluation.

According to the Secretary of State, for the internal market, the risk has been progressively safeguarded by the strategy of reducing the issuance of bonds indexed to the exchange rate, instruments that today represent only 10 percent of the 'stock' of the internal debt.

Ottoniel dos Santos underlined that the Ministry of Finance is studying the possibility of, in the medium term, implementing a hedging framework to reduce exposure to the risk of 'commodities' and interest rate, with the support of the World Bank for technical assistance and training of personnel for the structuring of this operation.

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